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The Perks of a Truly Bold
Brew
by
Camilla Deyton, CSCP
One company's formula for meeting
"grande" expectations
One of my teaching
assignments often takes me to Raleigh, North Carolina. While there,
I always arrive early to treat myself to a coffee at a nearby
Starbucks before class.
There is something
about the clientele at this particular location that makes it
difficult for me to blend in. I’m just not as cool as these
fashionably attired young professionals, who exude sophistication
with their laptops and Bluetooth devices. I think it’s the
opportunity to mingle with such apparently successful people that
draws me to this Starbucks. Perhaps some of their style will rub off
on me.
During my last
visit, I placed my order, making every effort to put all those fancy
adjectives in the correct order and prove that I belonged. After
some friendly conversation with the person working the register, I
noticed a smart-looking ceramic cup on a ledge slightly above eye
level. “Nice design,” I thought. “Pleasing graphics, the right
size—it’s all anyone would want in a company-branded mug.”
I turned the cup
over to read the price on the bottom—and, to my surprise, a
seemingly endless stream of coins poured out. Feeling old and out of
place, I stood there completely
embarrassed, wishing I could disappear.
Read the entire article |
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Inventory Control Is Perhaps
the Most Powerful Tool You Have for Containing Your Warehousing
Costs
by
René Jones
Inaccurate Inventory Costs Plenty
What asset do you
have that is more valuable than your people? Inventory! Without it
what business would your company be in?
Year after year we
try to get a handle on this thing called inventory. We select the
weekend, we order lunch, we discuss who will be responsible for
bringing in the doughnuts, we make sure someone orders enough
pencils and markers, we get the post-it notes and the dots, and
listen to our people give us any number of excuses as to why they
can't make it. Then, we talk about the inventory! Is it just me, or
is there a lot of preparation that goes into the weekend and not a
lot of preparation that goes into why we have to be at work that
weekend in the first place?
Think about it,
what does having an inaccurate inventory cost your company? First
answer this question, what does an inaccurate inventory affect? Your
profit margins, your turns, your fill rates, your service levels,
and customer satisfaction, to name a few. But most importantly it
affects the productivity of your warehouse operations. Your people
spend an average of an hour a day searching for inventory that has
been misplaced, received incorrectly, put away wrong, stolen, or put
on a return in error. Your customer service department is constantly
going to the warehouse to check and see if what the system says is
in the bin is actually in the bin. Maybe they should be paid by the
mile? Your purchasing department is constantly searching for
products to fill back orders for items that were just received but
now cannot be found. How many times have you heard, “The computer
said we have it, but when we looked in the bin it wasn’t there?” How
much is an inaccurate inventory costing you? It's costing you
thousands if not millions of dollars!
Order picking usually accounts for
about 50 percent of your total warehouse labor. Losing one hour of
labor because of an inaccurate inventory means money down the drain.
Your annual physical costs are how much? Pizza and drinks ($100),
miscellaneous items—pens/pencils/cards/markers/dots ($100),
personnel overtime for fifty people to count Saturday and Sunday at
$10 per hour ($12,000). Does everyone included in your inventory
make $10 per hour? Think about this: assume your company earns a 4
percent net profit before taxes.
That means it
takes $2500 in new sales to make up for $100 in lost products. If
your warehouse loses $100 per week, the sales department needs an
additional $130,000 in new sales each year just to break even.
Again I ask, how much is having an inaccurate inventory costing your
company? You select the number!
|
Value of Lost Material |
Net Profit Before Tax |
|
- |
4% |
1% |
|
$50 |
$1,250 |
$5,000 |
|
$100 |
$2,500 |
$10,000 |
|
$1,000 |
$25,000 |
$100,000 |
|
$10,000 |
$250,000 |
$1,000,000 |
Controlling Inventory
The control of
your inventory is vital to the continued success of your company.
When a purchasing agent or buyer procures product for the warehouse,
they are tying up current dollars in the hopes of future profits. I
know what is being said now, "You are a distributor or manufacturer,
that is how your company makes its money." But what happens when
your receiving department receives the recently purchased product?
Some go out for an order, some get damaged, some are given away as
samples (without any documentation to update your system), some are
sitting on a salesperson’s desk or in his car trunk, and some your
warehouse simply cannot find. The profits you were expecting have
now dwindled with each “some”, or should I say sum, that is not in
the bin to fulfill your customer orders.
