1. Profitability, Longevity and Growth
The Next Level
Grant W. Howard
13214 Wallace Road
Manchester, MI 48158
(734)

2. Our Discussion Today The Big Picture The Replenishment Process
Getting Results:
Customer Service:
Path to Success
Getting Results
Profitability:
The Power of Your System
Summary - Some Final Thoughts
Through Slide 33 - “Lite” System and Summary
“Discussion”
Today is different from the last two days… Day 1 - How it Works, Day 2 - How to Use it
Today - Less whiteboard and system, and more how to make it all come together to GET RESULTS!

3. Owner’s Returns and Happiness
Longevity
Profitability
Growth
Warehouse
Sell
Procure
Owner’s Returns and Happiness
Customer Service
Vendor Performance
Employee Happiness
The Fundamental Tree
Service, GM Improvement, Asset Manage- ment, Efficiency, Accuracy
Education and Understanding
Communication, Structure, and Team
Systems and Tools
Processes and Procedures

4. Profitability, Longevity and Growth
GM Improvement ($&%):
Sales Increase - Loyalty:
Sell Price x 2
Lost Business and Backorders
More of Customer’s Business
New Business
COGS Decrease/Supplier Negotiations
Expense Reduction:
Asset Management:
Freight Reduction
Cost to Carry Reduction
Rifle Approach
Surplus, Safety Stock, RC/OC/OQ
Replace Freight & Inventory with ...
Efficiency and Accuracy:
Cost to Replenish Reduction
Replace Costs with ...
Longevity:
Customer Loyalty:
Customer Service:
Fill Rates
Backorder Handling
On-Time Delivery
Accuracy - Product, Price, Quantity, Terms
Ability to Solve Customer Issues
Use Technology to ...
Dynamic - its Critical:
Adaptability to Market Changes
Growth:
Existing Customers:
Lost Sales and Backorders
Depth of Customer’s Business
New Customers

5. Profitability, Longevity and Growth
Procure:
Inventory Management/Control
Operations
Sales
Marketing
Systems and Technology
Warehouse:
Operations
Inventory Management/Control
Systems and Technology
Sales
Marketing
Sell:
Seems to be a Pattern?
Where does Management fit into all of this?

6. Profitability, Longevity and Growth
Customers:
Availability
Backorder Handling
On-Time Delivery
Accuracy
Product
Quantity
Price
Terms
Win-Win
MEASURE
Vendors:
Win-Win
Not Just Price
MEASURE
Employees:
Want to do a Good Job
Balanced Objectives/Team
Tools, Processes, EDUCATE!
Remove Stress, Give Method

7. Profitability, Longevity and Growth
Communication, Structure and Team: Companies need to have a team concept, KNOWN balanced objectives, with a way to get there - Management!
Systems and Tools: Companies need to understand and use more than 20, 30, 50% of their systems!
Processes and Procedures: Companies need to have closed-loop, actual working processes and procedures!
Education and Understanding: Companies need to education their people and help them be part of the solution!

8. Inventory Management Getting Results
When, What, How Much

9. The Replenishment Model
A Good Replenishment Model addresses the two objectives of
Customer Service and Profitability
When to Replenish?
What to Replenish and How much?
What is incoming and will be late?
What is incoming and will be early or is not needed?
What is not needed?

10. What to replenish and How Much?
The Basics - Make Sure
PNA/Level
Surplus Point
Line Point or Max/EOQ
Order Point or Min
EOQ
Order Cycle
Lead Time
Safety
What is not needed?
What to replenish and How Much?
When to Replenish?
When, What, How Much?
What is not Needed?

