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GENERAL BUSINESS CONSULTANTS SPECIALISTS IN " SYSTEMS" AND MORE-PROFITABLE OPERATIONS - For Distributors, WHOLESALERS, Manufacturers
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TYPICAL PROJECTS Long Range Business/Systems Planning A 70-location distributor of plumbing, HVAC and pipe/valves/fittings was half-way through a lengthy re-write of their home grown software, and had a large IT department, when the Chairman wondered whether this approach was better than getting packaged software. He contacted us to get the answer to his question. We examined the structure and features of the system, its ability to support planned expansion. Then we estimated the costs of retaining the system vs. replacing it, and made our recommendation. As part of the investigation we evaluated the cost-benefits of replacing RF in the central distribution facility with advanced warehouse technologies . A16-location of distributor of electrical supplies wasn't sure whether to keep their old system or replace it. We examined the structure and features of the heavily modified system, the extent of modifications, its ability to support future enhancements and add-ons, and the likely level of future support. Then we estimated the costs of enhancing the system vs. replacing it, and made our recommendation. The president of a world-wide manufacturer of solder and chemicals wasn't sure if obtaining MRP software would reduce inventories and/or production cycle time. We conducted a feasibility/justification study (that also addressed adding new accounting applications and whether to increase the speed of data communications to remote US plants). Executives of a 110-location distributor of plumbing, A/C, electrical and industrial supplies wanted to reduce inventory but were having difficulty doing so. And with so many branches, they wondered if regional warehouses would save money without hurting customer service; and if a central buying function would improve inventory levels while reducing costs. We studied the inventory management and purchasing functions of their (in-house developed) software; visited branches to examine procedures and controls, and understand how branch buyers function; gathered data about the costs and savings from operating a regional warehouse and centralizing buying. Then we recommend changes in software, and procedures and controls, that dramatically reduced the inventory level as sales grew; and made recommendations about a regional warehouse and central buying that further reduced their costs. A 10-location distributor of wood products used by makers of cabinets, display cases and furniture was planning to add 5 more locations, and all would stock a complete, expensive line. He wondered if one or two distribution facilities to replenish branches would enable the branches to reduce inventory without hurting customer service. We conducted a detailed study and told him what to do. A vertically integrated manufacturer of steel and forged/machined die blocks had developed (in house) several administrative software applications, but wasn't making much progress on applications for operations. We developed a long range data processing plan that defined the applications to develop, hardware upgrading, and changes in MIS personnel. A four-location manufacturer of electrical supplies wanted to increase the accuracy of inventory data, but wasn't sure if a warehouse management system (WMS) would be justified. We conducted a multi-plant study and recommended some new technology.
System Selection, Contract Negotiation, and Installation A large distributor of paper, packaging and janitorial/sanitary supplies wanted to get a new ERP computer system that supported such functions as integrated FAXing, e-Commerce, and warehouse management. But, the principals didn't know what features to look for and which systems to examine. We helped them get the most cost-effective system for their specific needs. We sent them a checklist of potential features applicable to that industry; discussed their answers to the checklist; created a needs-definition; researched available systems and identified possible suitable ones; sent vendors the needs-definition and evaluated vendors responses; conducted scripted demos; modified the selected vendor's contract by adding specific performance guarantees, and negotiated it; monitored installation. A two-plant contract metal stamper was examining three MRP systems, but didn't know how to select the most cost-effective one or how they were going to install the system -- none of the managers had the knowledge or time to do it. We thoroughly evaluated the candidates, and made the recommendation based on cost and intangible yet critical factors. And we amended and negotiated the contract with the system vendor. Then we actively participated in the installation: organizing installation teams; examining procedures and controls, and defining changes needed to accommodate the system; monitoring software modifications; determining the configuration for a shop floor data collection system; developing a plan to implement JIT principles (to increase plant efficiency and part quality) The president of a 25+ location distributor of plumbing, A/C and electrical supplies wanted to replace the old, batch-processing system, but didn't know whether to get one computer for the entire company, or one computer at each location. We conducted a feasibility/justification study, and recommended the arrangement to use. Then we sent them a checklist of potential features applicable to their industry; discussed their answers to the checklist; created a needs-definition; researched available systems and identified possible suitable ones; sent vendors the needs-definition and evaluated vendors responses; conducted scripted demos; modified the selected vendor's contract and negotiated it; monitored installation. A multi-location Mexican distributor of paper and converter of paper into retail packs wanted to replace its ERP system, but wasn't sure if there was anything in Mexico that would meet their needs. We conducted a study that identified several potentially suitable systems. A multi-location distributor of wood and engineered materials wanted to interface a 3rd-party WMS to its ERP, but was concerned that an interface would violate its contract. We studied the contract, and provided guidance on the propriety of the interface (which was made).
Profit and Customer-Service Improvement (including more-profitable matrix pricing)
The
VP - Finance of a 6-location electrical wholesaler had the feeling that
employees weren't using the system as profitably as possibly. He was right. We helped
them use the system in ways that reduced inventory and increased gross margin
revenue. The principals of a 24-location distributor of plumbing, A/C, pipe/valves/fittings and building materials wanted to increases prices but didn't know how to do it without angering many customers. We showed them how to use our advanced matrix-pricing method to achieve increases that most customers wouldn't notice. We did the same for a 2-location distributorship of residential and commercial lighting, with showrooms, and for a large distributor of paper, janitorial, sanitary and foodservice-disposable supplies. The 2nd generation managers of a 14-location distributor of electrical supplies and lighting fixtures had expanded the business significantly. But inventory had soared too much, yet branch managers were complaining of stock outs. And, the owners knew they were "leaving money on the table" but didn't know how to raise prices without customers complaining. We helped them modify and use the system in ways that substantially reduced inventory while increasing customer service; and in ways that replenished branches in a timelier manner and with adequate quantities. We also showed them how to use the system to increase prices in a way that minimizes customer detection of the increases.
