NCOF Intensive: Making Your Operations More Efficient to ... · Supply Chain Management Optimizing IT Solutions-----Practical Ways to Optimize Labor Costs Smart Sourcing Collaborative

How to run a small / mid-size Operations and reap benefits of a large scale business Page 1

Monday, April 19 (1:30 pm – 4:30 pm)

Intensive: Making Your Operations More Efficient to Generate ROI

Room: Asia 5

Agenda: Current Challenges Companies & Operations are facing

Setting the “Culture” and “Values” in place

Metrics Scorecard---------------Supply Chain Management

Optimizing IT Solutions----------------Practical Ways to Optimize Labor Costs

Smart Sourcing

Collaborative – Take away points

NCOFNCOF

How to run a small / mid-size Operations and reap benefits of a large scale business.

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SPEAKERSSPEAKERS• Mr. Charlie Kantz Vice President Logistics / Warehousing – Bakers Footwear

– Bakers Footwear Group – leading specialty retailer of fashion footwear to young women in the $19 billion footwear market

– Nearly 100 year old retailer- Currently operating in 240 stores in 37 states– 20 yrs retail logistics experience working for companies like Venture Stores, Famous Barr (a division of

May Company, and currently Bakers Footwear Group

• Mr. John Medwin President – Definitive Resources

– Definitive Resources – Core competencies Product Fulfillment / Logistics services– Print Solutions / Mail Services / Business Intelligence– Third-party Fulfillment solutions provider for over a decade – Current locations in S. Fla., Atlanta / opening Nevada ( FY 2010)– Operations & Financial roles within Westinghouse Electric Corp / private industry

• Mr. Richard Hopper Chief Business Officer (CBO) – Definitive Resources

– Entrepreneur of Definitive Resources – (sharing the “good” and “not so good” experiences)– Helped introduce Smartsourcing to the Entrepreneurial world– Former Board member of EO ( Entrepreneurial Organization)– Member of South Florida EO Chapter– Mgmt & Business Dev roles within FedEx / private industry– 12 years NCOF participant

How to run a small / mid-size Operations and reap benefits of a large scale business.

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SURVEY

Private

Public

Start - Up$ 0 - $ 2M

Small$ 1 - $ 10M

Mid$ 10 - $ 50M

Large$ 50M +

Company size

Operations size

No. SKU’s

1 - 100 100 – 1,000 1,000 +

Few Moderate Momentous

No. Employees

1-10 10 -100 100 +

Not-for-profit

Intro

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SURVEYEvolution of Ops

Traditional Progressive Virtual Business Model(Internal w/ select vendors) (In-house with some overseas

vendor supply chain)(Hands-off / Extensive

supply chain)

Primary Reason(s) for Conference Attendance

Software /Enterprise System

S. Fla. /vacation

Process Improvements/

(Ops flow /labor)

Industrykeep pace

trends/Network

Attend this Presentation(hear Charlie /Rich & John)

VendorRelations / Supply chain

Intro

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Setting the “Culture” and “Values” in place



Smart Sourcing



Current Challenges Companies & Operations are facingCurrent Challenges Companies & Operations are facingAgenda

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Current Challenges Companies & Operations are Facing

What are the major issuesaffecting YOU and your OPERATIONS today?

Open / collaborativeOpen / collaborative

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A grim year

a multitude of headache-provoking issuesng contracts, getting trademarks, setting u

worse only 14

for smallbusiness lending …

The SBA loan volume plunged 36% in 2009 as banks slammedtheir vaults shut to small businesses. “USA Today”

Small business challengers tackle legal, logistical hurdles …contend with , such as reviewing lease terms, drafti p back operations, securing licenses, and maintaining websites. “USA Today – Business”

Small banks say they can’twin in business lending…

Across the USA, banks saythere's a big reason they

aren’t lending more: Regulatorswon’t let them. “USA Today”

Is the Economy Really on the Road to Recovery?54% expect things to be the same or going forward, and 46% expect a W-shaped recovery, % expected toHire in the next six months. “All Business”

It’s April 2010 … who’s having fun out there?


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Unemployment tops 20%

7 million

Lost Jobs

minus 3.7million ublican”

in eight California counties…The state was one of five, along with Florida …that reached their highest unemployment rates since the government began keeping track in 1976. “LA Times”

lost jobs: Gone forever?...