To quote the twelfth annual
Giants of Shipping
logistics survey by James Cooke (executive editor of
Logistics
Management),
published on September 1, 2003: "When asked to rate the performance
of their business units over the past year, most respondents said
that accounts receivables, return on assets, and cash-to-cash cycle
times met or exceeded corporate targets. Only general profitability
and return on investment were reported as having failed to meet
company objectives."
Your warehouse is
causing your profitability to erode because they cannot process
orders efficiently with an inaccurate inventory. What is accuracy
you may ask? If you count 100 widgets on Saturday and cannot find 20
of them on Monday morning, that item is only 80 percent accurate. By
the time your inventory control personnel get around to searching
for them, later that afternoon, a purchase order for 2000 has been
received. The order is filled and everyone is happy. Besides, since
that item is now 99 percent accurate, they have other items on their
plate that they have to address. What about the twenty widgets that
have not been found? General profitability and return on your
investment, the inventory itself, and the dollars invested to count
it, will again fail to meet the company's objectives. How accurate
is your inventory?
Conclusion
Your company's
success is not only dependent on sales, but also on your company's
ability to say, "Yes we have that item in stock." The problem is
inventory control is usually an after thought. After the customer
orders it, and you don't have it, you begin thinking about it.
"We know little more about
distribution today, than Napoleon's contemporaries knew about the
interior of Africa” - Peter Drucker. If this is not true, then why
do economic downturns affect us so? Why doesn't our profitability
swing through the roof when the economy comes back, after the
downsizing, or should I say "dumb-sizing”, because we ultimately
affect everything except the one thing that needs affecting, the
accuracy of our inventory. Now is the time we learned about the
interior of that dark continent, "your
warehouse,"
and begin doing something about it.
About the
Author
René Jones
was the founder and
president of Total Logistics Solutions, Inc. (http://www.logisticsociety.com/).
He is now taking on a new role as president and
chief executive
officer
(CEO) of AHN Corporation (http://www.ahninc.com/).
With over eighteen years of experience in training, warehousing, and
logistics, he has used his knowledge to assist and turnaround small
and large companies alike, making them more efficient and
profitable. He has been published in several industry magazines and
is the author of,
This Place Sucks
(What Your Warehouse People Think About Your Company)
and
Warehouse 101 (A
Complete Guide to Operating Your Warehouse).
René can be
reached by phone at (1) (818) 353-2962 or by email at
rene.jones@ahninc.com
download article
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Managing
Your E-Mail
If for some reason you are missing valuable emails, check your
bulk/spam/junk bin, as some filters confuse emails as spam. This is
especially true when you register online to receive documents or
files from a web site, or register for an email newsletter (such as
the newsletter offered by RTE!).
Check our list below if you do not already know how to remedy the
issue with spam, bulk, or junk mail folders.
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ISPs
Some email providers filter messages based on content, subject line,
or the sender's address and may put your email into a bulk or
junk mail folder. Please make sure @rte-inc.com or any other email
extension you wish to receive emails from is on your "approved
sender" list or "whitelist" and/or in your "address book."
Occasionally an ISP will institute mail controls that block your
email completely without your knowledge. We often do not even
receive notice of such a block. The only solution to this problem is
for you to be aware what triggers your ISPs blockage and make sure
they understand what emails you want to receive.
Spam Blockers/Filters and Email Software
If you have recently installed a new email software or a new program
to help stop spam, make sure you check the settings. The "defaults"
are often much more restrictive than you might wish. Please see our
very general suggestions to get started. Keep in mind, software
functionality may change. These are guidelines only.
--------------------------------------------------------------------------------
AOL Users:
Please check your "Spam" folder. If you find an email there that you
wish to receive, select the confirmation message and click "This is
Not Spam." This will help future messages to get through. To avoid
accidentally filtering future messages:
Click Mail in the toolbar at the top of your AOL window
Select Block Unwanted Mail
Click Custom Sender List
Select Allow only the senders and domains listed below
Enter this domain: @rte-inc.com (or any other domain)
Click Save
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Hotmail Users:
Please check your "Junk email" folder. If you find an email there
that you wish to receive, select the confirmation message and click
"Not Junk." This will help future messages to get through. To avoid
accidentally filtering future messages:
Click Mail, then Options (next to the Help link)
Click Junk email Protection
Click Custom Sender List
Click Safe List
Enter this domain: @rte-inc.com (or any other domain)
Click Add
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Yahoo Users:
Please check your "Bulk Mail" folder. If you find an email there
that you wish to receive, select the message and click "Not Spam."
This will help future messages to get through.
