Inventory Turnover Breakthrough (Part 5) – From Worst to First!

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We launched the Global Inventory Turnover Breakthrough project on April 1st.  It was not a joke.  Our challenge was to improve Inventory turnover from 6.3 turns to over 8.6 turns within the year.  This was a level of achievement that the company had never before reached.

But we had the Call to Action.  Our Inventory turnover was perennially the worst in our industry.  Our Inventory levels were consuming an enormous amount of cash as well as creating a lot of expense in carrying charges.  And this had the effect of driving our Return on Invested Capital to very low, unattractive levels.  Further there were ongoing complaints that even though we had a lot of inventory we  never had all of the right material that was needed.

We had the motivation to turn this situation around.  What we didn’t know is that we were about to make history and go from Worst to First!

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World Class Inventory Turnover Breakthrough (Infographic)

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Improving Inventory turnover performance is both a requirement and a challenge for many companies.  We’ve written several blogs on this subject to share our experiences in achieving truly game changing results in inventory management.

Attacking just a single element of inventory has, in our experience and observation, proven to be an insufficient approach to making significant, sustainable changes.  The entire ecosystem of processes, variables, and stakeholders requires taking a holistic approach enlisting a variety of tools and techniques to drive game changing inventory performance.

In this blog we’ve captured much of this content in a single Infographic

 

Inventory Infographic

 

Check out   Inventory Turnover Breakthrough (Part 5) – From Worst to First!

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Inventory Turnover Breakthrough (Part 3) – Double Turnover In 9 months!

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“We are a Supply Chain Services Company,” I was told.

“If we are truly a Supply Chain Services Company, then why is our Inventory Turnover only at 7?”,  I asked.

I had just joined the company and in studying their financial performance it stood out to me that if we were truly a Supply Chain Services company then having only 7 Inventory turns was extremely uninspiring.

We needed to be dramatically better at managing Inventory to convince ourselves, and our customers, that we were a trusted and leading Supply Chain Services partner.

Continue reading “Inventory Turnover Breakthrough (Part 3) – Double Turnover In 9 months!”

Inventory Turnover Breakthrough (Part 4) – Creating the Culture to Break Barriers!

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In my experience when you embark on driving any kind of Game Changing Transformation you will most likely also need to change behaviours if not the Culture.  As the saying goes, “the definition of insanity is doing the same thing and expecting different results”.  So in order to get different results you may have to break through barriers and drive different behaviours from what are inherent in the current Culture.

Your organization is an ecosystem of policies, practices, processes and procedures that are the result of decisions, beliefs and  behaviours.  Over time much of this generally gets accepted as the way it’s always been done and is not open to challenge or to change.  Therein sacred cows, whether real or perceived, can become obstacles to making the changes needed to derive different results from the status quo.

Having your Call to Action in Place, A Project Name and mandate, and a Holistic Approach are critical.  But the “X” factor that you also need to have a strategy for is Cultural Change.

Continue reading “Inventory Turnover Breakthrough (Part 4) – Creating the Culture to Break Barriers!”

Change Leadership (Part 3) – Executive Sponsorship … A High Powered Enabler For Changing The Game

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Anyone who is trying to make changes will be met with a variety of reactions and responses.  This will happen regardless of how important the change is to your Job, your Department, your Function or your Company.

Certainly there will be people who will happily, and openly, be willing to support you and help in any way they can.  While this is critical, it is more important to understand that there are those who will aggressively oppose you.  They may put obstacles in your way or they will be passive aggressive in their lack of support.

There may be many good reasons that you will be faced with this kind of opposition.  However it is incumbent upon you, as the leader, to take all necessary steps to address these issues head on.  One technique that can help you and your Company is to solicit and acquire visible and active Executive Sponsorship!

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Change Leadership (Part 8) – What gets measured is what gets done!

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There are a myriad of variables and factors which affect your ability to achieve your objectives.   Deciphering this complexity to determine what is important to measure is critical for driving improvements and change.

As with many aspects of your business there can literally be dozens and dozens of different metrics.  The same is true in sports.  So if you are trying to drive breakthrough results in your company or win on the field how do you determine what is important to measure?

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Inventory Turnover Breakthrough (Part 2) – Define and Manage The Levers!

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Taking a holistic approach in order to achieve Inventory Turnover Breakthrough results meant that I needed to consider the End To End Supply Chain.  As I thought through this approach there was really no other way if we were to achieve significant improvements to help the entire business in a short period of time.

In thinking about the End To End Supply Chain it was necessary to define all of the aspects that impact Inventory levels.   In short I needed to be able to manage:

  • All of the levers that control the rate at which Inventory is brought in to the company
  • All of the levers that control the rate at which Inventory moves through the company
  • And all of the levers that control the rate at which Inventory moves out of the company

Continue reading “Inventory Turnover Breakthrough (Part 2) – Define and Manage The Levers!”