Most economists don't expect the employment picture to significantly improve anytime this year -- or overthe next few years for that matter. “Money”

49 of 50 States HaveSince Democrats’ Stimulus …

While the President recently claimed his February 2009 stimulus billwill save … as of Feb 2010 the actual jobs lost cum was at

vs. the forecasted +3.5 million by Dec. 2010. “Rep

It’s April 2010 … who’s having fun out there?


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EconomyEconomy

GlobalizationGlobalization TechnologyTechnology


At the macro level:

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EconomyEconomy

GlobalizationGlobalization TechnologyTechnology

At the micro level:Capital: restricted sources of funding Capital: restricted sources of funding BB--22--C: consumer spending curtailedC: consumer spending curtailed

BB--22--B: Business cutB: Business cut--backs / closingsbacks / closings

Keeping paceKeeping pace

Internal vs. ASPInternal vs. ASP

Virtual world: processes / laborVirtual world: processes / labor

Internal resources vs. outsourcing

Quality / Service levels

Supply chain: schedules / managing


Compliance: GovCompliance: Gov’’t Interventions / Obamacaret Interventions / Obamacare

Culture / Performance Enabler or headacheEnabler or headache

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Economy

Globalization

Restricted sources of funding / capital

Consumer spending curtailed

Business cut-backs / closings



Supply chain / schedules / managing

Operations

Capital equipment reqmts – deferred / cancelled

Inventory levels minimal

Sporadic work loads

Clients / product lines - gone

More regulatory / permits / paperwork changes

Business

Coordination diverse work force / Systems integration

Cost trade-offs: short term vs. life cycle

Cost benefits vs. total quality / time

Fewer internal resources – support / 24 x 7

Fewer internal resources – support / direct labor

Dependable / reliant / reactive vendor relations

Security / regulatory / paperwork protocols

Government compliance

Culture / performance

Current Challenges Companies& Operations are Facing What it means to us in this room:

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Technology

Keeping pace

Virtual world – business / labor

Internal vs. ASP

Operations

Seemingly exponential growth rate

Your own internal I.T. department

Security / Network / Privacy issues

Fewer internal resources – support / direct labor

Business

Enabler or headache?

Current Challenges Companies& Operations are Facing

Glitz or results: mission critical / preferred / wish

Entitlement –or – ownership mentality

Flexibility / Agility

Cross-training / multi-tasking

Skill sets

Fewer internal resources – direct labor

Performance / incentivizing

Inside (legacy) or Out (new)

Labor

Getting things done

Virtual workforce / Quality of work life

3 – 4 careers

Motivators / Entrepreneur vs. employee

What it means to us in this room:

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It’s April 2010 … where are you headed?

Oh boy!Oh boy!

O. K.!O. K.!

Oh s#*&t!Oh s#*&t!


The entrepreneur always searches for change, responds to it, and exploits it as an opportunity.

Peter Drucker

The only thing we know about thefuture is that it will be different.

Peter Drucker

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Current Challenges …



Smart Sourcing



Setting the Setting the ““CultureCulture”” and and ““ValuesValues”” in placein place

Agenda

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Setting the Culture & Values in place

So … What is your Company culture

and WHO sets it?


Definition: A blend of the values, beliefs, taboos, symbols, rituals and myths all companies develop over time

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Legacy“the way its’been”

Collaborative -“we make the

difference”

“They do” “We do”

“Who” sets your OPS culture

“PerformanceOriented”

“What” is your OPS culture“ActivityOriented”

Busy “not myjob”

Efficient “get it’done”


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CULTURE

Customer centric – first viewing the issues thru eyes of customer

Pro-active nature – anticipative solutions perspective

Optimize teamwork – internal and external

Actions: EnsureOperators have broader awareness Understand customer requirement, need, delivery

“PerformanceOriented”

“ActivityOriented”

Actions: EnsureWhy --- not just howUnderstand entire scope – not just current process

Actions: EnsureHand off – to – pass offUnderstand operator impact to entire team effortDialogue / meet with team – NOT individuals

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VALUES

Accountability with Responsibility – job role with job resultsActions: Ensure

Cost smartOperationally efficient

“Wedo”

“Theydo”

Demonstrated commitment – entitlement is historyActions: Ensure

Continuous improvement Understand

Difference Makers – make a difference – for your company & for yourselfActions: Ensure

Feedback from customersRecognize

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Right players on the bus – players first – then processes

Company Manual / H R guidelines – setting and defining expectations


BEST OF BREED PRACTICES

Performance Valuations – timely, meaningful, and candid!