11. Cost to Carry versus Freight, Price and Service
“When and What”
“When to Replenish”
Target/Incentive and RC - Profits
BOP with Target/Incentive and RC considerations - Profits and Service
“What to Replenishment”
Line Buy (Make Target)
Fill In/Emergency Buy
Transfers
Do Nothing
Cost to Carry versus Freight, Price and Service

12. “What and How Much” Line Buy/Transfer Fill-in Buy/Transfer
Items Below LP
Order Quantity:
1. Up to LP
2. Compare to SOQ
3. Minimum Run
4. Vendor/Transfer Package
Fill-in Buy/Transfer
Items Below OP/“Cycle*”
Order Quantity:
1. Up to OP/”Cycle*”
2. Compare to SOQ?
3. Vendor/Transfer Package
* It is important to replenish items not only below OP, but also the items below the “Cycle”. These items should be replenished at least back up to the “Cycle”. Cycle is the days left in the cycle (OC - (Today - LLB))

13. Measurement
Fill Rate, BO’s
Turns, Excess, Mix
T&E, GMROI
Data to Info
The Tools
Data
Usage - OE/WT
Lead Time - OE/WT
Level/PNA Info - OH & Paperfloat
Purch Hist
Replenishment
Buyer’s Ctrl Center
Items BOP/Priority
The Numbers
Hits/Ranking
Order Cycle
Ave Usage, Safety, OP, LP, Order Quantity
Timeline Analysis
Too Late
Too Early
Set-up
“Smart” Set-up
Co. and Whse.
Product Pline
Product Master
Product Whse.
Surplus Inventory
External/Lng. Term
Internal/St. Term
Maintenance
One Stop Inq/Maint
Proofs/Mass Update
Exc Control Center

14. Measurement
ICRIF - Fill Rate
ICRIT - Turns
ICRIR - T&E
Data to Info
The Tools
Data
Usage - OE/WT
Lead Time - OE/WT
Level/PNA Info - OH & Paperfloat
Purch Hist
Replenishment
POERR/WTERR
POERA/WTERA - BCC
The Numbers
ICAI - Rank
ICAR - RC
ICAMM - AMU, Safety, OP, LP, OQ
Timeline Analysis
ICRIG - Too Late
ICRIG - Too Early
Set-up
ICSR - “Smart”
ICSD - Whse
ICSL - Pline
ICSP - Prd Master
ICSW - Prd Whse
Surplus Inventory
ICRIS - Ext/LT
ICRIS - Int/ST
Maintenance
POERA - One Stop
Proofs/Mass Update
ICAMU - ECC

15. Getting Results!

16. Service - Fill Rates?
How well a business meets its customer’s needs - pulse of customer’s happiness/loyalty.
What to measure:
Fill Rates = Shipped/Ordered
Quantity: 9 out of 10 = 90%
Line Item SC: 9 out of 10 = 0%
Order Ship Complete?
What should Fill Rates be?
The report is broken?

17. Profits - Turns? ROI? Freight, Cost to Carry and Cost to Purchase
Maximize the Bottom Line
C to P Turns
80’s $
90’s $
00’s $
EDI/VMI $0.13?
Many companies are increasing the turns, but the infrastructure does not support it; bottom line, longevity and growth are all suffering! Customer Service, GM Improvement, Efficiency, Accuracy, Asset Management
Profitability
Turns

18. Know the Right Things to Do
Do these Things Right
Inventory Management is at the Time of Replenishment, the “When, What, and How Much”. Everything else is Reacting.

19. Service and Profit - Balance
Hits H H L L
Cost L H L H

20. Inventory Management Objectives
Customer Service
Availability (Fill Rates)
Proper Backorder Handling
On Time Delivery
Accuracy: Item, Quantity, Price
Profitability (ROI)
GM Improvement (Sales and Cost)
Freight Considerations - OC Analysis
Efficiency & Asset Mgt: CtoC and CtoP
Surplus Inventory & Safety Inventory
Turns/Days supply, ROI/T&E/GMROI
Watch the C to C
(Warehousing, Handling, Obsol. & Shrink, Taxes, Ins, Interest)
Watch the C to P
(Purchasing/Replenishment, Receiving & Put-away, A/P)

21. The Path to Success - Service
1. Accurate Order Point:
Usage:
Data Collection, Lost Business, Inputs
Method and Window
Seasonal Trending, Advance by Lead Time, and Shift
Roll Up
Correct Paths
Usage Forecast Accuracy Analysis
Lead Time
Safety:
Safety by Rank/Hits/Velocity
Safety Method by Lead Time
Safety Analysis
Customer Buying Habits
Data, Parameters, Forecasting
2. Accurate Level:
On-hand Integrity
Paperfloat Control
BIIS
3. Replenish at Order Point:
BOP and Prio
POERA
4. Monitor Changes/Timeline:
Timeline “Gap”/”Too Late”
ICRIG

