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