Standard Operating Procedures – if you don’t have – develop them!

Focus on Leadership – Leaders do the right things – Managers do things right

Strategic then Tactical – Don’t lose sight of the forest – when in the trees

Lead

Manage

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Components in a Company Culture

• Create value and belief statements

• Practice effective communication– Daily Huddles, weekly meetings, Monthly reviews

• Have or Create an organizational structure

• Rewards and Recognition– You can not cannot just reward individual performance if the

requirements of your organizational culture specify team work

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Low Cost Ideas to build cultures

• Celebrate the new hires– Send a welcome card before they start– Have cake the 2nd day they start

• Sing off key on birthdays• Seasonal events

– Baseball lunch– Favorite football team apparel day– Olympic department events

• Recognize results• Others?

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Is all this culture worth it?????

• Whatever shape it takes, your company culture plays a big role in determining how well your business will do and can do in the future.

• Companies with an adaptive culture that align to their business goals routinely outperform their competitors. Some studies report the difference at 200% or more.

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Setting the “Culture”

…---------------Supply Chain Management


Smart Sourcing



Metrics ScorecardMetrics Scorecard

Agenda

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METRICS SCORECARDMETRICS SCORECARD

What drives YOUR Operations?


“How to run a small / mid-size Operations and reap benefits of a large scale business.”


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# orde

rs pro

cess

ed velocity

raw material

finished goods

Work-in-process

purchase orders

receiving

turn-around time

Manufacturing cycle time

On-time delivery

Average hours O/T

Capacity utilization

Average days inventory

Efficiency rate

?

??

?

?

OSHA safety incidentsSupply chain delivery

ROI

Margin contribution

Cost variances

Capital assetutilization

Labor cost per unit

Labor hours

No. e

mpl

oyee

s

product sales?

?

Q&A index

Customer reject ratesGetting orders out!

Cost cuts / savings

Vendor compliance

That which gets measured … gets managedPeter Drucker

Most of what we call management consists of makingIt difficult for people to get their work done. Peter Drucker

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Maybe more reasonable to ask what doesn’t?

“About 120 KPI’s are reported and of those, a handful is important”anonymous quote

More relevant question:

Are you good at what you do “efficiency” --- and ---are you good at making money (“profitability”)?

What drives YOUR efficiency anddrives YOUR profitability?

Restated:

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Question 1:

As the Operations manager, when do you know your month’s performance?

-- or stated another way -- when should you know your month’s performance – and perhaps as importantly, when should others know?

Who in this room is an

OPERATIONS MANAGER ?

Efficiency

Who in this room is an

ACCOUNTING MANAGER ?

ProfitabilityQuestion 3:

How do you talk – “convert” – to one another?

Question 2:

Out of the drivers, which single criteria most defines your performanceto your ownership stakeholders?

Questions…

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Answers

When should you know your month’s performance –

On a CURRENT basis (i.e., daily /weekly)

Which single criteria most defines your performance to ownership:

MARGIN CONTRIBUTION

How do you talk to Accounting:

CONVERT

Conversionfactor

Labor Hours / Units Produced“Margin Contribution”

(1- Labor Costs) / Sales $ of Units

Ops “talk” Finance “talk”

“Efficiencies” Convert “Profitability”

Answers…

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TOOLS

Operations Accounting

Job Order System

Time entries / job account

Orders Shipped (“sales”)

Payroll labor rates

Employee

Unit sale pricing

Monday MetricsWeekly Scorecard

Daily / Weekly reporting capabilities

Current + ConvertOps units to Acctg SalesOps labor hours to Acctg costs

= “snapshot” margin contribution

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NCOF -- SAMPLE WEEKLY METRICS REPORTProducts Division - TEAM B

