Profitability, Longevity and Growth

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• Profitability, Longevity and Growth

The Next Level
Grant W. Howard 13214 Wallace Road Manchester, MI
48158 [phone] ghoward685_at_aol.com
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Our Discussion Today

• The Big Picture
• The Replenishment Process
• Getting Results
• Customer Service
• Path to Success
• Getting Results
• Profitability
• Path to Success
• Getting Results
• The Power of Your System
• Summary - Some Final Thoughts
• Through Slide 33 - Lite System and Summary

Discussion Today is different from the last two
days Day 1 - How it Works, Day 2 - How to Use
it Today - Less whiteboard and system, and more
how to make it all come together to GET RESULTS!
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Customer Service Vendor Performance Employee
Happiness
The Fundamental Tree
Service, GM Improvement, Asset Manage- ment,
Efficiency, Accuracy
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Profitability, Longevity and Growth

• Profitability ()
• GM Improvement ()
• Sales Increase - Loyalty
• Sell Price x 2
• Lost Business and Backorders
• More of Customers Business
• New Business
• COGS Decrease/Supplier Negotiations
• Expense Reduction
• Asset Management
• Freight Reduction
• Cost to Carry Reduction
• Rifle Approach
• Surplus, Safety Stock, RC/OC/OQ
• Replace Freight Inventory with ...
• Efficiency and Accuracy
• Cost to Replenish Reduction
• Replace Costs with ...

• Longevity
• Customer Loyalty
• Customer Service
• Fill Rates
• Backorder Handling
• On-Time Delivery
• Accuracy - Product, Price, Quantity, Terms
• Ability to Solve Customer Issues
• Use Technology to ...
• Dynamic - its Critical
• Adaptability to Market Changes
• Use Technology to ...
• Growth
• Existing Customers
• Lost Sales and Backorders
• Depth of Customers Business
• New Customers

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Profitability, Longevity and Growth

• Procure
• Inventory Management/Control
• Operations
• Sales
• Marketing
• Systems and Technology

• Warehouse
• Operations
• Inventory Management/Control
• Systems and Technology
• Sales
• Marketing
• Sell
• Sales
• Marketing
• Inventory Management/Control
• Operations
• Systems and Technology

Seems to be a Pattern? Where does Management fit
into all of this?
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Profitability, Longevity and Growth

• Customers
• Availability
• Backorder Handling
• On-Time Delivery
• Accuracy
• Product
• Quantity
• Price
• Terms
• Win-Win
• MEASURE

• Vendors
• Win-Win
• Not Just Price
• MEASURE
• Employees
• Want to do a Good Job
• Balanced Objectives/Team
• Tools, Processes, EDUCATE!
• Remove Stress, Give Method
• Win-Win
• MEASURE

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Profitability, Longevity and Growth

• Communication, Structure and Team Companies
  need to have a team concept, KNOWN balanced
  objectives, with a way to get there - Management!
• Systems and Tools Companies need to understand
  and use more than 20, 30, 50 of their systems!

• Processes and Procedures Companies need to
  have closed-loop, actual working processes and
  procedures!
• Education and Understanding Companies need to
  education their people and help them be part of
  the solution!

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• Inventory Management
• Getting Results
• When, What, How Much

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The Replenishment Model
A Good Replenishment Model addresses the two
objectives of Customer Service and Profitability
When to Replenish? What to Replenish and How
much? What is incoming and will be late? What is
incoming and will be early or is not needed? What
is not needed?
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The Basics - Make Sure
What is not needed?
What to replenish and How Much?
When to Replenish?
When, What, How Much? What is not Needed?
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When and What

• When to Replenish
• Target/Incentive and RC - Profits
• BOP with Target/Incentive and RC considerations -
  Profits and Service
• What to Replenishment
• Line Buy (Make Target)
• Fill In/Emergency Buy
• Transfers
• Do Nothing
• Cost to Carry versus Freight, Price and Service

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What and How Much

• Line Buy/Transfer
• Items Below LP
• Order Quantity
• 1. Up to LP
• 2. Compare to SOQ
• 3. Minimum Run
• 4. Vendor/Transfer Package