22. The Path to Success - Service
5. Closed-loop Backorder Process - Service
6. Keep it Working - Maintenance:
Get out of the “Yellow Sticky World”
Watch for Suppressed with Activity
POERA, WTERA, ICAMU
7. Measure and Monitor:
Drill in, Rifle Approach - Don’t Shotgun Approach it, just $$$ and disappointing results.
ICAMU, ICRIF
8. Receiving, Put-away and Backorder Handling - Service
9. Picking, Shipping and On-Time Delivery - Service
10. Billing - Product, Quantity, Price, Terms - Service

23. Customer Service Availability, Backorders, OTD, Accuracy
1. Right Inventory not Suffering because of Wrong
2. Controlled Replenishment
3. Stocking Policy
4. Good Numbers and Proper Use of Them (OP, Level, LP, and OQ) - Path to Service:
Replenish at Order Point - Prio
Usage: Lost Sales, DP
Freight/C to C vs Service
Line Buy vs Emergency Buy
Understand LP and OQ Effect
Back to Basics
5. Operations:
Backorder Policy and Handling
On-Time Delivery
Accuracy of Shipments and Billing
6. Fill Rates - Monitor, Drill Down, Find Areas of Improvement

24. Customer Service Availability, Backorders, OTD, Accuracy
Keys to Good Fill Rates
7. Understand and Use:
Customer Buying Habits
Timeline Analysis
NOOS Policy and Procedure
Smart Selling/Transferring
8. Follow LP and EOQ Suggestions:
Too many Fires
BOP but not at Target Problems
9. “Never-Arrive” Incoming
10. Safety Stock Increase:
Safety Analysis (Over Utilizing)
Safety Increase:
Use a Rifle Approach
Watch the Profits
Stellar Customer Service does have to drive your inventory through the roof, it just has to be done smart.

25. Customer Service Availability, Backorders, OTD, Accuracy
Customer Service Improvement:
Availability
Backorder Handling
On-Time Delivery
Accuracy - Product, Quantity, Price, Terms
GM Improvement, Service, Efficiency, Accuracy, Asset Management

26. Inventory Management Objectives
Customer Service
Availability (Fill Rates)
Proper Backorder Handling
On Time Delivery
Accuracy: Item, Quantity, Price
Profitability (ROI)
GM Improvement (Sales and Cost)
Freight Considerations - OC Analysis
Efficiency & Asset Mgt: CtoC and CtoP
Surplus Inventory & Safety Inventory
Turns/Days supply, ROI/T&E/GMROI
Watch the C to C
(Warehousing, Handling, Obsol. & Shrink, Taxes, Ins, Interest)
Watch the C to P
(Purchasing/Replenishment, Receiving & Put-away, A/P)

27. The Path to Success - Profits
1. Accurate Line Point and Order Qty:
Accurate Order Point
Usage:
Data Collection, Exceptional Business, Inputs
Method and Window
Seasonal Trending, Advance by Lead Time, and Shift
Roll Up
Correct Paths
Usage Forecast Accuracy Analysis
Accurate Review/Order/Transfer Cycle
Proper OQ Parameters and Controls
Proper Understanding and Use of LP and EOQ
Data, Parameters, Forecasting
2. Accurate Level:
On-hand Integrity
Paperfloat Control
BIIS
3. Replenish the Correct Qty:
Line Point, OQ, Pkg
Making Targets Properly
POERA
4. Monitor Changes/Timeline:
Timeline “Too Early”
ICRIG

28. The Path to Success - Profits
5. Surplus Identification and Disposition Process
6. Keep it Working - Maintenance:
Get out of the “Yellow Sticky World”
Watch for slow/inactive stock items
POERA, WTERA, ICAMU
7. Measure and Monitor:
Drill in, Rifle Approach - Don’t Shotgun Approach it, just $$$ and disappointing results.
ICAMU, ICRIT, ICRIR
8. Receiving, Put-away and Backorder Handling - Efficiency
9. Picking, Shipping and On-Time Delivery - Efficiency
10. Billing - Product, Quantity, Price, Terms - Efficiency

