Friday, September 23, 2016

Show Me The Money!

This famous line from the 1996 movie titled "Jerry Maguire" captured pop culture for a while. Many can still hear Cuba Gooding Jr. asking his agent to show him the money.  While the film takes a lot of turns and involves a lot more story content, it appears that in the end, the character of Rod Tidwell, played by Cuba Gooding Jr., wants to receive that lucrative free agent contract signing and the money that comes with it. 
Well, most of us will never know the feeling of getting that type of financial windfall for our ability to play and succeed in professional sports. However, I do believe most people want to feel appreciated for the work and effort they put in at work.  Just this past week, ACT completed their annual customer appreciation golf event where ACT folks worked hard to show our customers our appreciation for their business and loyalty.

We realize we live in a very competitive world with lots of options vying for business and opportunities, so customers are at the core of all our decisions.  When we stop focusing on our customers, we begin a downward spiral toward mediocrity and lose the business we have worked so hard to earn.  ACT invited hundreds of customers to this annual event and had a wonderful time at the course.  It is not about lavish gifts and enticing people to do business with us based on the things we give them. Rather it is about the ongoing value of business partnership and the rewards that come with a value added relationship throughout the year.

We strive hard to proactively bring experience based solutions to our customers year round. We like to believe we "show them the money" year round and the annual golf event is simply a time to relax for one day and enjoy a short time together with the challenge of a golf course instead of the business world.  We can afford to take one day off work to celebrate because we work hard the other days of the year delivering solutions and assisting customers with implementation of new products and services. 
I would like to take one brief moment to publicly say thank you to the ACT associate volunteers.  Our associates did a great job putting together and pulling off this customer appreciation event. These are the people delivering solutions, and they did an awesome job of working this event so things went smooth and our customers had a great time at the course.  ACT Team, well done.

Friday, September 16, 2016

Protecting Facility Investments - What Is Your Strategy?

I really enjoy my visits with a prospect or customer and getting a tour of the facility. I am encouraged by those tour leaders and their excitement for completed, current, and future projects.  ACT works hard to keep our facilities up to date, safe, and clean.  There are ways for us to protect our investment, and most are simple and low cost items.  But it takes a strategy and plan to complete the investment protection part of a project.  I believe a small investment in protection systems continues to promote the idea of the project while protecting the project from damage and extra costs.
Here are some examples to consider:

Let's say you have a new door installed that connects parts of your facility. Don't let all the expense for the project go to the installation and equipment. Set up some protection for that investment. The picture above shows a yellow overhead door track protector and this device calls attention to the door, protects the track, and enhances the initial project while reducing maintenance costs for damage.  Costs?  Less than $100 for a 36" tall protector.

How about the dock area?  Let's say have a near miss accident due to early departure of a tractor/trailer.  Your project to address the situation is to add a wheel chock program. Add the wheel chocks as well as the signage and checklist to the dock area wall. Costs?  $65.  Confirm to associates and visitors your desire for a safe work environment. 

The list is endless, and that is why finding the right material handling equipment partner is so important. A simple facility review and tour can result in cost saving ideas that increase safety and OSHA compliance for your company. Let the material handling experts assist with ideas and brainstorming, and if the ideas are strong and value adding, then let them propose the project to your team.

Friday, September 2, 2016

Onsite Parts Inventory – Good or Bad Idea

 For companies that either do their own maintenance, or have a fleet of equipment, onsite parts inventory can be a good solution to some common problems.  Onsite inventories can also lead to more problems, so it can be a bad idea as well.  Let’s take a quick look at this potential solution.

Onsite inventory comes in many different forms, varieties, and the pros and cons vary with each form. Most common is the consignment inventory.  Let’s start with a simple definition: Consignment Inventory is inventory that is in the possession of the customer, but is still owned by the supplier.

In other words, the supplier places some of his inventory in his customer’s possession (in their warehouse) and allows them to consume directly from his stock. The customer purchases the inventory only after he has consumed it.

The key benefit to the customer should be obvious; he does not have to tie up his capital in inventory. The customer does have some inventory carrying costs as he still incurs costs related to storing and managing the inventory. Another benefit is the reduction in customer down time as equipment has needed repair parts at the facility, so repair time is reduced and productivity increases. Another benefit can be savings in freight cost for parts shipped in overnight for down equipment.   One of the potential disadvantages is security and accuracy of the consignment parts. Who has access to the parts? Are the parts secure? Are the parts being accounted for accurately when used?  Typically, companies providing consignment inventories conduct quarterly inventories so problems can be detected quickly and potential issues and solutions discussed and implemented. So, there is shared risk/shared benefit and the two companies are partners in this solution.

Another form of onsite inventory we see implemented by some customers is a secured area for parts storage on site. It has many of the benefits above; reduced downtime, increased productivity, cost savings due to volume purchases, reduced freight expense, etc. The customer buys these parts as the parts are entered into the storage area.  This approach works best for customers that have a good parts management system already in place. It can work better for customers with high security concerns due to the nature of their business.  The need for onsite vendor provided inventory checks are removed or reduced, as inventory management, usage policies, and access are all customer controlled and regulated as the shared risk of the vendor has been removed due to the upfront purchase.

Agreement Issues to Review
·      Both parties need to clearly understand the terms.
·      When does the sale occur?
·      Time limit (must be purchased or returned within specified period).
·      What is the freight policy?
·      What is the return policy?
·      Who holds responsibility for damage or loss while in customer’s possession?
·      What are the Insurance implications?
·      Exactly how and when is data exchanged? What data is exchanged?
·      How are miscellaneous transactions processed?
     o   Cycle count adjustments,
     o   Customer Returns (does a return initiate a credit from the supplier?)
     o   Scrap

It's very important to realize that consignment inventory will almost always add costs to the supply chain. Use it when it provides benefits that surpass the added costs. One of the most critical factors for consideration is the level of importance material handling equipment has in regards to company business flow. For many customers, this can relate to proper fleet size, seasonality of business, and average service time to get down equipment back up and running.  This solution is not for everyone, but it is a solution that delivers for many companies.