JOB COSTING / RATE ALLOCATIONS

EmployeeName jobname TaskName HRS $/hr Total Costs Receiving Kitting Pick/Pack Other/Misc TotalG. Tim Comp A Pick/Pack 20.3 $14.40 $292.75

T. Twana Comp A Pick/Pack 3.6 $13.20 $47.52A. Keith Comp A Receiving 0.0 $13.20 $0.00G. Tim Comp A Receiving 1.5 $14.40 $21.31G. Tim Comp A Shipping 0.7 $14.40 $10.37

T. Twana Comp A Shipping 0.5 $13.20 $7.00 $21.31 $340.27 $17.36 $378.95

A. Keith Misc M Pick/Pack 0.3 $13.20 $3.30B. Earl Misc M Pick/Pack 0.5 $12.50 $6.25

W. John Misc M Pick/Pack 0.5 $15.35 $7.37 $16.92 $16.92

A. Keith Comp B Pick/Pack 6.2 $13.20 $81.84G. Tim Comp B Pick/Pack 0.4 $14.40 $6.05

T. Twana Comp B Pick/Pack 7.2 $13.20 $95.04W. John Comp B Pick/Pack 8.7 $15.35 $133.22G. Tim Comp B Receiving 3.5 $14.40 $50.40

W. John Comp B Stocking 0.5 $15.35 $7.98 $50.40 $316.15 $7.98 $374.53

W. John Comp C Receiving 4.5 $15.35 $69.07A. Keith Comp C Pick/Pack 0.7 $13.20 $9.24

B. German Comp C Pick/Pack 1.1 $15.12 $17.09G. Tim Comp C Pick/Pack 10.9 $14.40 $156.96B. Earl Comp C Pick/Pack 20.4 $12.50 $255.00

T. Tawana Comp C Pick/Pack 0.4 $13.20 $5.02W. John Comp C Pick/Pack 13.9 $15.35 $213.80W. John Comp C Stocking 0.2 $15.35 $3.53 $69.07 $657.10 $3.53 $729.70

W. John Comp D Pick/Pack 9.4 $15.35 $143.96 $143.96 $143.96

A. Keith Def Res15 Min Break 0.3 $13.20 $3.56

B. German Def Res15 Min Break 0.2 $15.12 $3.48

A. KeithDirect 2

Fulfillment

Inventory Maintenen

ce 0.4 $13.20 $5.02

G. TimDirect 2

Fulfillment

Inventory Maintenen

ce 4.5 $14.40 $64.08

T. TawanaDirect 2

Fulfillment

Inventory Maintenen

ce 1.0 $13.20 $13.60

T. TawanaDirect 2

Fulfillment Misc/Other 0.3 $13.20 $4.36 $94.09 $94.09

T. Tawana Comp F Pick/Pack 5.3 $13.20 $69.96W. John Comp F Pick/Pack 0.5 $15.35 $6.91 $76.87 $76.87

Costing

perspective“Convert Ops to Acctg”

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Products Division - TEAM B RECEIVING Actual Program

ORDERS / SALES # OF HRS RATE TTL REC # KITS RATE TTL KIT # OF PCS RATE TTL P/P Labor Costs Margin Margin %Comp A 1.50 25.00$ 37.50$ 0 25.00$ -$ 37 22.00$ 814.00$ 851.50$ 37 $378.95 472.55$ 55.50%

Comp B 0.50 18.00$ 9.00$ -$ 515 1.42$ 731.30$ 740.30$ 117 $374.53 365.77$ 49.41%

Comp C 3.50 25.00$ 87.50$ CONSUMER 0 25.00$ 156 0.55$ 156

CORPORATE 0 0.05$ 250 1.60$ 225 $729.70 593.60$ 44.86%SALES/TRADE 0 50.00$ 625 1.20$ 567

Comp D - 30.00$ -$ 0 25.00$ -$ 17 3.00$ 167 2.25$ 67 $143.96 57.79$ 28.64%

Comp F 25.00$ -$ 25.00$ -$ 85 1.45$ 123.25$ 123.25$ 85 $76.87 46.38$ 37.63%

Comp G 6.70 25.00$ 167.50$ 18.75$ -$ 594 2.15$ 1,277.10$ 1,444.60$ 555 $733.16 711.44$ 49.25%

