(102) Management Involvement, Balanced Objectives, Execution

Excellence and Smart MeasurementManagement, Objectives, Execution, Measurement

Grant Howard, Grant W. Howard CompanyManchester, Michigan

Top to Bottom and End to End

The ConnectionManagement, Objectives,

Execution, MeasurementDriving SuccessTake it Back

Grant Howard and GWHCO “Driving Results” - Profits, Longevity, Growth and Responsibility to the Next Level Authority on “Best Practices” Inventory Management, Operational Excellence, Systems Utilization and

Strategic Success Wholesale Distribution Degree Many Years of Experience Works with Multiple Distributors, Associations and Software Systems, 80% of Time at Distributors On-site Inventory Management, Operations and Systems Workshops/Conferences Multiple Boards of Directors/Advisory Boards Conceptual Designer Behind Infor’s Sx.e, FACTS and A+ “AIM” and other ERP Platforms Software Development, Enhancements and Spec/Design Work Our Expertise is “Best Practices” - Improving and Implementing Proven Practices that Work and Get

Results - Profits, Longevity and Growth PLGR, MOT, PEM, PET, ACE ghoward@gwhco.org

Customer Service Availability On-Time Delivery Accuracy

Product Quantity Price Other

Issue Resolution Fair Price

Profitability Revenue Generation

and Optimization Strategic Sourcing Margin Improvement Costs Reduction:

Freight – In, Out, Inter Co. Cost of Transactions – 4x Cost of Assets – Inv&A/R Cost of Errors/Fires Admin and Other Costs

PROCURE

SALES

WHSE&VA

Company Objectives Profitability, Longevity and Growth

Company Objectives The Big Picture

Bottom Line Profits (P&L)GM and Oper. Efficiency

Asset Management

Customer Service & RetentionMaintain the Base

Profitability Longevity

Employee Happiness

Growth Cash Flow Asset Mgt

The Disconnection

ManagementVision

ExecutionExcellence

With Growth and Technology, the Gap or DISCONNECTION Increases between the Top and the Firing Line

Minimize this Gap

The Connection

ManagementVision

ExecutionExcellence

ObjectivesConnection

MeasurementConnection

End to EndProcure, Warehouse, Value-

Add and Sell at All Levels

The Connection, Bridge, Liaison

Top to BottomStrategic and Tactical

at All Levels

Management

Vision, Clarity, Direction

Connector:

Culture Creator

Policy Maker

Debate Breaker

Gate Keeper

Change Manager

Tactical:

Understanding

Buy-In

Support

Communication

Result Driver

Strategic:

Vision

Clarity

Direction

Team Leader

Management – Management by Leadership

Management Involvement and Engagement

Vision to ResultsTop to Bottom and End to End

Management – VisionGood business leaders create a vision,

articulate the vision, passionately own the vision and relentlessly drive it to completion.”

Jack Welch (GE)

Vision, Clarity, Direction

Objectives

Profitability, Longevity and Growth

Balanced Objectives

Growth:

Existing Customer

New Customer

Existing Offerings

New Offerings

Sustainable

Longevity:

Customer Experience

Vendor Relationship

Employee Happiness

Responsibility

Owner Return

Profitability:

Revenue

COGS

Freight (x3)

Transactional Costs (x4)

Asset Costs (x3)

Balanced Objectives – Profitability, Longevity and Growth

Strategic and TacticalManagement by Objective

Objectives – Management by Objective

Driving Results:ProfitabilityLongevityGrowth

Breath and Depth:Strategic to

TacticalTop to BottomEnd to End

Desired Results:Balanced/TeamObtainableMeasured

Top to Bottom and End to EndMethod to Obtainment

Objectives – Balanced“In absence of clearly defined

objectives, we become strangely loyal to performing daily acts of trivia.”

Author Unknown

Profitability, Longevity, Growth - Balanced

Execution

Accuracy, Consistency, Efficiency

Back to Basics – PETMany Distributors Do NOT: Set the system up properly Feed the system good dataUnderstand or use the system properlyHave defined processes, procedures and policiesUpdate poor processes, procedures and policies Educate their people on the system or processesHelp departments work togetherHelp work towards common goalsYet they think it will all just magically work

Standardizationand

Consistency

Operational Excellence – TQMOn-Hand Adjust Error 41 Wh/OpsOrder Correction Pick Error 26 Wh/OpsOn-Hand Adjust Pick Error 23 Wh/OpsOrder Correction Entry Error 16 SalesOrder Correction Price Error 12 Sales AB Stock Out Incorrect Usage 9 Procure Price Override Too High 7 SalesMissed Discount A/P Disc 5 Office

$150, $200, $250

Stabilizationand

Accuracy

Logistics, Transactions and Assets – LEANTrans/Year Cost/Trans Total Cost

70’s 2 25.00 50.0080’s 4 10.00 40.0090’s 6 5.00 30.0000’s 12 3.00 36.0010’s 24 2.00 48.00Xxx 48 1.50 72.00Xxx 48 0.13 6.24We have used Technology to increase the number of transactions we can do…

We have not done as well at using technology to reduce the cost per transaction

Optimizationand

Efficiency

Operational Excellence – Stellar Service at the Lowest Cost to Serve

Standardization StabilizationOptimization

P E T T Q M L E A N

Consistency Accuracy Efficiency

Accuracy, Consistency, Efficiency – A C E

Procure, Warehouse, Value-Add, SellBAPTMAMTP – Give them the Tools

PET – Process, Education, TechnologyLEAN – Freight, Transaction Count, Cost per Transaction, AssetsTQM (Total Quality Management) – Quality/Error Reduction

UnderstandingUtilization

Optimization

LEAN Management:

Logistics (3x)

Touches & Cost/Touch

Assets

Efficiency

Process, Education, Tools

SOPP’s

Education (3x)

Tools and Technology

Consistency

Total Quality Management:

1 to 7, 60% to 70%

Error Tracking

Root Cause Analysis

Accuracy

Execution Excellence – Accuracy, Consistency and Efficiency

Build a Process to Manage and Manage the ProcessManagement by Transaction and Exception

Execution Excellence

Operational Excellence – P E T

Processes: Policy ProceduresClosed-Loop

Education:98% vs 60% Education:On-boardingContinuous Trigger

Measure:UnderstandingUtilizationCompliance

Technology: Technology

Increases the Process Speed –Good or Bad

The “On” Button –That’s Easy Enough

Understanding and Utilization (IT vs IS) – Making it a Tool

Build a Process to ManageAnd Manage the Process

BAPTMAMTPSet Up for Success

Execution – Excellence

“Vision without Execution is Hallucination.” Thomas A. Edison

Accuracy, Consistency, Efficiency

Measurement

Performance, Improvement, Opportunities

Utilization:

Performance

Improvement

Opportunities

Compliance

Benchmarking

Driving Success:

No Measurement

Measure to Measure

PMO Measurement

Give Method to Change

and Drive Results

Methodology:

Reports

Consolidated Excel

Analytics and BI (ABI)

Management by

Measurement

Measurement – Performance, Improvement, Opportunities

Smart Measurement

Drives Performance, Drives ResultsManagement by Measurement

Exceptions and Improvement

Long Term Surplus

TQM Summary and Detail Credits

Margin Exception and Price Optimization

Customer Experience

Inventory Turns

Measurement – The Map

Measurement – Map and Compass

This is the Monthly Meeting

Measurement – GPS (GFT)

Additional Information:Freight Spend (In, Inter, Out) and %’sYear End Objective and %ObjectivePrevious Year Actual and % TY vs. LYIndustry Best and Industry Average

The Critical Missing Connection - Measurement

No Measurement – Lost Measure to Measure – Lost and Confused PMO Measurement – Lost, Confused and Angry (No

Detail and/or Management Support)

Many Metrics, KPI’s and Ratios to Measure… Many Tools, Methods and Techniques to Measure… Key is to Measure to Drive Performance, Measure to Drive

Improvement, Measure to Drive Results Management by Objective, Management by Measurement –

Dashboard, Summary, Drill Down, 100,000 Feet to Ground Level. Objective Oriented

Measurement – Driving ResultsCustomer Experience: Fill Rate On-Time Delivery Accuracy

Issue Resolution and Effectiveness

Pricing Optimization and Effectiveness

Profitability: Inbound Freight Inter Company Freight Outbound Freight

Transactional Count Transactional Cost Transactional Errors

Inventory Turns/T&E Inventory Surplus A/R DSO A/R Over XX Days

Relationships: Employee Report

Card/Grid Understanding Utilization Compliance

Customer Report Card/Cost to Serve

Vendor Report Card/Cost to Own

Measurement – Results“If there is no measurement, then it is all

hearsay. Data-free conversations and decisions will cause lots of frustrations, cost lots of

money and result in lots of disappointments.” Grant W. Howard

Performance, Improvement, Opportunities

Driving Success

BAPTMAMTP1. Management – Understanding, Buy-In, Support2. Objectives – Strategic Objectives around PLG and Tactical Action To-Do List3. Execution – Put PET in place, then TQM and then LEAN4. Measurement – Establish Metrics and Tools for Measurement.

5. Establish a Meeting Schedule6. Establish Expectations

Three Phases: Understanding, Utilization and Optimization Usually starts with BPIM and moves into OE Proficiency, Warehouse, Operational

Excellence, Technology Utilization, Education and Measurement

Management Objectives Execution

Measurement

Engaged Management

Vision Clarity

Direction

Balanced ObjectivesProfitability Longevity Growth

Execution Excellence

Accuracy Consistency Efficiency

Smart Measurement

Performance Improvement Opportunities

Stellar Customer Experience and Profitability

Customer Experience

Fill RateOn-Time DeliveryAccuracy

Perfect Order

Issue Resolution Fair Price

Profitability

RevenueCOGSGross Logistics Transactional Assets

Net ProfitObtainable, Balanced and Measured Objectives

Set the Objectives, Measure and Execution will Follow

Reconnect the Disconnection – Vision to Execution to Results

Top to Bottom: Reconnect – Strategic, Middle and Tactical

End to End: Reconnect – Procure, Warehouse, Value-Add and Sell

Top to Bottom and End to End: Management Sales and Marketing Human Resources Procure Warehouse Sell Technology

Reconnect Objectives to Vision Reconnect Execution to Objectives Reconnect Measurement to Execution

Objectives and Measurement: The Bridge, The Connection, The Link The Liaison between Vision, Execution and

Results

A+ Network Meeting – Discuss AIM on A+, Sunday 10:30am – 11:30am

SX.e AIM Network Meeting – Ask the Expert Panel Discussion, Sunday 1:30pm

FACTS Network Meeting – Inventory Replenishment Q&A, Sunday 3:00pm

(331) SX.e WebUI Advanced Inventory Management – 10 StepsMonday, 1:30pm – 2:15pm

(161) ProAdvisor - BI that is Goal-Oriented and Results-FocusedTuesday 8:00am – 8:45am

(102) Balanced Objectives, Execution Excellence and Smart MeasurementTuesday, 1:30pm – 2:15pm

(162) ProAdvisor – A Closer LookTuesday, 2:45pm – 3:30pm

3 Days Best Practices Inventory Management, Novi Michigan May 12th–14th, 2020

Thank You