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Home CC4F News Articles Issue 346 - It is not your customer's responsibility to make you profitable.

Issue 346 - It is not your customer's responsibility to make you profitable.

 It is not your customer's responsibility to make you profitable.

 We received a lot of positive feedback from our last "reprint". We are going back to another one that brought to bear more basics. This Issue 205 was published almost 2 years ago. It is your responsibility to make your Company profitable.

As the "Economic Downturn" starts looking more like a "New Economy" everyone needs to look at how to do profitable business.  This week we start looking at what your food distribution and processing business will need to do to not only survive but flourish in this new economic reality

Paul H-C

As I recently said to my staff, "If we all wait for something to happen in this economy, when it eventually happens most of us won't be here. Let's get out there and let them know we're here, and we're making deals. What's happening outside is the same for us as for everyone else so let them know we're going to work together to find a profitable way to do business."

Well over a year ago in Issue 149 we looked at ways to shape up as the recession started to hit home.  Much of the advice at that time was to refine your company to a lean and profitable machine, evaluating products, customers and vendors that were not profitable to maintain.  Now business owners need to start looking at how to bring the customers that were cut loose during the recession in as profitable customers.

When the economy is flush with money business owners are able to force these low profit deals through by insisting on minimum orders, or accepting low profit percentages and "making it up in volume."  When cash is scarce these deals become unattractive and many business are tempted to sit back and wait until the economy "recovers."  Business owners that fall into this trap are making a fatal mistake.

It is not your customer's responsibility to make you profitable.

If you are waiting for the economy or your customers to make you profitable,
 you will never gain an advantage over your competition.

So let's look at several topics you should be addressing to make the most of every deal.

  • Manage the labor force
    Labor is the largest controllable expense item in your DC. Successful practices to improve performance can lower your labor cost.
  • Hiring, retention and attrition (turnover)
    Labor is your first or second largest expense after outbound freight in the fulfillment center. Review the reasons attrition is so high and work to close the gap. Review your hiring, retention and training practices. How well are you able to staff for the peaks?
  • Slotting
    Effective slotting practices can lower your costs for picking, replenishment, and putaway warehouse labor.
  • Picking options
    How can you use best practices to improve picking productivity?
  • Performance reporting
    The old adage of, "You can't improve what you don't measure" is certainly true. An effective measurement and reporting process can improve performance and lower costs.
  • Freight management
    Controlling inbound and outbound freight can make the difference between a profit or loss for your business.
  • Receiving practices and cross docking
    Cross docking is an effective practice to reduce handling and costs while improving customer service and shipping costs.
  • Process returns more efficiently
    Returns cost more than orders to process. Untimely processing of customer credits, refunds and exchanges can damage customer service. Our assessments look at use of staff, people, space and systems to improve productivity. 
  • Finding the right level of automation and systems
    ROI analysis could put automation into your planning for cost improvement. The wrong material handling equipment can be creating hidden lost time and inefficient product flow, impacting cost and customer service.
  • Warehouse management/bar code systems
    This should include reviewing how bar coding throughout the warehouse, conveyance, material handling and warehouse management systems can improve productivity, increase service levels and reduce costs.
  • Inventory management in the warehouse
    Effective inventory management is the single most important tool to improve customer service and reduce cost of operation.
  • Replenishment practices
    Effective replenishment is the basis of successful order fulfillment. Inefficient replenishment will cost huge dollars and negatively impact customer service.

THINKING INSIDE THE BOX LOCATED BELOW

You may remember when we looked at how you can save 5% by focusing on
preventing errors in order entry and fulfillment.  After a special editorial next week we are going
to focus on how you can increase the profitability of small orders and work towards another Big Box
Last Year's Big Box!
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Video Highlights

VictualNet - THE Web-based alternative to installed-software for food distributors and processors to manage order entry and inventory.
VictualNet Features:
  Order Entry and Inventory Management
   For Food Distributors using QuickBooks

 

VictualNet Feature: Cost Based Pricing to Protect Profits

 

Costs in the food industry change quickly.  Food distributors and processors require a flexible pricing system that can keep up with the rise and fall of the market.  VictualNet cost based pricing options allow food distributors and processors to automatically update their pricing as their inventory costs change, while powerful contract pricing options protect price levels for preferred customers.

 

Watch the video to see how easy VictualNet makes keeping your prices current and accurate.