Comp H - 25.00$ -$ 0 25.00$ -$ 33 2.40$ 79.20$ 79.20$ 33 $47.27 31.93$ 40.31%

Comp L - 25.00$ -$ 25.00$ -$ 346 2.05$ 878.05$ 567 $483.45 394.60$ 44.94%675 0.25$

Comp M - 30.00$ -$ -$ 306 1.45$ 443.70$ 443.70$ 306 $322.92 120.78$ 27.22%

Comp N - 25.00$ -$ 0 25.00$ -$ 8 12.50$ 100.00$ 100.00$ 1 $37.44 62.56$ 62.56%

25.00$ -$ -$ 0 -$ #DIV/0!

Comp P - 25.00$ -$ -$ 55 1.85$ 101.75$ 101.75$ 55 $57.82 43.93$ 43.18%

TOTAL 12.20 301.50$ 0 -$ 3,769 5,985.90$ 6,287.40$ 2,772 $3,386.06

6,601.35$ # OF PKGS RATE

DEPARTMENT NAME $/HR Reg Hrs OT Hrs TOTAL - $ Misc 299 1.05$ 313.95W/ H - Team B A. Keith 13.20$ 40.0 527.34$ Misc 0 0.35$ W/ H - Team B B. German 11.25$ 38.3 431.21$ Misc 0 1.05$ W/ H - Team B G. Tim 14.40$ 51.1 11.1 859.68$ -$ W/ H - Team B T. Tawana 13.20$ 31.8 419.76$ TTL 313.95W/ H - Team B W. John 15.35$ 48.0 8.0 797.94$ W/ H - Team B B. Earl 12.50$ 39.9 498.75$

249.0 19.1 3,534.69$

TTL MARGIN 3,066.66$ Variance to Objective

3,534.69$ MARGIN % 46.5% Wk Objective 42.5% 4.0%

NCOF -- SAMPLE WEEKLY METRICS REPORT

Trade Show Order --> 201.75$

Total

Consumer Orders -->

Orders

201.75$

Orders

NOTES

1,323.30$ Sales & M

TTL WH LABOR

Orders

Notes

TTL WH REVENUE

8.0 O/T - authorized

Consume

KITTING PICK/PACK

$0.00 1,235.80$

Orders

Orders

Orders

Orders

8.0 allocated to Div A

TTL CUST REV # OF ORDERSOrders

ConsumeCorporate

Trade/Cor

Orders

Orders

878.05$

OTHER REVENUE

8.0 O/T - authorized

Acctg Revenue Ops costs

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Monday MetricsWeekly Scorecard

Can be prepared “seamlessly” thru systems integration export capabilities

Prepared WITH and FOR the Operations Mgr prior to presentation

Allows for “real time” management decision making by Ops Mgmt

Four weeks a month – fosters the managing of expectations along with results

Not waiting until end of month financial reporting to find out YOUR contributionmargin to the company’s financial position

Becomes “the” working document between Operations and Accounting

Enables “current” resolution of reporting glitches and/or jobs “fall thru cracks”

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Metrics Scorecard…---------------


Smart Sourcing



Supply Chain ManagementSupply Chain Management

Agenda

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Supply Chain Management

• Movement of goods from origin to final destination.

• International• Domestic• 3PLs

• Process to manage

Supply ChainManagement

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What are Upstream Improvements?

• Things that can be done earlier in the Supply Chain

• Opportunities for you to work closer with your vendor/factory base

• Creates Value Added benefits for you by your vendor.


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Examples of Upstream Improvements

• Factory• Labeling merchandise• Labeling cartons• Security Tags

• International Freight Forwarders• Labeling Cartons• Inspections• Cubing and weighing of cartons• Sort and Segregating


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Examples of Upstream Improvements

• 3PL• Labeling for final destination• Sorting and Segregation• Redirecting of cartons• Inspections• Repacking• Cubing and weighing of cartons• Pick and Pack• Warehousing


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Why Upstream Improvements?

• Ability to fix a problem earlier in the chain.

• Ability to do redundant work at a lower cost.

• Ability to flow goods faster to final destination.


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Why do you want Strategic Partners?

• Allows you to reduce your cost and them to add value added services.

