Poor coordination between Marketing, Sales, Finance, and Operations was adding significant days to cash operating cycle in the form of extra days of safety stock, accounts receivable, and accounts payable. Company faced forecast accuracy of 45% at end item, inadequate planning of promotions and new product transition, absence of complete forecast for Direct-to-Consumer and lack of a container direct program policy.

Convinced VP of Sales to co-chair Sales/Operations planning process with weekly team meetings and monthly management reviews, in order to ensure cooperation and collaboration between Sales, Marketing, Product Development, Finance, and International Sales personnel.

Sales/Operations planning cross-functional process, teamed with improved information from new MRP system, enabled 50% improvement in inventory turns, supported accelerated penetration of national retail accounts and faster sales growth, reduced obsolescence costs due to product transition by $200,000 annually, and improved on-time shipments to retail by 11% (from 87% to 98%). Improvements translated to reduced days in inventory from 135 to 105, and reduced days of sales outstanding.

Operations group was enthusiastic but in need of training, more formal job descriptions and division of work. Planning and distribution managers would be recruited from outside, and while enough experience existed to promote purchasing manager and master scheduler from within, significant coaching would be necessary. Continuous improvement goals were not being developed with Far East manufacturing group, factories, suppliers, or service providers. Core warehouse supervisory group needed to increase to support startup of larger production and distribution facility with throughput capacity five times that of original facility.

Sales growth annually 30% above plan left no time to train. Executive team members were rightfully impressed with some accomplishments, but did not see that several individuals could not provide necessary leadership as volume and velocity increased.

Recruited high-caliber distribution and planning managers. Developed job descriptions and redistributed work using APICS best practice process flows. In-house training and outside APICS training was given to buyers and master scheduler. Trained buyers as buyer/planners to balance volume price discounts with responsibility for inventory levels. Individuals were given authority commensurate with their responsibility and were encouraged thus. Converted strategic plans to Operational plans delegated to each organizational level. Tracked results through periodic Operations Reviews. Several individuals, despite coaching and training, could not adjust to new velocity and volume and left the company on friendly terms.

Continually developed staff and structure, and compared to strategic plan requirements. Gave quarterly improvement goals and performance reviews to factories, suppliers, and third-party service providers.

Led with direct staff by example, and modeled organizational values and expected behaviors so operations and company could continue to increase sales and control costs to block and minimize entry of competitors into marketplace. Factories, vendors, and third-party service providers became an extension of the company through effective relationship management.

Once national warehouse and retail accounts had been penetrated, there was enough demand history to produce high-volume end product configurations in the Far East and enough stability to reduce US finished goods inventory through Vendor Managed Inventories of components in Far East factories.

Negotiated kitting costs with Far East factories that were lower than US production costs, even with higher freight costs. Agreement was reached with Sales, Finance, and factories concerning produced items and implementation schedules. Worked with factories to source litho packaging and corrugated locally. Negotiated model inventory stock of components that factories should hold and manage, and tracked factory performance by auditing VMI balances and monitoring for reduced lead times.

Far East kitting of high-volume end items saved $500,000 annually. VMI reduced lead time by 30 days and reduced days in inventory by 22% (135 to 105 days).

Downward price pressure from competitors required stronger cost controls on purchased goods and services to reduce cost of goods sold and increase operating income. Purchasing was not following aggressive bidding process for printed material and corrugated orders. Many price agreements required payment on inbound freight but vendors were shipping partial truckloads on dedicated trucks. Fixed prices for production, packaging, and shipping were negotiated with third-party suppliers but Distribution was not checking invoices thoroughly enough to detect over-billing on special projects and supply purchases. Manufacturing Resources System in place did not provide cost management reporting.

Met with direct reports, Director of Planning & Purchasing and Senior Manager of Distribution. Agreed that Purchasing, Distribution, and Freight Management departments had to improve performance regarding cost controls. Met with each department and assigned responsibilities.

Save $730,000 through: 1) managing buyers to follow bid process for all printed material; 2) getting Marketing’s approval to change specs on some corrugated materials; and 3) supplier chargebacks for unfilled dedicated trucks.

