Plan “B” for China

October 17, 2019

Let’s start with the realization that plan “A” to relocate operations to China had a major flaw. If you moved manufacturing to China, India or any other low- cost producing country with the intention of importing goods back to North America or Europe (half a world away), then your plan was unsound!

I was taught to do everything possible to reduce lead-times and increase inventory velocity! Why is this important? Longer lead-times increase inventory. More inventory equates to less profits. Why? Because inventory delays fixing problems. When I see corporations chasing the labor “ghost”, I cringe! Labor typically accounts for 8-12% of the total cost of ownership. But too many leaders only have one play in their play book: to reduce labor costs by moving head count to low cost countries! They are missing 90% of the total cost of ownership!

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Categories: Supply Chain Entropy Busters®

When Ludicrous becomes Scandalous

October 3, 2019

I like to have fun with the words ludicrous and scandalous. By personal definitions are as follows:

Ludicrous; We’ve all been there… Billy always has the crazy ideas. Often, they’re actually worth looking into and determining if they have any substance. However, with any good brainstorming there are the occasional ludicrous ideas. There is absolutely nothing wrong with the occasional ludicrous idea, just don’t spend resources on it.

Scandalous; Is spending time and money on that ludicrous idea…!

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Categories: Art Koch Profit Chain® Tips

5 Fatal Post Go-Live Mistakes that Will Destroy any Successful Systems Implementation.

September 27, 2019

I’m working with a client, and we are ready to Go-Live with a systems implementation for inventory optimization and replenishment planning. We’ve already successfully implemented demand planning, and at this moment, everything is pointing toward another successful launch.

However, spending a few minutes to brainstorm the factors that could go wrong in the post Go-live phase is beneficial. Here are my Top 5 mistakes.

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Categories: Art Koch Profit Chain® Tips

Executive Coaching

September 15, 2019

First understand EVERYONE needs a coach! Every successful person has a coach. Think about this. All sports players have different types of coaches; training, diet, batting, throwing, etc. Entertainers have; voice, acting, diet and training.

Why do we think a leader is broken if they get a coach? Because we assume so!

When working with clients: The first thing I do is to assume no one is broken.

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Categories: Art Koch Profit Chain® Tips

The Rule of 1% = 50%

September 9, 2019

rticle after article has been written about the advantages of complexity reduction and what should be done. However, too often there is little focus on the root cause of entropy creeping into the enterprise. A recent Forbes article outlines the seven steps to reduce complexity. Each step mentioned addresses the symptoms of the illness and not the disease. We are not doing a good enough job of asking, “Do we really need so many exceptions?” or “That’s a really stupid rule”. Rather, we need to be asking, “What’s driving and creating such complexity?”

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Categories: Supply Chain Entropy Busters®