• Fill-in Buy/Transfer
• Items Below OP/Cycle
• Order Quantity
• 1. Up to OP/Cycle
• 2. Compare to SOQ?
• 3. Vendor/Transfer Package

It is important to replenish items not only
below OP, but also the items below the Cycle.
These items should be replenished at least back
up to the Cycle. Cycle is the days left in the
cycle (OC - (Today - LLB))
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Measurement Fill Rate, BOs Turns, Excess,
Mix TE, GMROI
Data to Info
The Tools
Data Usage - OE/WT Lead Time - OE/WT Level/PNA
Info - OH Paperfloat Purch Hist
Replenishment Buyers Ctrl Center Items
BOP/Priority
The Numbers Hits/Ranking Order Cycle Ave Usage,
Safety, OP, LP, Order Quantity
Timeline Analysis Too Late Too Early
Set-up Smart Set-up Co. and Whse. Product
Pline Product Master Product Whse.
Surplus Inventory External/Lng. Term Internal/St.
Term
Maintenance One Stop Inq/Maint Proofs/Mass
Update Exc Control Center
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Measurement ICRIF - Fill Rate ICRIT - Turns ICRIR
- TE
Data to Info
The Tools
Data Usage - OE/WT Lead Time - OE/WT Level/PNA
Info - OH Paperfloat Purch Hist
Replenishment POERR/WTERR POERA/WTERA - BCC
The Numbers ICAI - Rank ICAR - RC ICAMM - AMU,
Safety, OP, LP, OQ
Timeline Analysis ICRIG - Too Late ICRIG - Too
Early
Set-up ICSR - Smart ICSD - Whse ICSL -
Pline ICSP - Prd Master ICSW - Prd Whse
Surplus Inventory ICRIS - Ext/LT ICRIS - Int/ST
Maintenance POERA - One Stop Proofs/Mass
Update ICAMU - ECC
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• Getting Results!

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Service - Fill Rates?

• How well a business meets its customers needs -
  pulse of customers happiness/loyalty.
• What to measure
• Fill Rates Shipped/Ordered
• Quantity 9 out of 10 90
• Line Item SC 9 out of 10 0
• Order Ship Complete?
• What should Fill Rates be?
• The report is broken?

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Profits - Turns? ROI?

• Freight, Cost to Carry and Cost to Purchase
• Maximize the Bottom Line
• C to P Turns
• 80s 10.00 2-3
• 90s 5.00 3-6
• 00s 2-3.00 6-10
• EDI/VMI 0.13?
• Many companies are increasing the turns, but the
  infrastructure does not support it bottom line,
  longevity and growth are all suffering! Customer
  Service, GM Improvement, Efficiency, Accuracy,
  Asset Management

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• Know the Right Things to Do
• Do these Things Right
• Inventory Management is at the Time of
  Replenishment, the When, What, and How Much.
  Everything else is Reacting.

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Service and Profit - Balance

• Hits H H L L
• Cost L H L H

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Inventory Management Objectives

• Customer Service
• Availability (Fill Rates)
• Proper Backorder Handling
• On Time Delivery
• Accuracy Item, Quantity, Price

• Profitability (ROI)
• GM Improvement (Sales and Cost)
• Freight Considerations - OC Analysis
• Efficiency Asset Mgt CtoC and CtoP
• Surplus Inventory Safety Inventory
• Turns/Days supply, ROI/TE/GMROI

Watch the C to P (Purchasing/Replenishment,
Receiving Put-away, A/P)
Watch the C to C (Warehousing, Handling, Obsol.
Shrink, Taxes, Ins, Interest)
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The Path to Success - Service

• 1. Accurate Order Point
• Usage
• Data Collection, Lost Business, Inputs
• Method and Window
• Seasonal Trending, Advance by Lead Time, and
  Shift
• Roll Up
• Correct Paths
• Usage Forecast Accuracy Analysis
• Lead Time
• Safety
• Safety by Rank/Hits/Velocity
• Safety Method by Lead Time
• Safety Analysis
• Customer Buying Habits
• Data, Parameters, Forecasting