Improving Inventory Control, and Warehouse Operations A 17-location distributor of electrical supplies had opened a new central distribution facility to mainly serve customers (and replenish branches), but due to rapid continued growth, the level of staffing had increased too much, and items were getting "lost." We studied the layout, operations and delivery logistics of the facility, and recommended changes to dramatically reduce staffing, wasted time and operating costs. And we conducted a feasibility/justification study for WMS, Pick To Light (PTL) and Voice Directed Picking (VDP). Then we developed an RFP for the WMS, evaluated responses to the RFP, conducted demos of four systems, identified the most cost-effective WMS, created a contract for the WMS and for the PTL, and negotiated the WMS contract. (We also developed an RFP for an ERP system, evaluated responses, and planned and participated in demos). A world-wide manufacturer of solder and chemicals was having problems with the timeliness and quality of product line that was critical to the future of the company. We recommended changes in production methods and process, the organizational structure, and production planning and control. The changes resolved the problems. A few years later, the president asked us to determine how the company could, without increasing cost, drastically reduce lead times so they could charge extra for rush orders. They implemented our recommendations for reconfiguring machinery, changing set-up procedures and procedures for operating machines, and changing procedures for shipping. The owner of a 2-location distributorship of residential and commercial lighting, with showrooms, wanted to implement a bar coding system for printing labels and reading code numbers, but didn't have the staff-knowledge or time to do it. We developed a multi-phase plan for implementing bar coding in steps, helped determine the type and brand of equipment, and monitored the installation, testing and phase 1 use of the equipment. The main plant of a 7-plant molder of plastic packaging components and products was experiencing problems shipping accurately and on time. We conducted a study of product and information flow, and made several recommendations: an expanded stocking program; timelier reporting of scrap; using bar code scanning at additional steps; storing products in a way that reduces damage; not printing a pick ticket until it is time to pick (and so avoid losing pick tickets). An 11-location distributor of paper, janitorial/sanitary supplies, foodservice equipment and disposables was suffering from too many stock outs and too much inventory. We studied the way they purchased and managed inventory, and then showed buyers and product managers how to use their system in different ways to increase the level of customer service while decreasing the level of inventory. We then trained people in the new ways of inventory management, and developed a plan to make the purchasing process much faster and efficient. A four-location distributor of wood, wood products and other materials to cabinet and furniture manufacturers was suffering from too many stock outs and too much inventory. We showed the buyers how to use their system in different ways to increase the level of customer service while decreasing the level of inventory. The executive vice president of a distributor of paper, packaging, jan-san and foodservice disposables had tried for quite a while to reduce the level of errors being made in the warehouse. In just one day we identified 12 reasons that errors were occurring, and recommended quick, inexpensive changes that dramatically reduced the level of errors.
Super-Sizing Profits and Customer Service A 350-location distributor of plumbing, pipe/valves/fittings, air-conditioning, electrical and industrial supplies does all data processing takes place at corporate headquarters. Executive management wanted to use the system to automatically increase prices -- without hiring anyone. We showed them how to do that by describing unique formulas and rules for "mining" data and determining when to raise the price for a customer and item, and how much to raise it. A 12-location distributor of motion-control equipment and supplies had made several acquisitions in a short period of time, which greatly increased the breadth and depth of their inventory. They could no longer effectively manage the inventory, but didn't want to hire any people; they wanted to use their system to do so. We showed them the most sophisticated and beneficial features of our method for increasing return on inventory investment and related customer service.
Business/Systems Continuity Planning After two system failures within a few years, including one that lasted for several days, the owner of a 7-plant plastics molding, fabricating and distributing company wanted to ensure that such failures would not occur again. Working with the MIS Director, we developed a plan for increased redundancy at several levels, and created the framework of a manual for operating the company without chaos should the system ever be down again for any length of time.
E-Commerce Improvement/Planning The owners of an 11-location distributor of wood, wood products, composition board and recycled wood wanted a Web site for each division, but didn't know how to go about doing it. We developed a detailed multi-phase E-commerce plan, including functions of each site, integration with the main system, changes in business functions and marketing efforts. Then we helped them find a Web site developer, and monitored the development of the two sites.
Digital Communications Planning After getting a new computer system, owners of a 12-location distributor of building materials realized that data communications costs were very high. We analyzed the then-existing data communications structure, and made recommendations for changing the structure in a way that reduced on-going costs.
LITIGATION SUPPORT AND EXPERT TESTIMONY Counsel for a multi-location hardgoods distributor contacted us to meet and review the contract and correspondence between their client and the system provider who had failed to provide some customized global functionality that the client relied upon in selecting the system. We explained to counsel what was and was not promised in the contract, which was different than what had been promised in prior correspondence and verbally. A large softgoods distributor contacted us about modifications that the system vendor had not delivered or delivered in unusable form; a failure which prevented the distributor from using the system. After reading technical specifications for the mods and copies of the vendor's billing logs, we met with the distributor and their counsel and described how the process should have worked and where the vendor was deficient.
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