OPERATIONAL GUIDELINES - SECTION FIVE

 

1.         Mesure and achieve ever better service excellence by posting and obsessively improving on the “Big 8 Elements”. This will guide most people to do all things right.

 

2.         Don’t hire more people until you have considered freeing slack by:

 

a.               Tightening up on low-end customers.

 

b.               Hiving off accounts from salesmen to telemarketing or direct mail.

 

3.         Operational discipline and correctness as a habit comes from:

 

a.               Look sharp, be sharp.

 

b.               95% cycle count accuracy.

 

c.               On-time arrival.

 

d.               Day’s work in a day’s time.

 

e.               Posting and improving numbers for every job.

 

f.                If people must think about DIRTFT, they won’t.

 

4.         Document and solve with teamwork all inter-departmental and customer and supplier caused hassles. Grow and evolve procedures/training manuals.

 

5.         Always re-think, re-work, and improve on our core of “productivity plays”, especially in “post top quartile” stage.

 

6.         Measure and address any customers who are unprofitable on a “total economic value” basis.

 

a.               Identify target accounts for:

 

01.   Small orders.

 

02.   Slow pay.

 

03.   High returns; credits.

 

04.   Unphoned or excessive will calls.

 

05.   Special stock not moving.

 

b.               Spend your limited man-power and working capital on higher return customers.

 

7.         For inventory:

 

a.               Determine and move towards critical mass investment and 90% (+) fill-rates to maximize: GP$/sales call; GP$/Trx.; and customer buying economics.

 

b.               Measure, feature and sell cash-traps weekly and religiously.

 

c.               Measure top few suppliers on nine elements of service quality, personnel and a grid of extras to create an agenda for buying better, not necessarily lower.

 

8.         On pricing of products:

 

a.               Be competitive, but economically superior through service.

 

b.               Avoid cross-subsidization; probably raise margins on service items.

 

9.         For receivables:

 

a.               Have a formalized and disciplined collection schedule.

 

b.               Provide negative incentives to salesmen for slow pay and write-offs.

 

c.               Make prompt pay a condition for some extra services to customers.

 

d.               Make it the last economic concession to give.

 

10.      Systematically stretch payables to their practical limits unless discounts are worth taking.

 

11.      Flowchart all paperwork and the system for generating financial reports. Remove bottlenecks, improve timeliness, accuracy and consistency and all other elements will optimize.

OPERATIONAL GUIDELINES - SECTION FIVE