• 2. Accurate Level
• On-hand Integrity
• Paperfloat Control
• BIIS
• 3. Replenish at Order Point
• BOP and Prio
• POERA
• 4. Monitor Changes/Timeline
• Timeline Gap/Too Late
• ICRIG

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The Path to Success - Service

• 5. Closed-loop Backorder Process - Service
• 6. Keep it Working - Maintenance
• Get out of the Yellow Sticky World
• Watch for Suppressed with Activity
• POERA, WTERA, ICAMU
• 7. Measure and Monitor
• Drill in, Rifle Approach - Dont Shotgun Approach
  it, just and disappointing results.
• ICAMU, ICRIF
• 8. Receiving, Put-away and Backorder Handling -
  Service
• 9. Picking, Shipping and On-Time Delivery -
  Service
• 10. Billing - Product, Quantity, Price, Terms -
  Service

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Customer ServiceAvailability, Backorders, OTD,
Accuracy
Back to Basics

• 1. Right Inventory not Suffering because of Wrong
• 2. Controlled Replenishment
• 3. Stocking Policy
• 4. Good Numbers and Proper Use of Them (OP,
  Level, LP, and OQ) - Path to Service
• Replenish at Order Point - Prio
• Usage Lost Sales, DP
• Freight/C to C vs Service
• Line Buy vs Emergency Buy
• Understand LP and OQ Effect

• 5. Operations
• Backorder Policy and Handling
• On-Time Delivery
• Accuracy of Shipments and Billing
• 6. Fill Rates - Monitor, Drill Down, Find Areas
  of Improvement

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Customer ServiceAvailability, Backorders, OTD,
Accuracy
Keys to Good Fill Rates

• 7. Understand and Use
• Customer Buying Habits
• Timeline Analysis
• NOOS Policy and Procedure
• Smart Selling/Transferring
• 8. Follow LP and EOQ Suggestions
• Too many Fires
• BOP but not at Target Problems

• 9. Never-Arrive Incoming
• 10. Safety Stock Increase
• Safety Analysis (Over Utilizing)
• Safety Increase
• Use a Rifle Approach
• Watch the Profits

Stellar Customer Service does have to drive your
inventory through the roof, it just has to be
done smart.
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Customer ServiceAvailability, Backorders, OTD,
Accuracy

• Customer Service Improvement
• Availability
• Backorder Handling
• On-Time Delivery
• Accuracy - Product, Quantity, Price, Terms

GM Improvement, Service, Efficiency, Accuracy,
Asset Management
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Inventory Management Objectives

• Customer Service
• Availability (Fill Rates)
• Proper Backorder Handling
• On Time Delivery
• Accuracy Item, Quantity, Price

• Profitability (ROI)
• GM Improvement (Sales and Cost)
• Freight Considerations - OC Analysis
• Efficiency Asset Mgt CtoC and CtoP
• Surplus Inventory Safety Inventory
• Turns/Days supply, ROI/TE/GMROI

Watch the C to P (Purchasing/Replenishment,
Receiving Put-away, A/P)
Watch the C to C (Warehousing, Handling, Obsol.
Shrink, Taxes, Ins, Interest)
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The Path to Success - Profits

• 1. Accurate Line Point and Order Qty
• Accurate Order Point
• Usage
• Data Collection, Exceptional Business, Inputs
• Method and Window
• Seasonal Trending, Advance by Lead Time, and
  Shift
• Roll Up
• Correct Paths
• Usage Forecast Accuracy Analysis
• Accurate Review/Order/Transfer Cycle
• Proper OQ Parameters and Controls
• Proper Understanding and Use of LP and EOQ
• Data, Parameters, Forecasting

• 2. Accurate Level
• On-hand Integrity
• Paperfloat Control
• BIIS
• 3. Replenish the Correct Qty
• Line Point, OQ, Pkg
• Making Targets Properly
• POERA
• 4. Monitor Changes/Timeline
• Timeline Too Early
• ICRIG