• Makes both of you rely on each other• Working together to find ways of doing

things.• Not necessarily vendors only (carriers,

3PLs)


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What Strategic Partners do

• Warehouse operations

• Operation efficiencies

• System enhancements

• Innovation


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----------------Practical Ways to Optimize Labor Costs

Smart Sourcing



Optimizing IT SolutionsOptimizing IT Solutions

Agenda

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Optimizing IT SolutionsOptimizingI.T. Solutions

VISIBILITY – Full Circle IT

INTEGRATE YOUR PROCESSES

PUSH DATA

GET MOBILE

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What do you get from Visibility?

• Knowledge

• Communication

• Flexibility

OptimizingI.T. Solutions

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Visibility Supply ChainSupply

BaseConsol Center

LA 3PL Warehouse

RetailStores

BakersHQ

BOOKING CREATED

SCANRECEIPTS

PRINT CARTONLABELS

AVAILABILITY

‘LAST MINUTE’ALLOCATIONS

SHIPMENT LABELS

PLD to SMALL PACKAGE CARRIER

SCAN TOCONTAINER

SCANRECEIPTS

ACCEPT BOOKING

DELIVERSHIPMENT

Accept ‘booking’ if in compliance with Ship Window

STORE DELIVERIES

SHIPMENT LABELS

OR


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Full Circle Solution

BAKER’S SCM SOLUTIONDashboardTrackingShipping


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INTEGRATE YOUR PROCESSESThe convergence of disjointed systems80%+ of Web Site e-commerce engines are disjointed:

e-bay, Yahoo shopping, Volusion, global Web, home-grown.

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Common - Disjointed E-Commerce Processes


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Integrated - OptimizedOptimizingI.T. Solutions

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Which do you want?OptimizingI.T. Solutions

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To change or Not to Change• Data Entry of Order- 100 orders per day

– 3 minutes for entry, verification and correction– 3x100=300 minutes/60 per hour=5 hrs p/day– 5 hrs x $12 p/hr x 250 working days $15,000.00 per year

• Order Import takes 1 hr per day – 1x12 x 250 working days $3000.00 plus a program cost of $2000

Total Savings $10,000


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Push Vs PullValue Added Services

to Your Customers

• Push:– Proactively disseminating information to the

appropriate individual• Pull:

– Requires the individual to retrieve the necessary data

Benefits to your customer: The convenience and up-front timing of getting information versus retrieving data.


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Data Push• Vendor > Partner:

» Conversion of shopping cart into Order Entry system» E-mail with new orders» Email from suppliers with new shipment notification

(E-ASN)» SMS to remote users» Dashboard for operational resources

• Internal > Internal: » Email for problem resolution» SMS to remote users

• Partner > Customer/Client: » Email to customer for order status» SMS to remote users


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Mobility

• Wireless Devices:» UPS Tracking» Barcode scanning» Custom (SAAS) apps» Mobile adaptable Websites» Zip code price checkers» Wireless Scanners» RFID tags


Bring the data to the moving Masses (Operators, Managers, Customers)

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• Cloud Computing• Corporate Business Continuity Plan• Allows company mobility• Secures Business continuity• Outsourced computing resources• Cost Effective Big Forklift

Clouds in my coffeeUnclouding the information for business growth


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Optimizing IT Solutions----------------

Smart Sourcing



Practical Ways to Optimize Labor CostsPractical Ways to Optimize Labor Costs

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Practical Ways toOptimize labor costs

Cross Train / Multi-task

Flexible work weeks / less than 40 hour work weeks

INTERNAL – “traditional”

Practical Ways to Optimize Labor Costs

Q&A / Performance – monitor efficiency & quality

Develop and implement incentive programs

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INTERNAL – “traditional”


Utilize temps /1099 – for non-critical processes

Seek schedule accommodations – work with Sales

Align compensation practices to induce improvements

Shift away from annual “entitlements” / freeze some benefits

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Cost savings thru core competent partners

Cost savings with less H R / benefits (e.g. “Obamacare”)

SMART SOURCE – “virtual”


Defer / delay / minimize consulting fees

Eliminate services where practical: cleaning / shredding, etc.

Upstream tasks at most appropriate place / time

Utilize technology to your benefit – integrate out redundancy

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How to Streamline processes

• 2nd set of eyes• Better way of doing it• Redundancy• Real need?

