We provide consulting services to help companies achieve operational excellence.
The right focus for the right results.
A good discovery effort ensures the right focus for success.
A distribution company felt it needed to improve turnaround on orders. “We need same-day shipping to get a competitive edge. Unfortunately, when we went from 5 days to 2 days inventory turns fell to 1.2. We are going to have a major challenge getting to same-day shipping - both for inventory management and for the warehouse operations."
Customers were interviewed to clarify requirements - the results were astounding. Instead of providing only a few hours notice customers could provide several months of advance notice. One customer could provide almost twelve months advance notice. “How is that possible?” the president asked the customer.
“We bid on projects. The bid process usually lasts three months. About three weeks before contracts are awarded we pretty much know if we are going to get the job. Each press is a substantial portion of the customer’s production so by the time the press is taken off-line and we’ve taken it apart for shipping, about six months has passed. The press is then shipped and trucked to our facility where we spend about three to four months refurbishing it. The parts you provide are needed in the last steps of refurbishing.”
“When do you know what you will need from us?” asked the Sales Manager.
“When we bid on the project.”
“How come you only give us forty-eight hours notice for our parts?”
“Because that’s the lead time you gave to purchasing.”
Pursuing the initial focus would have required a large investment in new systems, new equipment for warehouse operations, and more inventory. The revised focus required only a small investment in systems, no new equipment, and provided a dramatic improvement in inventory turns.
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