I was on a bit of a trip down memory lane over the holidays as I reconnected with former colleagues from when I was VP of Operations and Supply Chain at PaperPak, an absorbent products manufacturer for healthcare and food products. I recently talked about healthcare manufacturing with a group of powerful women (and a few brave men) at the Professional Women in Healthcare event. When inventory arose as a hot topic, I thought about paper rolls (pictured).
Actually, inventory was a hot topic as we partnered with key customers to develop collaborative forecasting models, implement vendor managed inventory programs to dramatically reduce inventory and free up cash while improving service levels and to maximize storage and efficiencies in our operations, distribution centers and, most importantly, throughout our transportation system (since absorbent products are bulky and freight intensive).
In our view, inventory is circling back in importance and will become a hot topic again as customers expect immediate, customized deliveries with the expectation of easy returns and last-minute changes to orders in production, in the warehouse or in transit. What are you doing to get ahead of this ‘new normal’ assumption?
To throw out a few ideas to get your juices flowing:
- Get demand further into your supply chain – what are your customers’ customers selling or using of your product?
- Be collaborative with strange bedfellows – I’ve written several articles recently on this topic as the most successful executives see the value in finding the ‘win-win-win’
- What talent do you have focused on having the ‘right’ inventory at the ‘right’ place at the ‘right’ time? You could double your inventory and decrease service if you don’t know how to navigate these treacherous waters.
- How sure are you that your demand and supply (labor, skills, machine capacity, buildings/ storage capacity, cash flow) are aligned and will remain aligned?
This topic reminds me of one of my early articles, the Million Dollar Planner. Although that sounds insane, it might be worth thinking about conceptually. If you maximize your customer experience, profitability and cash flow, the return is frequently in excess of a million dollars. Most importantly, what could you do with an extra million dollars? Invest in new products and services to spur growth? Build your infrastructure to enable scalable growth? Build your talent base to create sustainability? The possibilities are limitless.
Contact us if you’d like to discuss further.