Demand for company’s oxygen barrier vacuum seal bag was growing faster than plan assumed. Second supplier needed to startup production within 12 months, a normally 18-month venture because of supplier investment (minimum $3.5M) to build special-purpose equipment and dedicate clean manufacturing space. Otherwise, company would make further commitments to Korean factory and remain single-sourced. Korean product caused expensive freight and 3.5 month cycle time did not allow un-forecasted promotional opportunities.

Board of Directors did not believe company should partner and co-invest in new facility. New supplier would have to make the full investment. Retained consultant to locate potential suppliers with necessary equipment design and manufacturing capability. One small supplier was interested, and had built prototype equipment to demonstrate that a specialized process would be more cost-effective than general purpose tooling by the Korean supplier.

Quickly built trust and addressed cash-flow concerns supplier had regarding financing. Gained approval to modify payment terms to 40% upon order placement and balance upon shipment. Negotiated extended credit terms for first year. Worked out compromises regarding initial product specifications for tighter startup schedule. Supplier started ordering equipment components based on Letter of Intent, and detailed contract was completed within several weeks.

Supplier produced within 12 months and all end items in volume within 18 months. Three-week cycle time, as opposed to 3.5 months from Korea, allowed sales through opportunistic promotions above plan. Savings were $600,000 in positive PPV due to greater efficiency of specialized equipment and $400,000 in freight savings. Within a year, supplier agreed to VMI Program and large bag shipments were made directly to distribution and fulfillment plants on short notice. US supplier protected from possibility of conflict between the two Koreas, and later partnered with a Chinese bag producer, which opened potential to produce bags from feeder lines in company’s Chinese contract vacuum sealing equipment factories.

Competitors were attempting to skirt Tilia’s patents to launch lower price point product. 40% production and distribution were from California, an expensive state with greater freight costs when shipping to the Northeast. Workflow and cost metrics supported an RFQ process and included procedures for national retail account shipping requirements. Finance determined that 100% outsourcing would lower fixed assets, depreciation, IT, and HR costs and enhance overall financial performance. Integrated Supply Chain strategy was necessary to eliminate inefficiencies in production, transportation, warehousing, distribution, returns, repairs and fulfillment.

Tilia was acquired just as RFQs were sent. New corporate group had preferred service providers for production, distribution, and freight management. Corporate also wanted to compare benefits of consolidating California functions with a division in Indiana, evaluate Tilia’s material suppliers, and fast track production of a new Tilia product in a South Carolina facility.

Proposed "Best of Breed" supply chain approach to reduce operating expenses and increase profitability. Corporate-preferred third-party production and distribution provider proved best candidate for distribution and more efficient than consolidating with Indiana division. Convinced Corporate of partnership validity. Product requiring molding moved to South Carolina facility. All organizational migration was implemented in 12 months. “Best of Breed” strategy optimized supply chain components in priority order and provided necessary flexibility during transformational period.

Freight costs reduced by $1.7M because new distribution provider was in closer proximity to high volume retail accounts. Higher inbound costs from Far East to new facility were considered, but net savings prevailed. Reduced in-transit time to retailers by 36%, and saved $0.5M on lower wages and production costs.

Material and capacity requirements for factories, suppliers, warehouse production, and third party domestic production were being done by spreadsheet, and purchasing and planning staffs were exhausted due to daily forecast changes.

Company had bought an inexpensive, South African-written, MRP System with no management reporting capability. Software package was only partially implemented; IT function was outsourced and only on site a few days each week. Purchasing and planning staffs were not trained on the software. Only a few consultants in the US knew the software package. The interim spreadsheet solution was nearing collapse due to data volume and forecast change rate.

Retained consultant to train staff and assist contract IT staff in remaining implementation steps. Facilitated daily and weekly meetings. MRP module was implemented within three months, and Master Scheduling and basic Work Center Planning within six months. Planning and scheduling software modules were successfully implemented in time to avoid customer service problems.