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The Path to Success - Profits

• 5. Surplus Identification and Disposition Process
• 6. Keep it Working - Maintenance
• Get out of the Yellow Sticky World
• Watch for slow/inactive stock items
• POERA, WTERA, ICAMU
• 7. Measure and Monitor
• Drill in, Rifle Approach - Dont Shotgun Approach
  it, just and disappointing results.
• ICAMU, ICRIT, ICRIR
• 8. Receiving, Put-away and Backorder Handling -
  Efficiency
• 9. Picking, Shipping and On-Time Delivery -
  Efficiency
• 10. Billing - Product, Quantity, Price, Terms -
  Efficiency

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ProfitabilityGM Expenses (Freight, CtoC, CtoP)
Back to Basics

• 1. Stellar Customer Service
• 2. Controlled Replenishment
• 3. Stocking Policy
• 4. Good Numbers and Proper Use of Them (OP, LP,
  OQ, Level) - Path to Profitability
• Up to LP, OQ, Min, Package
• Usage Exceptional, DP
• Targets/Incentives Properly
• Line Buy vs Emergency Buy
• Availability (Sales, GM, Fires)

5. Vendor Performance and Negotiations 6. TE
and/or GMROI - Monitor, Drill Down, Find Areas of
Improvement
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ProfitabilityGM Expenses (Freight, CtoC, CtoP)
Reduce Inventory/Increase Turns

• 7. Excess and Defective Control
• Prevention
• Disposition
• 8. Order Quantity Reduction
• OC/RC (LP) Reduction
• OC/RC Analysis/Paths, Watch Freight
• Lower Targets - Negotiate
• C to P Departments Tools/ Efficiency
• Suggested OQ Reduction (EOQ)
• Watch C to P Departments
• Proper C to C

• 9. Safety Stock Reduction
• Safety Analysis (Not Utilizing)
• Safety Reduction
• Improve the Process
• Use Rifle Approach
• Watch the Service
• 10. Other Reductions
• Never-Ship Committed
• Duplicate Products and Lines

Turns the Right Way! Balanced Objectives -
Increase turns/decrease inventory but
DONT EFFECT SERVICE!
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ProfitabilityGM Expenses (Freight, CtoC, CtoP)

• Understand the Impact Areas
• Excess and Defective
• No one wants or needs
• Control the Feelings
• Let it Roll, Let it Go
• Be Careful - C to C/Mix
• Line Point and Order Quantity
• What and How Much
• Be Careful - C to P Departments
• Order Point - Safety Stock
• When
• Be Careful - Customer Service

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Vendor Performance and Negotiations - Its not
just Price

• Lower COGS
• Lower Freight Minimums
• Multiple Drops for Freight
• Combined P/Os for Minimum
• Freight Paid Fill-ins
• Fill Rates
• Consistent Lead Times and OTD
• Accurate Shipping (Blanket Receiving) - Product,
  Quantity, Price
• Good Backorder Handling

• EDI/VMI/2-Way Information Flow - B2B
• Automated Product and Pricing Updates
• RGAs on New Items
• Excess Inventory Returns
• Win/Win - Partnership

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ProfitabilityGM Expenses (Freight, CtoC, CtoP)

• Profitability Improvement
• GM Improvement
• Expense Reduction
• Freight
• Cost to Carry
• Cost to Purchase

GM Improvement, Service, Efficiency, Accuracy,
Asset Management
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• How Much of the System Are You Using?
• Good System - Over 80 of Items Listed

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Best Practices Inventory Management

• Improve Customer Service, GM, Asset Management,
  Efficiency, and Accuracy
• Better SKU Coverage - System and Buyers
• 60 - 80 SKU Coverage to 85-96
• 5-25,000 SKU/Buyer to 40,000-100,000
• Improved Time Management
• Improved Priority Setting
• Improved Efficiency
• Improved Accuracy
• Technology and Core
• Replace Inventory with Information
• Rifle Approach
• Better Numbers and Better Tools
• Ability to Balance Profits and Service

