Tag Archive: inventory

Let’s Manage Inventory for Our Customers

May 16th, 2019

inventory managementAmazon is propelling this age-old topic into a new realm. Since the CEO of the Ontario Airport Authority used the phrase “last mile” has become “last minute” on a panel I facilitated last year, I have shamelessly reapplied his brillant quote.

If customers don’t even know what they want, how can we? Interestingly, we have found that many customers, even the seemingly most confused and  volatile ones, have a pattern to their demand. If we take a holistic view of their demand and inventory planning processes from beginning to end and from high level to the minute detail, solutions emerge.     

One strategy that has proven quite effective is to “remove the middleman”, the customer himself. Instead, with access to demand information direct from the customers’ customer or end user, you can not only manage the extended supply chain inventory better for a happier customer but you also can improve margins, efficiencies and cash flow to boot.

In consumer products circles, this strategy often termed, vendor managed inventory is usually dictated by the “big guys”.  In aerospace, it is also expected but termed differently, customer based ordering, min max and other names. It is also common in healthcare as we won “supplier of the year” for two years in a row because of what we accomplished with VMI for Cardinal Healthcare when I was VP of Operations at PaperPak. We decided to make it a strategy for key customers at PaperPak, even though Cardinal is the only one who requested it. Should you consider a strategy like this to get ahead of your customers’ demand?  It is just another aspect in creating a resilient supply chain. Check out our series on the topic.

 

 



We Are All Salespeople

May 13th, 2019

Do you think of yourself as a salesperson? For most of us, the answer is probably ‘no’; however, every successful executive, manager, professional and person is a salesperson.  

Last week, I participated in a consulting conference, and our Society for the Advancement of Consulting ambassadors (pictured here) filled the role of salesperson to spread the word on the value of SAC. We had a great time and many value-added discussions. I find the key to ‘selling’ is actually providing value; not selling people products and services they do not need!

When I think back, I have always been in sales even though I thought I had no idea whatsoever about sales at the time. The way I got my first job was talking about the value of a senior project and how it was applicable to performing a planning role. I had NO idea that this was actually selling but it is how I successfully landed a great job out of college. Early in my career, I found system settings that would make our Coca-Cola facility’s process better, and I had to sell IT and others on why they should support this change. Later at a plastic injection molder, I had to sell management on why we should focus on certain inventory initiatives.

Lastly, as a VP of Operations of an absorbent products manufacturer, I absolutely spent 90% of my time selling my team on how they were valuable to the vision, suppliers on how they could have a part on creating a win-win, customers on how we could create collaborative vendor management inventory initiatives that would increase their service and profit (which would also improve our revenue growth, inventory and efficiencies), the Board of Directors on why we should focus efforts on material projects to drive profitable growth (even though they wanted me to focus on reducing labor costs instead) and the list goes on. In consulting, 80% of project success (partnering with the client to make sure results occur) relates to selling and positioning. After all, doesn’t it all stem from successfully navigating change?

Think about your career and daily job responsibilities. I bet you are selling every day as well!

One tip to implement this week:

The key to success in sales is to provide value. As I read in a book by my consulting mentor when I decided to start consulting, selling consulting services is simply finding ways to provide value to clients by helping them to increase the value of their businesses. Somehow, increasing the value of businesses sounded FAR simpler to me than selling people on hiring me as a consultant (after all, who budgets to hire a consultant?), and so I went for it (and am celebrating my 14th year anniversary in May).

Of course, it isn’t exactly that simple; however, it is absolutely true. The crux of all sales is in providing value. Think about when you purchase products and services. Why do you purchase? I used to think I was quite logical and not influenced by typical sales techniques; however, it is human nature that logic makes us think and emotions make us act. Although I am never tempted by clothes (except as I know I need to look decent to be successful), I realized I spent quite a bit of money on education to be successful in my consulting practice. Clearly, I saw the value and ‘went for it’. How can you show value more often in your job, your company, and of your products and services?



The Resilient Supply Chain: Can You Get Trucks?

October 3rd, 2018

Are you able to find trucks?  This is quickly becoming a major question that needs to be answered.  Every driver has at least 12 options. Why will he/she take your load?  Are you attractive to carriers? That is the key question. After all, you can carry inventory so you are responsive (assuming you planned well and have the right inventory at the right place at the right time) but if you cannot deliver, it was all for naught.

According to the Journal of Commerce, truck rates are up in the low double digits half way through the year.  And, they are expected to go up to 15% before slowing down to 7-10% increase in 2019.  However, these rate hikes are quite the shock to businesses. Many clients are tell us that there are times they cannot find a truck, whether they pay 15% more or not. What are you doing to ensure you have a resilient supply chain?

