Supply & Delivery of Printing Disposables.
"Find out why our Sales are falling and help us to turn it around."
The customer was a manufacturer of Printer Ribbons and Laser Toner cartridges which were sold to wholesalers for further sales to the end consumer.
The perceived business problem was a fall in sales. When he approached Touchstone Renard's consultant, the Managing Director was also aware that the company's internal processes had not been reviewed for several years and that the company's computer software and hardware were so old that they were unsupportable.
Several wholesalers were contacted to understand the falling sales patterns. It was found that the organisation's product was significantly overpriced compared to the competition and that customers where now operating a Just-in-Time (JIT) stocking policy. Furthermore, they wished to be able to place on order up to 5pm and expect delivery in time to have the items on the shelf by 9am next day.
It was agreed with the board of management that the company's supply chain needed a complete review. It was also agreed that as the most likely outcome was a completely new set of process and supporting software that all the other company processes be reviewed.
Meetings were held with various people in all departments within the organisation. Key parameters for the company to be successful were identified and discussed with senior management. Several problems preventing the achievement of success were identified. The most important were recognised to be:
- Marketing was unable to produce decent product forecasts due to minimal historic information.
- Due to lack of forecasts production scheduling were producing finished stocks of the wrong products.
- As the company did not itself use JIT it could neither understand or respond to customers applying such processes.
- The significant problem in the overpricing of product was raw material stock levels. This was partly caused by the main raw material suppliers being in the Far East.
- No orders could be accepted after 3pm due to the order packing and despatch process.
- The accountancy systems, whilst adequate for book keeping, were too slow to support management accounting and decision-making.
As a result of the above diagnosis it was agreed to complete a series of workshops analysing all process in the business and, if appropriate, the structure of the organisation.
Workshops were held covering all major processes in the business and involving all levels within the organisation. Each of these processes was initially documented as a flow chart. Information was collected for each process which included:
- The number of transactions per activity.
- The number of resources needed per activity.
- The time to perform activities.
- All perceived problems per process.
- The boundaries between processes (including customer and supplier processes) and whether there was a problem at the boundary.
- The estimated cost for the major activities using activity based costing.
As a result of the above detailed analysis a vision was developed of the desired future state of the organisation in terms of measures that it wanted to achieve and ways that it wanted to operate. From this the following improvements were designed and agreed:
- A new improved forecasting system which marketing could access remotely.
- A re-organisation of the sales teams to provide the customers with a more focused service.
- A change in the scheduling system to a JIT based approach.
- A better understanding of machine set-up problems in the scheduling system.
- A re-organisation of the order picking process so that orders could be accepted up to 6pm.
- A re-evaluation of the supply situation to reduce lead times.
- An overhaul of the accountancy systems to provide timely management data to measure and control the new processes.
Finally a completely new computer system was selected that could support the new systems.
When the above improvements were being designed each new process was given:
- An agreed purpose - hence eliminating meaningless activity.
- An owner at board level responsible for the process performance.
- Agreed performance measures to be achieved.
- A description covering the above which all employees could understand.
The chosen computer system had to be able to record and report on the above measures in a timely manner within an agreed level of accuracy.
Ongoing monitoring was installed in the business with board members driving the process, and champions leading teams focused on each product. Sales were regained and the company has continued to adapt successfully to newly evolved market conditions.