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Smart Parameters
Table Driven/Automated Depth Watch
Hardcoding Balanced
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Economic Order Quantity (EOQ)
The EOQ formula minimizes the Cost of Reordering
or Purchasing and the Cost of Keeping or
Carrying which develops the lowest total hidden
inventory costs - the lowest total inventory
costs. The How Much decision affects your
bottom line and service!
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Paperfloat Control
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Buyers Control Center/Workbench
On-line, Priorities, One-Stop, Drill Down,
Maintenance, Targets
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Making Targets Properly

• General rules of thumb
• Days
• Dollars
• 1/2 way through OC/RC

• Cost to Carry vs Freight, Price, and Service
• Key is equal days supply
• Increase or Decrease
• Use for Proper Emergency Buys/Fill-ins

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Discounts and Price Increases
Negative
This is total days supply to have on the shelve,
not to buy. Use the up to vendor target logic
(change order cycle days) to meet the days
supply. This method works well for periods less
than 90 days supply (seasonal or large swing
items - be careful). Be aware of future freight,
minimum considerations, fill ins, NS and OAN
items. If targets are involved, be sure to fill
in the entire line not just the fast movers or
work a deal.
C to C
Discount/Increase C to C
Discount/Increase
Positive
Break Even
Max. Potential
Quantity
Break Even (Days) (2 x Discount / Monthly C to
C) x 30 Maximum Potential Savings (Days)
(Discount / Monthly C to C) x 30
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Time Line Analysis
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Surplus Inventory
Prevention Identification Disposition Goals/Plan
Responsibility
Coordination
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Smart MonitoringSafety Stock - Service and
Turns
Properly managed safety stock will result, over
time, in this configuration of remaining stock
levels at time of receiving the replenishment PO.
Impossible task if done manually.
Enhancement automates the monitoring.
X Actual stock available at time of receiving
Safety Stock Level
X
X
75
X
X
X
50
X
X
X
X
25
Stock out
X
X
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Best PracticesBetter Numbers - Order Point

• Usage Data and Calculation
• Lost Sales/Exceptional Sales Capability
• Smart Exception and Auto Correction
• Path Exception Reporting
• Flexibility to Where Usage Placed for Shipments,
  Backorders, and Credits
• DP/MRP Capability
• Flexibility with Method and Window by Rank
• Seasonal Capabilities
• Individual Parameter Driven Seasonal Trending
• Lead Time Advance for Seasonal Items
• Season Shift Capability
• Dual Usage for Seasonal with Long Lead Times
• Threshold Minimums
• Rollup Capability
• Usage Forecasting Accuracy Analysis and
  Correction

• Safety Stock Improvements
• Safety Days or Percentage
• Safety Control by Rank
• Method Control by Lead time
• Safety Stock Analysis
• Lead Time Improvements
• Minimum and Maximum
• History File with Maintenance
• History/Parameters by Path (Int/Ext)
• Exceptions w/ Automated Ignore
• Manual Exceptional Lead Times
• Customer Buying Habits, Threshold Minimums and
  Automated Overrides
• Use of Hits and Smart Item Ranking
• Smart Parameters and Controls

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Best PracticesBetter Numbers - Line Point and
OQ

• Review/Order Cycle Improvements
• Based on Purchasing History or Extended AMU
• Min, Max and Exception
• Transfer Cycle Days
• OC/RC Analysis
• Order Quantity (EOQ) Improvements
• Co, Whse, Pline, Product level
• Vendor vs Transfer (Path)
• Min and Max Supply
• Calculate but do not use (SP)
• Use of Hits and Smart Item Ranking
• Smart Parameters and Controls

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Best Practices - Better Tools

• Buyers Control Center - BCC
• Priority
• Targets
• Smart Rounding
• Drill Down/Maintenance
• Proper combination of the three models and use of
  EOQ
• One-stop Thinking
• Time Line Analysis
• Too Late
• Too Early
• Smart Surplus - True Surplus
• Exception Control Center - ECC
• Smart exception reporting
• Mass Update
• One-stop thinking
• Safety Stock at Receipt Analysis
• Measurement and Monitoring