• Upstream Process improvements• Innovation• Magazine articles• Trade Shows


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Working with others inside your company

• Communication with internal team

• What you think is better might have problems down the line.

• Listen and work towards a resolution.

• If at first you don’t succeed, Keep trying.


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Practical Ways to optimize…



Smart SourcingSmart Sourcing

Agenda

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SMART SOURCE

What’s RIGHT for you?

In-source Out-sourceCombination

costs

processes

employeesschedules

qualitymanagement

investment

liability

Smart Sourcing

delivery

logistics

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In-Sourcing

• Complexity• How difficult is the process you are doing?• Specialized equipment or knowledge?

• Security• High Value goods that need constant supervision?

• Timing• Cost• Location

Smart Sourcing

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Out-Sourcing• What are your core competencies?

• Once you answer this deceptively simple question, you will begin to shed all activities that take you away from your core competencies.

• Cost – Quality - Time• Evaluate on a three dimension criteria of total value

• Convert fixed costs to variable costs• Utilize a pay for what you use relationship

• Superior Process• Benefit from best of breed processes and depth in experience

• Strategic Partnership• Accrue the benefits that come from resources solely dedicated

• Trust vs. control• Evolve to the transition unfolding globally and technically

• Re-align to manage results – not tasks• Focus on that which is most important – performance

Smart Sourcing

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Combination

• Multiple locations• Regional locations

• Flow out to customers• Peak times of year, outsource part of business to

flow faster.

• Cost• Look at this from all points.

Smart Sourcing

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Practical Ways to optimize…

Smart Sourcing


Collaborative Collaborative -- Take Away PointsTake Away Points

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Entrepreneurial Principles thatcan be Applied to any Size Business

Take AwayPoints

Make constant change a part of everyday business

Invest in your people and create a culture

Trust in others so YOU can delegate and grow

Focus on your strategy: it’s easier to carve a niche than create a market

Seek advise and input – but follow Collin Powell’s 30%-70% decision making criteria

Listen to customers – they have some of the best ideas

Protect your brand

Think BIG even if you’re small!

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Negotiation Strategies to lower your costs

Take AwayPoints

Negotiate no matter how small you thinkyou are

Always have secondary sources

Write a simple Request for Proposal

Don’t get too comfortable with the status quo

If you’re not embarrassed, you didn’t askfor enough

Money is not the only issue…

Things (VALUE) that can be Negotiated

Palletizing requirements

Time of day delivery

Warehousing additional product for you

Time sequencing product flow / payments

Co-op advertising

Over / under run rate

Discounts / bonus / penalty stipulations

Extended payment terms

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TODAY’S THOUGHTS to TODAY’S CHALLENGES

Take AwayPoints

Economy

Globalization

Restricted sources of funding / capital

Consumer spending curtailed

Business cut-backs / closings

Government compliance



Supply chain / schedules / managing

Culture / performance

Reap the benefits of “upstream” Supply chain– learn to manage and harness

Make decisions on total value, not just short-term costs– Value: Quality + Schedule + Costs

Instill a culture of what you CAN do – not what you can’t

Until things turn around, make the best of what you have– “survive then thrive”

Step up to manage your business– not your business manage you

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TODAY’S THOUGHTS to TODAY’S CHALLENGES

Take AwayPoints

Labor

Technology

Always be thinking Value Added to your customers - external and internal

Focus on performance and benefits to YOU – not glitz

Integrate throughout your Ops organization– make users “champions”

Candidly recognize your Core competencies - smart source accordingly

Instill flexibility and agility– cross train

Getting things done

Virtual workforce / Quality of work life

3 – 4 careers

Motivators / Entrepreneur vs. employee

Get the right employees on the bus– delegate and empower

Keeping pace

Virtual world – business / labor

Internal vs. ASP

Enabler or headache?

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It’s April 2010 … where are you headed?

Wahoo!!Wahoo!!


The only thing we know about the future is that it will be different. Peter Drucker

THE PLAN

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Documents

NCOF Intensive: Making Your Operations More Efficient to ... · Supply Chain Management Optimizing IT Solutions-----Practical Ways to Optimize Labor Costs Smart Sourcing Collaborative