Within a year, inventory turns improved 50% through daily availability of actionable information to Sales and Operations Planning Group, Purchasing, and Master Scheduling, resulting in initial savings of $200,000 and annual savings of $75,000 in storage costs. Identified immediate need for additional machine factory and bag supplier through improved planning. High forecast-change level could be processed without staff burnout.

Implementation of MRP software established basic best practice capability and enabled higher service levels with reduced days in inventory. Project set groundwork for successful SAP system implementation three years later.

Recruited by company in anticipation of rapid growth (from $60M to $350M in sales) to plan required factory and supplier capacity globally and manage supply chain tracking and reporting. Existing supply chain tracking system was not adequate to manage rapid growth planned. Factory shipping reliability was not good, particularly for new products.

60% of production was sourced in Slovenia, Bosnia, Croatia, and Hungary to take advantage of low-cost and high-quality workmanship, but factories did not have adequate in-process controls or reliable material planning and procurement processes.

Worked with IT to implement requirements planning and purchasing system (CAMP) designed for footwear and apparel manufacturers and wholesalers. With slight modification, package significantly improved ability to track status of factory orders and in-transit globally. Conducted Global Manufacturing Conferences twice per year in various countries. Presented factory performance results and proposed process improvements to over 30 countries’ managers and staff during each conference. Illustrated future factory order placement based not on price alone, but combination of price and delivery performance. Developed container-direct shipping processes for US and International. Implemented Vendor Managed Component Inventory programs in larger factories.

On-time factory shipping improved from 78% to 95%. Factory orders could be re-prioritized based on actual sales orders received, and factories performed reliably against revised dates. This capability, plus Vendor Managed Component Inventory programs reduced days in inventory by 21% (140 to 110 days). On-time shipping improved from 88% to 98%. New system improved productivity of buyers and production planners and headcount held constant during 18-month period when sales grew from $140M to $200M.

CAMP supply chain process met company needs for seven years, until acquisition by a much larger company who then transition to an SAP System.

As Director of Operations for Hi-Tec sports, made responsible for IT department to ensure structured approach to capturing business requirements across the organization, and align IT processes with business goals and strategic plans. IT manager was more interested in technical challenges than support and communication to rest of the company.

Y2K Project’s initial quotes from software provider seemed excessive in terms of software re-licensing fees, new server cost and setup charges, and cost to replace old workstations that were not Y2K capable. Implemented user problem log to monitor IT responsiveness. Conducted meetings with each company function to develop strategic and operations plans for IT.

Reduced original quote for Y2K compliance by 41%. Convinced software supplier to waive software re-licensing fee. Directly from IBM, procured significantly reduced price and reduction in setup charges for same model server originally proposed. Negotiated lower new workstation prices. Outlined personal development program for IT manager and assistant, which entailed outside training. Most department heads acknowledged improved IT team communication and service to the rest of the company.

Tilia's sales were trending at 200% of business plan, but new product quality issues and limited in-house production and distribution capacity put further penetration of national retail accounts at risk.

Product configurations for existing accounts were changing and not finalized for remaining national retail account penetration. New products’ significant quality issues were not quickly reported to Far East manufacturing operation. Competitors were working aggressively to circumvent product patents.

Obtained support to outsource production and shipping of established products to major national warehouse clubs, and refocus on managing national retail account penetration with new products by leasing larger warehouse to utilize 40% company employees and 60% temporary workers. Added extra shifts to existing facility and local third-party warehouse to buy six months necessary to set up new facility.

Third-party distribution to national warehouse clubs delivered service levels of 99%. Leased facility, operational within six months, supported penetration of national accounts while product was “hot.” Achieved inventory turns and service level goals with onsite assembly, providing 14% service level improvement despite forecast accuracy of only 45% at end item level. Eliminated product quality problems in 12 months with effective incoming quality plan, onsite engineering staff for problem analysis, and immediate, substantiated feedback to Far East manufacturing group. Reduced production and shipping costs 15% through efficient facility design.

Larger leased warehouse was necessary interim solution to support explosive growth while finalizing product configurations by national account, resolving product quality issues, and establishing demand patterns. Within three years, leased facility closed and 100% outsourcing reaped annual savings of $1.2M.