• Rounding Control and Smart WT
• Three buying methods and WTs
• LP with or without OQ
• WT Cycle and Set weeks supply
• Full control and Works together
• Proper products, Proper quantities
• Improved Stock Levels
• Orders, POs and WTs Control
• Future Sales Orders
• Future P/Os
• Strong Suggested Count Program
• WMS
• Flexible Product Merge Utility
• Stock Balancing Tools
• Use of Hits and Smart Item Ranking
• Smart Parameters and Controls

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• Some Final Thoughts

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• Its not just good Software and Systems
• Its not just good Processes and Procedures
• Its not just good People and Education
• Its not just good Management
• ITS ALL OF THEM!
• Its not just good Usage
• Its not just good Order Points
• Its not just replenishing at Order Point
• Its not just the Timeline
• Its not just working the Surplus
• ITS THE ENTIRE PROCESS
• Same Company Different Software

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• Use measurement and monitoring reports to confirm
  results and to drill down and find areas of
  improvement.
• Be sure to use a rifle approach rather than a
  shotgun approach, or it will be lots of and
  probably disappointing!

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Measure Results

• Customer Service
• Fill Rates/Availability (ICRIF)
• Accuracy - Product, Quantity, Price (CM)
• On-Time-Delivery
• Backorder Handling (ICRIN)

• Profits and ROI
• Surplus - Disposition (ICRIS) and Prevention
• Safety Analysis (ICAMU)
• Review/Order Cycle
• Freight Dollars - As percentage of sales
• Turns - Really C to C and C to P (ICRIT)
• Turn and Earn - ROI (ICRIR)

Replace Inventory with Information Do better on
both sides!
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Replace Inventory and Costs and Improve Service
with Technology. Improve the Bottom Line with
Technology Information, Efficiency, Accuracy (If
it is not helping Service, if it is not helping
Profits)
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Keys to Getting Results - Top 10

• 1. Hits/Ranking and Smart Parameters
• 2. Order Point, Line Point and Order Quantity
  Accuracy
• Usage
• Lost/Exceptional Utilization
• Usage Exceptions and Maint
• Proper Method and Window
• Seasonal Trending Adv LT
• Roll Up
• Usage Accuracy Analysis
• Lead Time Exceptions and Maint
• Safety Set-up and Safety Analysis
• Order Point Adjusters
• OC/RC Analysis
• Proper EOQ Parameters
• WT Smart Rounding

• 3. On-hand and Paperfloat Accuracy
• SC/CC Program and Address the Issues, Good
  Processes
• Paperfloat Control
• WMS, BC, RF

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Keys to Getting Results - Top 10

• 4. Buyers Control Center
• Priority - Replenish at OP
• On-Stop, On-line, Paperless
• Making Targets Properly - Keep Equal Days Supply
• 5. Timeline Analysis
• GAP/Too Late
• Too Early
• 6. Surplus/Excess/Defective
• Smart (Long and Short Term)
• Visibility, Utilization and Disposition
• Incoming with LT Surplus

• 7. Backorder Policy and Procedure - Closed-loop
• 8. Exception Control Center
• Smart/True Exceptions
• On-Stop Corrections
• Mass Update
• 9. Measurement and Monitoring
• Service (Fill, BO, OTD, Accuracy)
• ROI
• Mix
• Excess
• Freight
• Vendor Performance

10. Controlled Replenishment and Stocking Policy
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Spend your days reacting to the fires... you may
be efficient, but will you be effective? Where
are Your Systems, Procedures, and Objectives
S(p)ending Your People?
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Back to Basics

• Most distributors DONT
• Set the system up properly
• Feed the system good data
• Understand or Use the system properly
• Clean up bad processes and procedures
• Educate their people on the system or processes
• Help departments work together
• Help work towards common goals
• Yet they think it will all just magically work

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Branch ParticipationIts Essential!