--------------------------------------------------------------------------------
Gmail Users:
Please check your "Spam" folder. If you find an email there that you
wish to receive, select the message and click "Not Spam." This will
help future messages to get through.
-------------------------------------------------------------------------------
Outlook 2003 Users:
Select Actions from the top menu bar, then select Junk email
followed by Junk email Options.
Select Safe Senders, then Add.
Type: @rte-inc.com (or any other domain) and click OK.
Type and click OK.
Click OK.Top |
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Warehouse
Management Tips for Physical Count Inventory
Has your warehouse inventory process become overwhelming? Is the
quarterly or annual physical inventory count a dreaded nightmare?
Our experiences with other warehouses have shown that revisiting
some basic ideas can help.
Combine
Bring like inventory together into a single storage location. The
same part shouldn't be in several storage areas unless physical size
dictates a limitation. In that case, keep available quantities to a
minimum and move remainder to a location that isn't part of the
easily accessible storage (overstock location).
Clean
Dispose of items which will not or cannot be used, either as scrap
or as bulk parts sales. Use past inventory counts to identify old
goods, or use past sales as an indicator. If a part hasn't been
used, moved or sold within the past 2 years, is it a viable part? If
a part needs significant work to make it usable, is the needed
investment in work greater than the value of the part when made
usable?
Clear
Clear up work areas at the end of a shift so that excess parts are
returned to storage areas and work areas are emptied out for the
next start of the work day.
Clarify
Label bins and workspaces so that goods are readily identifiable,
limiting the need for "tribal knowledge" of where parts are stored.
If anyone can find a part, then interruptions of experienced
personnel to locate parts are eliminated.
Control
Move excess inventory to controlled storage areas to limit access so
that only needed quantities are in the work areas. How many pieces
need to be made available for today's work? How much stock is kept
in "quick access" areas?
Consider
Rearrange parts and workstations so that work moves through the
process in an orderly fashion, taking into consideration how the
process works to reduce excess movement of people and goods. Each
movement of goods is a cost.
Complete
Complete what has been started, so that goods aren't left "in
process". Then, no one has to pick up the process and "get into the
groove" of what needs to be done.
Summary
If your warehouse needs some help, take a look at
riteSCAN, Mobile Warehouse for
SYSPRO!Top |
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Solutions for a New
Economy
[The] top pressure driving warehouse improvement
at companies deemed "best-in-class" is the high cost and low
availability of warehouse labor. Best-in-class firms ... are now
concentrating on operational efficiency. So, how does a company
achieve this "best-in-class" status?
Actions:
-
Improve warehouse throughput
-
Reduce or contain warehouse labor costs
-
Capabilities
-
Bin-level location management
-
Paperless receiving
-
Real-time put-away and stock moves
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Order picking with mobile devices
-
Incremental cycle-counting
-
Enablers
-
Warehouse management software
-
Wireless networking in the warehouse
-
Mobile warehouse devices (handheld computers,
barcode scanners)
Source: Aberdeen Group, April 1, 2008
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Processing invoices more quickly improves
cash flow
In a
survey of more than 100 accountants by accounting software developer
Coda, 89% of accountants said that cash flow has become a more
important problem for their company in the downturn.
47% said
that invoicing delays are a "definite" or "somewhat" common source
of cash flow problems for their company.
25% of
the respondents estimated that their company has experienced delays
of at least $5,000 a month due to invoicing errors.
In
addition, nearly 17% have seen payments greater than $50,000 delayed
due to invoicing errors.
"Clearly, in the current climate, collection of invoices is
absolutely key," said Coda CEO Jeremy Roche. "Many people said
invoicing delays were constant."
Getting
invoices cleared early and the questions ironed out are an easy way
to improve cash flow, he added.
Source -
http://www.webcpa.com/news/30910-1.html
 Mobile
barcode scanning is a cornerstone of streamlined supply chain
management and warehouse systems.
riteSCAN
automates inventory physical counts, purchase order receiving, job
issues, inventory movements, sales order picking, and much more.
The
transactions processed with riteSCAN are all completed in real-time.
Christie Conant at Downeast Concepts has found:
"... with riteSCAN, Downeast Concepts has increased efficiency and
lowered costs with the ability to track and maintain inventory in
real-time, avoid picking errors, and reduce the manual efforts of
invoicing."
Isn't
it time you took a look at riteSCAN?
View a
recorded presentation today.
In
today's economy, we all need to watch the bottom line, the top line,
and all the lines in between. riteSCAN is designed to help you do
just that.
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