So what is the difference between a vendor and supplier partner?
A vendor supplies products. Examples are; when at a sports or entertainment venue and you buy; soda, beer, food or candy.
Suppliers are enterprises providing goods and services that are recognizable to you as the customer.
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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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At one point in our careers we all have been part of executive development. Some good, some could have been executed better.
I often see mistakes and/or steps missing in executive development implementation. So before jumping in to the deep end of the pool, there are four elements that should be concerned:
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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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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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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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Often, I read that incrementalism is dead. And the way forward is innovation. I view the debate differently.
Within organizations there is a diverse group of people. I see incrementalism and innovation as different tools within a tool chest. You would never think of using a wrench in place of a screw driver. So why would you expect to have a kaizen to address getting the last 0.1% rework out of a bottleneck process?
I believe the biggest error made when working with innovation and incremental tools, is the misalignment assigning individuals to each tool and not understanding the shortcoming of each.
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A couple weeks ago I posted about Cheap is Cheap – Buyer Beware!
I discussed how buying cheap lets entropy into your organizations. We are seeing this play out in real time with the Boeing 737-MAX, DO NOT let this happen to your organization! It looks as though Boeing went with a low price contractor. Here are five things that can help you to avoid this type of error.
Do you have a buyers in a purchasing department or commodity specialist in a procurement departments?
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This is the classic image of a boat representing inventory. The higher the water level, more inventory. The rocks represent problems within the business. As you lower the water level/inventory the problems are exposed.
Remember, Inventory Is Evil!™ – Because it delays and hides problem resolution.
Read articleHow much data do you use to analyze demand when quoting service parts?
If you’re not using at least three years of demand to quote service parts your leaving money on the table.
How are you consolidating the spend? Are you working the rationalize your supply base? Once again, you are likely leaving money on the table. Within in the service parts sector, do your partnership suppliers a favor, consolidate the spend, this will increase their long-term volume and improve total cost of ownership.
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