What are Best Business Practices? When we talk about Best Business Practices what we are doing is comparing your real world resources of people, processes and tools, to an ideal world where you have unlimited resources. A successful implementation of Best Business Practices involves finding the most beneficial balance between the ideal, your resources, and the unique qualities of your company. This balance point will become the Best Business Practices for your company. How much will Best Business Practices Save? This varies quite a bit from company to company. Our Thinking Inside the Box this week reviews some of the Best Practice Savings we've discussed in the past and how much they can individually save a company. Take a look and add up the ones that might fit into your business. Overall the average food distributor stands to save from 20-25% of the total operating costs by working towards Best Business Practices. Intense Best Business Practice plans like Six Sigma, TPS, and Lean Manufacturing can quote higher figures of 35-45% according to Thomas Pyzdek of The Six Sigma Handbook. Why Doesn't Everyone Use All Best Practices? In all of us we have a practical (logical) mind and a reactionary (emotional) mind. The logical mind provides us our options, but the emotions are what really drives our behavior Here are some of the practical (Logical) reason companies give for not using Best Business Practices: No Budget, No Time, Lack of Knowledge, Wrong Personel, Missing Technology, Lack of Training... Here is the real (Emotional) reason: It is uncomfortable to change.
In order to implement Best Business Practices you need to admit that you may be wrong, you need to evaluate what you are doing honestly, and you need to be willing to risk change. It is said that change comes when people are uncomfortable. You can wait until your business performance makes you so uncomfortable that you are forced to change, or you can work outside your comfort zone to grow your business and make it more profitable. | Thinking inside the box:
 Best Practices Review Reducing Shrink - Recover nearly 1% of your total revenues currently lost to shrink as profit. Efficient Pallet Use - Save up to 80% of pallet costs and tons of waste each year. Accurate Inventory Counts - Find between 4% to 7% of inventory value that average companies "lose." Prevent Shipping Chargebacks - On average 2% to 10% of revenue generated from a customer is lost to chargebacks, learn to keep the money you earn. Automate Order Entry - Increase the profitability of each sale by 4% Clear out Dead Inventory - Recover a portion of the 110% cost of holding each piece of dead inventory. Accurate Order Fulfillment - Turn 5% to 7% of total sales from cost to profit. |