29. Profitability GM & Expenses (Freight, CtoC, CtoP)
Back to Basics
1. Stellar Customer Service
2. Controlled Replenishment
3. Stocking Policy
4. Good Numbers and Proper Use of Them (OP, LP, OQ, Level) - Path to Profitability:
Up to LP, OQ, Min, Package
Usage: Exceptional, DP
Targets/Incentives Properly
Line Buy vs Emergency Buy
Availability (Sales, GM, Fires)
5. Vendor Performance and Negotiations
6. T&E and/or GMROI - Monitor, Drill Down, Find Areas of Improvement

30. Profitability GM & Expenses (Freight, CtoC, CtoP)
Reduce Inventory/Increase Turns
7. Excess and Defective Control:
Prevention
Disposition
8. Order Quantity Reduction:
OC/RC (LP) Reduction:
OC/RC Analysis/Paths, Watch Freight
Lower Targets - Negotiate
C to P Departments Tools/ Efficiency
Suggested OQ Reduction (EOQ):
Watch C to P Departments
Proper C to C
9. Safety Stock Reduction:
Safety Analysis (Not Utilizing)
Safety Reduction:
Improve the Process
Use Rifle Approach
Watch the Service
10. Other Reductions:
“Never-Ship” Committed
Duplicate Products and Lines
Turns the Right Way!
Balanced Objectives - Increase turns/decrease inventory but DON’T EFFECT SERVICE!

31. Profitability GM & Expenses (Freight, CtoC, CtoP)
PNA/Level
Surplus Point
Line Point or Max/EOQ
Order Point or Min
EOQ
Order Cycle
Lead Time
Safety
Understand the Impact Areas:
Excess and Defective:
No one wants or needs
Control the Feelings
Let it Roll, Let it Go
Be Careful - C to C/Mix
Line Point and Order Quantity:
“What” and “How Much”
Be Careful - C to P Departments
Order Point - Safety Stock:
“When”
Be Careful - Customer Service

32. Vendor Performance and Negotiations - It’s not just Price
Lower COGS
Lower Freight Minimums
Multiple Drops for Freight
Combined P/O’s for Minimum
Freight Paid Fill-ins
Fill Rates
Consistent Lead Times and OTD
Accurate Shipping (Blanket Receiving) - Product, Quantity, Price
Good Backorder Handling
EDI/VMI/2-Way Information Flow - B2B
Automated Product and Pricing Updates
RGA’s on New Items
Excess Inventory Returns
Win/Win - Partnership

33. Profitability GM & Expenses (Freight, CtoC, CtoP)
Profitability Improvement:
GM Improvement
Expense Reduction:
Freight
Cost to Carry
Cost to Purchase
GM Improvement, Service, Efficiency, Accuracy, Asset Management

34. How Much of the System Are You Using?
Good System - Over 80% of Items Listed

35. “Best Practices” Inventory Management
Improve Customer Service, GM, Asset Management, Efficiency, and Accuracy
Better SKU Coverage - System and Buyers
% SKU Coverage to %
5-25,000 SKU/Buyer to 40, ,000+
Improved Time Management
Improved Priority Setting
Improved Efficiency
Improved Accuracy
Technology and Core
Replace Inventory with Information
Rifle Approach
Better Numbers and Better Tools
Ability to Balance Profits and Service

36. Table Driven/Automated
“Smart” Parameters
Product Record
Product Line Record
Vendor Record
Warehouse Record
Company Record
Table Driven/Automated
Depth
Watch Hardcoding
Balanced

37. Economic Order Quantity (EOQ)
Cost Per Unit Ordered
EOQ
Total Cost
Cost to Carry
(“K”eep Cost)
Cost to Purchase
(“R”eoder Cost )
Quantity Ordered
C to C
C to P
1. Not less than “x” weeks supply (1 week)
2. Not more than “x” weeks supply (1 year)
24 x Avg. Monthly Usage x Cost to Purchase (“R”eorder cost)
Unit Cost x Cost to Carry (“K”eep cost)
The EOQ formula minimizes the “Cost of Reordering or Purchasing” and the “Cost of Keeping or Carrying” which develops the lowest total hidden inventory costs - the lowest total inventory costs. The “How Much” decision affects your bottom line and service!