Here are a few questions to ponder:

  • Do you view your carriers as partners or vendors? – Undoubtedly, if you view them as vendors, you probably aren’t delivering on-time or are paying double or triple the going rates.  
  • Do you have a backup carrier? – I learned this lesson from the Director of Purchasing who worked with me at PaperPak.  He kept a backup supply of our critical material so that if anything went wrong in the supply chain, he could “turn it on”.  This meant we were paying higher prices on an ongoing basis to keep this backup supply. Naturally, our board members were not happy about the increased cost.  However, he was “right on”.  Eventually there was a strike at the ports and our supply was delayed. Because we had been bringing in backup supply all along, we were able to turn up the production and cover our needs seamlessly.  Do you have a backup in place you are confident will be there when you need them?
  • Are you proactively partnering with your carriers? – When supply chain challenges arise, do you proactively collaborate with your carriers to resolve the issues?  Are you willing to think outside the box and try new and innovative ideas?
  • Are you an attractive customer? – How you treat people will either make or break success.  People tend to do business with people they know, like and trust. Are you finding ways to improve your customers’ conditions?  Remember you cannot just decide to become attractive when you need your suppliers. It is a way of doing business.
  • Do you need trucks at all?– Perhaps it’s time to re-think your strategy.  Should you consider rail, air or another method?  Can you partner with your customers or suppliers in a new way?  How about collaborating with competitors? Or, you could consider insourcing vs. outsourcing. 

Think outside the box and start early.  Waiting until there is an issue is no time to think about resolving one. 

It seems such a basic element to have trucks where you need them and when you need them.  Yet it often isn’t viewed as a priority.  Why not take stock of where you stand and put some thought into your path forward?

You’ll be more likely to meet and exceed your customers’ expectations with this proactive approach to supply chain resiliency.

 



It’s a Small World & the Customer Experience

September 7th, 2018

A few weeks ago, my brothers and nephew were in town and we did a whirlwind tour of Southern California hot spots.  We went to Universal Studios, Oceanside beach, a day-trip to San Diego for various food hot spots (a few favorites for the Arizona contingent) and to Disneyland/California Adventure.  While there, we went on my favorite ride: It’s a Small World.  What a great job they do at making the total customer experience!

Disney does a fabulous job of creating a complete experience.  In the case of It’s a Small World, you’ll notice their use of color and sound.  Interestingly, if you look at the boat ahead of us, the guests are wearing Mickey Mouse ears.  Other than sporting events, I’m not sure I can think of another place where people proudly wear hats (and certainly not odd ear hats).  As you go through the ride, there is an underwater scene where the song sounds like it is sung underwater.  Disney always goes the extra mile to fill out the customer experience.  On some rides, they add breezes, smells and more.  When walking between rides, you’ll always find people dressed in costume picking up trash so that the park is in great shape. Are you paying as much attention to your customers’ complete experience?

One great way to get started is to “shop your business”.  No matter your position, try experiencing your company as a customer would.  Are you able to call whoever you might need to talk to without annoying phone system automation?  There was a brief period of time when I called my financial advisor where I was consistently lost in a phone system maze and didn’t receive a return call.  It was amazing how such a responsive and service oriented company could turn into a nightmare with a mere phone system transition.  (Thank goodness he threw it out!)

How easy is it to place an order?  Does your customer service representative have to call you back if you have questions about old orders or does he/she seem to have information at his fingertips?  Can you get information on-line if you happen to need status in the middle of the night?  Do you receive product on-time and in-full (OTIF)?  When you receive your product or service, how does it look?  Are you proud of it or do you see room for improvement?

Now, think about it – all of these items are baseline requirements.  Are you going beyond to provide a superior customer experience?  Are you predicting what your customers’ might need and prompting them?  Are you managing inventory for them?

What else are you doing to stand out from the crowd?

 

 



Warehousing Strategies for Success

July 12th, 2018

The Amazon Effect is creating elevated levels of stress in the warehousing and distribution world. The key question is how to provide immediate deliveries, customized service, easy returns, and more for a reduced cost – a very good question indeed!

A few considerations to ponder:

  •  Storage capacity -What is your storage capacity?  How does that compare with your requirements?  And how can you maximize what you can store in your warehouse?
  • Flow – Are you running in circles around your warehouse to support your customers?  Similar to a manufacturing environment, flow can be an essential ingredient to warehousing success – or not.
  • Productivity – Have you automated what makes sense and will increase your speed/ throughput? If it doesn’t improve speed (and accuracy) to your customers, is it really more productive?  Similarly, is outsourcing truly more productive?
  • Equipment – What equipment is built into your warehousing strategy?  Would an upgrade provide a return on investment?
  • Data – Are you using predictive analytics and data analysis to make informed decisions to stay ahead of your competition?
  • WMS tools – Whether “poor man’s” or sophisticated, do you have a way to pick, put away and sort efficiently?
  • Inventory – Don’t ever forget inventory.  Without having the right product in the right place at the right time at the lowest system-wide inventory (and potentially end-to-end supply chain network inventory), what else will matter?

We have yet to come across a warehousing or distribution client that didn’t have at least a 20% improvement opportunity.  Have you looked into your opportunities lately?  Most likely your competition is!

If you need help thinking through your warehousing and distribution strategy, contact us.