Tag Archive: investments

Do You See Your People as Assets or Expenses?

February 6th, 2018

Ponder this question: How do you see your people?  Assets or Expenses?

We all might like to jump to the answer of assets but is it true?

A few questions to consider include:

  1. If sales are down for the quarter, do you think about investing in people to grow the business or cutting back on people to keep margins steady?   What really pops into your mind?
  2. Do you hold brainstorming sessions with just your leadership team or do you actively solicit input from the people on the floor, in the field, on the phone etc.?  If you ask, do you plan to look into it or are you just checking a box that you asked?
  3. When reviewing financials, do you keep them to your leadership team/ inner circle or do you share the main elements with everyone (while explaining the numbers and soliciting feedback).
  4. If you run into cash flow challenges (due to growth, investments in technology, a non-recurring write-off etc.), do you immediately think about who you can cut?  Or do you look at the situation holistically and think through how to address?For example, when I was VP of Operations, we ran into temporary profit issues and the Board wanted to cut people.  However, the largest cost was materials.  We pushed back to keep our people and focused on how to reduce scrap which would provide a 10 to 1 return vs. labor which might actually cost more if scrap went up at all due to the lack of people.

You don’t have to share your answers.  Just think about them.  If you think about people as expenses, even occasionally, somehow they start acting like expenses.  It seems to work that way in every situation I’ve seen.



The Critical Importance of Design

September 23rd, 2013
Never underestimate the importance of design when upgrading or implementing supply chain systems.

Never underestimate the importance of design when upgrading or implementing supply chain systems.

I find that supply chain design is often undervalued. We seem to blindly follow systems and business processes handed down from our information technology departments and resources, but do we take the time to think through design? Purchasing, logistics, and ERP systems are considered big-ticket items for most companies.

Why would we leave design to chance and not fully leverage our investment?

If you are upgrading or implementing a new software system, start thinking about design prior to implementing, you cannot start too soon. My best clients ask for their processes to be reviewed, documented, and improved upfront. This way, the clients are familiar with the processes, and can better sync up their system and process design to deliver results. Even more importantly, those clients typically have a much smoother implementation, less customer disruption, less cost, less confusion.

If you are not upgrading or implementing, do not despair! Anytime you make a commitment to design, you’ll gain a benefit. Start by asking your employees about what is working and not working. Listen to their feedback. Review configuration options of the software. Get familiar with the functionality and business needs. Join user communities. Ask for ideas. Develop plans for design improvement. Significant results can be achieved without significant investment.

For example, one of my clients wanted to bring inventory levels down to free up cash without affecting service levels. We reviewed the people, process, and systems. There were opportunities to re-design aspects of each – within 6 months, the re-configured and re-allocated people, process, and system was able to deliver a 30% reduction in inventory.

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