38. Paperfloat Control

39. Buyer’s Control Center/Workbench
On-line, Priorities, One-Stop, Drill Down, Maintenance, Targets

40. Making Targets Properly
Cost to Carry vs Freight, Price, and Service:
Key is equal days supply
Increase or Decrease
Use for Proper Emergency Buys/Fill-ins
General rules of thumb:
Days
Dollars
1/2 way through OC/RC

41. Discounts and Price Increases
Negative
This is total days supply to have on the shelve, not to buy. Use the “up to vendor target logic*” (change order cycle days) to meet the days supply.
*This method works well for periods less than 90 days supply (seasonal or large swing items - be careful).
Be aware of future freight, minimum considerations, fill ins, NS and OAN items. If targets are involved, be sure to fill in the entire line not just the fast movers or work a deal.
$C to C
$Discount/Increase
$C to C
$Discount/Increase
Positive
Break Even
Max. Potential
Quantity
Break Even (Days) =
(2 x Discount% / Monthly C to C) x 30
Maximum Potential Savings (Days) =
(Discount% / Monthly C to C) x 30

42. Time Line Analysis In Out Ideal Timeline Too Late Too Early
7-30 days
Ideal
Timeline
0 + days
Too Late
30 + days
Too Early
Identification and Prevention are the Key
Doesn’t matter if late if didn’t need
Doesn’t matter if on time if needed earlier

43. Surplus Inventory Prevention Identification Disposition Goals/Plan
CONTINUOUS
Prevention
Identification
Disposition
Goals/Plan
Responsibility
Coordination

44. “Smart” Monitoring Safety Stock - Service and Turns
Properly managed safety stock will result, over time, in this
configuration of remaining stock levels at time of receiving
the replenishment PO. Impossible task if done manually.
Enhancement automates the monitoring.
X = Actual stock available at time of receiving X X
Safety Stock Level
75% X X X
50% X X X X
25% X X
Stock out

45. “Best Practices” Better Numbers - Order Point
Usage Data and Calculation:
Lost Sales/Exceptional Sales Capability
“Smart” Exception and “Auto” Correction
“Path” Exception Reporting
Flexibility to Where Usage Placed for Shipments, Backorders, and Credits
DP/MRP Capability
Flexibility with Method and Window by Rank
Seasonal Capabilities:
Individual “Parameter Driven” Seasonal Trending
Lead Time Advance for Seasonal Items
Season Shift Capability
Dual Usage for Seasonal with Long Lead Times
Threshold Minimums
Rollup Capability
Usage Forecasting Accuracy Analysis and Correction
Safety Stock Improvements:
Safety Days or Percentage
Safety Control by Rank
Method Control by Lead time
Safety Stock Analysis
Lead Time Improvements:
Minimum and Maximum
History File with Maintenance
History/Parameters by Path (Int/Ext)
Exceptions w/ Automated Ignore
Manual Exceptional Lead Times
Customer Buying Habits, Threshold Minimums and “Automated” Overrides
Use of Hits and “Smart” Item Ranking
“Smart” Parameters and Controls

46. “Best Practices” Better Numbers - Line Point and OQ
Review/Order Cycle Improvements:
Based on Purchasing History or Extended AMU
Min, Max and Exception
Transfer Cycle Days
OC/RC Analysis
Order Quantity (EOQ) Improvements:
Co, Whse, Pline, Product level
Vendor vs Transfer (Path)
Min and Max Supply
Calculate but do not use (SP)
Use of Hits and “Smart” Item Ranking
“Smart” Parameters and Controls
Cost Per Unit Ordered
EOQ
Total Cost
“K”eep Cost
“R”eoder Cost
Quantity Ordered