• Sell
• Service the Customer
• Controlled Replenishment (POs and Transfers)
• Good Data and Information (Rifle vs Shotgun)
• Lost and Exceptional Sales
• On-hand Integrity and Paperfloat Control
• Proper Backorder Handling
• Surplus Prevention Disposition
• Controlled Replenishment
• Help utilize the Surplus
• Smart Selling and Transferring
• Eyes and Ears

58
The Big Picture
Service, GM Improvement, Asset Management,
Efficiency, Accuracy Replace Inventory and Costs
and Improve Service with Technology
59
REMEMBER!
What and How Much to Replenish Line Point and
OQ Profitability

• When to Replenish
• Order Point
• Service

There is Always a Left and Right Side Balance
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Things to Think About

• Service
• Fill Rates - Having the RIGHT Inventory
• Shotgun - , Poor Results and not Balanced
• Rifle - Smart , Great Results and Balance
• Replace Inventory with Information
• Understanding When Controls Service - NO GAMES,
  REPLENISH at Order Point
• The Importance of Order Point Adjusters
• The Importance of Controlled Replenishment
• Buying a 90 day supply and it lasts 60 days

• Profits
• Turns Maximization is not Profits Maximization -
  The Right Way to Turns
• Excess/Defective 5
• Safety Stock 15-20
• Review/Order Cycle and Order Quantity Reduction -
  Caution (BCC, ECC, EDI/VMI, WMS, BC, RF, Blanket
  Receiving- Internal and External, EDI
  Invoice/Trans, Automated Pricing, Maintenance
  and Updating)
• Understanding What and How Much Controls
  Profits - NO GAMES - Order what the system
  recommends. Watch topping the truck, pre-buys,
  discounts/price increases
• The Importance of Equal Days Supply
• The Importance of Controlled Replenishment
• Buying a 90 day supply and it lasts 120 days

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The Things I Hear...

• We know its at OP, but...
• LP and EOQ are just suggestions, they dont
  really mean any thing...
• It doesnt matter how you get to the minimum, the
  important thing is getting the P/O placed and not
  paying freight...
• It doesnt matter if anything is BOP, we can
  place a P/O every day...
• We keep upping the RC, but it hardly changes the
  P/O...
• Items keep going BOP or GAP sooner than they
  should, stupid computer...
• The quantities are always wrong on the RARRs,
  really stupid computer...
• Stocking policy, backorder policy, what policy
• Increasing turns is easy, we just buy less or
  dont buy at all

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The Things I Hear...

• We understand service - everyone can buy and
  transfer inventory and they do...
• We measure things, our turns are 4.2394702...
• Were wondering how the computer invested so much
  in inventory and we got so little...
• We dont have time to prevent fires, we are
  running around all day putting them out...
• Usage is correct by special magic lost sales and
  exceptional sales logging are just a waste of
  time, talk to customers...
• We have to have more people, look at all these
  THICK reports we look through. We even find
  something sometimes
• We review our lines at least monthly, many
  weekly...
• We understand the process and maintenance as
  long as we push the right buttons (10 steps)

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The World is Changing!

• Yesterday Today Tomorrow
• Buyers/Inv. Control Inventory/Asset Managers ???
• Turns Dominated Customer Service Oriented If
  you cant
• Inaccurate Data Data/Information Managers
  handle today,
• Four Glass Walls Communications Team how
  will you
• Learned from Bill Education Understanding
  handle
• Pencil and Paper Technology and Efficiency
  tomorrow?

If your company is stuck in Yesterday or having
troubles with Today, how will it survive Tomorrow?
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GWHCO

• www.gwhco.org
• Grant Howard
• ghoward_at_gwhco.org
• 734-428-0529 Phone
• 734-428-0593 Fax
• John Cason
• jcason_at_gwhco.org
• 256-830-0676 Phone
• 256-830-0481 Fax

• Our approach involves tailoring the best
  practices in distribution to the specific needs
  of our clients. Our working philosophy revolves
  around building a strong and self-maintaining
  infrastructure by developing a working plan based
  on processes and procedures, education and
  understanding, implementation of tools and
  technology and through communication,
  organizational structure and team environments.