47. “Best Practices” - Better Tools
Buyer’s Control Center - BCC
Priority
Targets
“Smart” Rounding
Drill Down/Maintenance
Proper combination of the three models and use of EOQ
“One-stop” Thinking
Time Line Analysis
“Too Late”
“Too Early”
“Smart” Surplus - “True” Surplus
Exception Control Center - ECC
“Smart” exception reporting
Mass Update
“One-stop” thinking
Safety Stock at Receipt Analysis
Measurement and Monitoring
Rounding Control and Smart WT
Three buying methods and WT’s:
LP with or without OQ
WT Cycle and Set weeks supply
Full control and Works together
Proper products, Proper quantities
Improved Stock Levels:
Orders, PO’s and WT’s Control
Future Sales Orders
Future P/O’s
Strong Suggested Count Program
WMS
Flexible Product Merge Utility
Stock Balancing Tools
Use of Hits and “Smart” Item Ranking
“Smart” Parameters and Controls

48. Some Final Thoughts

49. Same Company Different Software
It’s not just good Software and Systems
It’s not just good Processes and Procedures
It’s not just good People and Education
It’s not just good Management
IT’S ALL OF THEM!
It’s not just good Usage
It’s not just good Order Points
It’s not just replenishing at Order Point
It’s not just the Timeline
It’s not just working the Surplus
IT’S THE ENTIRE PROCESS
Same Company Different Software

50. Use measurement and monitoring reports to confirm results and to drill down and find areas of improvement.
Be sure to use a rifle approach rather than a shotgun approach, or it will be lots of $$$ and probably disappointing!

51. Replace Inventory with Information
Measure Results
Customer Service:
Fill Rates/Availability (ICRIF)
Accuracy - Product, Quantity, Price (CM%)
On-Time-Delivery
Backorder Handling (ICRIN)
Profits and ROI:
Surplus - Disposition (ICRIS) and Prevention
Safety Analysis (ICAMU)
Review/Order Cycle:
Freight Dollars - As percentage of sales
Turns - Really C to C and C to P (ICRIT)
Turn and Earn - ROI (ICRIR)
Replace Inventory with Information
Do better on both sides!

52. Replace Inventory and Costs and Improve Service with Technology.
Improve the Bottom Line with Technology
Information, Efficiency, Accuracy
(If it is not helping Service, if it is not helping Profits…)

53. Keys to “Getting Results” - Top 10
1. Hits/Ranking and “Smart” Parameters
2. Order Point, Line Point and Order Quantity Accuracy:
Usage:
Lost/Exceptional Utilization
Usage Exceptions and Maint
Proper Method and Window
Seasonal Trending & Adv LT
Roll Up
Usage Accuracy Analysis
Lead Time Exceptions and Maint
Safety Set-up and Safety Analysis
Order Point Adjusters
OC/RC Analysis
Proper EOQ Parameters
WT “Smart” Rounding
3. On-hand and Paperfloat Accuracy:
SC/CC Program and Address the Issues, Good Processes
Paperfloat Control
WMS, BC, RF

54. Keys to “Getting Results” - Top 10
4. Buyer’s Control Center:
Priority - Replenish at OP
On-Stop, On-line, Paperless
Making Targets Properly - Keep Equal Days Supply
5. Timeline Analysis:
“GAP”/“Too Late”
“Too Early”
6. Surplus/Excess/Defective:
“Smart” (Long and Short Term)
Visibility, Utilization and Disposition
Incoming with LT Surplus
7. Backorder Policy and Procedure - Closed-loop
8. Exception Control Center:
“Smart”/”True” Exceptions
On-Stop Corrections
Mass Update
9. Measurement and Monitoring:
Service (Fill, BO, OTD, Accuracy)
ROI
Mix
Excess
Freight
Vendor Performance
10. Controlled Replenishment and Stocking Policy

55. Spend your days reacting to the fires
Spend your days reacting to the fires... you may be efficient, but will you be effective?
Where are Your Systems, Procedures, and Objectives S(p)ending Your People?

56. Back to Basics Most distributors DON’T: Set the system up properly
Feed the system good data
Understand or Use the system properly
Clean up bad processes and procedures
Educate their people on the system or processes
Help departments work together
Help work towards common goals
Yet they think it will all just magically work

57. “Branch Participation” It’s Essential!
Sell
Service the Customer
Controlled Replenishment (PO’s and Transfers)
Good Data and Information (Rifle vs Shotgun)
Lost and Exceptional Sales
On-hand Integrity and Paperfloat Control
Proper Backorder Handling
Surplus Prevention & Disposition
Controlled Replenishment
Help utilize the Surplus
“Smart” Selling and Transferring
Eyes and Ears
Train the Masses
Teach Them Benefits
Give Them the Tools

58. The Big Picture Longevity Growth Profitability Customers Employees
Vendors
Service, GM Improvement, Asset Management, Efficiency, Accuracy
Replace Inventory and Costs and Improve Service with Technology

59. What and How Much to Replenish There is Always a Left and Right Side
REMEMBER!
What and How Much to Replenish
Line Point and OQ
Profitability
When to Replenish
Order Point
Service
There is Always a Left and Right Side
Balance

60. Things to Think About Service: Profits:
Fill Rates - Having the RIGHT Inventory:
Shotgun - $$$, Poor Results and not Balanced
Rifle - Smart $$$, Great Results and Balance
Replace Inventory with Information
Understanding “When” Controls Service - NO GAMES, REPLENISH at Order Point
The Importance of Order Point Adjusters
The Importance of Controlled Replenishment
Buying a 90 day supply and it lasts 60 days
Profits:
Turns Maximization is not Profits Maximization - The Right Way to Turns:
Excess/Defective: 5%
Safety Stock: 15-20%
Review/Order Cycle and Order Quantity Reduction - Caution (BCC, ECC, EDI/VMI, WMS, BC, RF, Blanket Receiving- Internal and External, EDI Invoice/Trans$, Automated Pricing, Maintenance and Updating)
Understanding “What and How Much” Controls Profits - NO GAMES - Order what the system recommends. Watch topping the truck, pre-buys, discounts/price increases
The Importance of “Equal Days Supply”
The Importance of Controlled Replenishment
Buying a 90 day supply and it lasts 120 days

61. The Things I Hear... We know it’s at OP, but...
LP and EOQ are just suggestions, they don’t really mean any thing...
It doesn’t matter how you get to the minimum, the important thing is getting the P/O placed and not paying freight...
It doesn’t matter if anything is BOP, we can place a P/O every day...
We keep upping the RC, but it hardly changes the P/O...
Items keep going BOP or GAP sooner than they should, stupid computer...
The quantities are always wrong on the RARRs, really stupid computer...
Stocking policy, backorder policy, what policy…
Increasing turns is easy, we just buy less or don’t buy at all…

62. The Things I Hear...
We understand service - everyone can buy and transfer inventory and they do...
We measure things, our turns are
We’re wondering how the computer invested so much in inventory and we got so little...
We don’t have time to prevent fires, we are running around all day putting them out...
Usage is correct by special magic; lost sales and exceptional sales logging are just a waste of time, talk to customers...
We have to have more people, look at all these THICK reports we look through. We even find something sometimes…
We review our lines at least monthly, many weekly...
We understand the process and maintenance; as long as we push the right buttons… (10 steps)

63. The World is Changing! Yesterday Today Tomorrow
Buyers/Inv. Control Inventory/Asset Managers ???
Turns Dominated Customer Service Oriented If you can’t
Inaccurate Data Data/Information Managers handle today,
Four Glass Walls Communications & Team how will you
Learned from “Bill” Education & Understanding handle
Pencil and Paper Technology and Efficiency tomorrow?
If your company is stuck in Yesterday or having troubles with Today, how will it survive Tomorrow?

64. GWHCO www.gwhco.org Grant Howard: John Cason:
Phone
Fax
John Cason:
Phone
Fax
Our approach involves tailoring the best practices in distribution to the specific needs of our clients. Our working philosophy revolves around building a strong and self- maintaining infrastructure by developing a working plan based on processes and procedures, education and understanding, implementation of tools and technology; and through communication, organizational structure and team environments.