Our Approach

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When engaged to uncork the operational bottlenecks for manufacturing and distribution companies, the SPG employs a method defined by the acronym A.I.M. It is a progressive three-phase approach that has successfully achieved process improvements, increased operational efficiencies, improved productivity and streamlined supply chain activities.

Here is how we A.I.M.:

The Office of Naval Research and others have conducted various studies on icebergs. The collective research reveals that approximately 87.5% of an iceberg’s mass is submerged below the water’s surface. Is it any wonder then why the Titanic and other seafaring vessels have run afoul of these massive chunks of frozen water?

The survey results are scientific fact. The Schwartz Profitability Group has a related corollary – Most operational problems are rooted in causes not initially identified. Like the tip of the iceberg, the bottlenecks observed and initially thought to be causes are only the symptoms of a greater root cause waiting to be identified.

The SPG attacks client problems by first performing an assessment of current conditions viewed through its objective and experienced lens. With over 20 years of corporate experience, including holding positions of CEO, President and COO, plus over a decade of consulting, the SPG can assess their clients’ bottlenecks through the eyes of one who has lived in their world.

Here is an example to demonstrate the benefits of an Assessment phase.

An assembler/ distributor of testing equipment believes they are bursting at the seams. Not enough room in the warehouse they proclaim. Presuming so, they are not in a position to relocate. So they engage the SPG.

After two days on site walking the facility, interviewing personnel and just general observation, it became apparent that their bottleneck was not space but how they handled their inventory. Their pain existed because they lacked the operational discipline in purchasing and utilization of their MRP system.

Through the combined efforts of the SPG and a software consulting colleague brought to the client by the SPG, the client was trained on the proper use of their MRP system. The results were overwhelming. Products were purchased based on need and lead time, thus reducing in-stock inventory by a minimum of 25%. And as a byproduct, cash flow improved proportionally, the money remaining in the company coffers instead of spent on inventory sitting needlessly on the shelf. With more money, their Accounts Payables were reduced. They could once again take advantage of cash discounts.

But maybe the biggest benefit was the delay in their expansion plans. Not because of excessive inventory but rather due to sales growth . . . the best reason . . . the company did relocate . . . three years later. Because of the delay, their construction occurred during the early period of the most recent recession when material costs plummeted. The client saved hundreds of thousands of dollars building the new facility . . . at a time of choice.

For many, as we prepare to turn the page on another year, we think back through the past year, consider what we accomplished . . . and haven’t . . . and arrive at New Year’s resolutions for the coming year. The key is not simply to make the list of resolutions but to see that we actually enact the desired changes. (Unfortunately a full 75% of people almost never achieve their resolutions.) ^[1]

The first two phases of the SPG’s A.I.M. program parallels this resolution cycle. The Assessment phase is both a retrospective and a snap shot of current conditions. The resolution list, as referenced above, is analogous to the Assessment Summary Report that the SPG submits to its clients at the conclusion of the first phase.

Here are some examples of recommendations extracted from various Summary Reports . . .

Employing lean practices and a better design, a 10-15% improvement can easily be achieved in the work flow processes.
A program to consolidate product will create additional space . . . possibly up to 40%.
It is represented that a portion of the finished goods inventory is obsolete or inactive. That inventory is consuming highly valuable space.
It was revealed that the plant is not “predictable” when it comes to getting product “out the door.” A thorough analysis of the planning function, coupled with more effective use of your computer system, can help to smooth out production spikes and valleys and ensure a greater overall output.
Cross training will benefit the staff during times of unexpected increases in activity.
Based on current numbers, even a 10% reduction in inventory from deploying a forecasting system would reduce cash outlay by $200,000, reduce costs associated with funding the acquisition costs and save room in an otherwise jam packed warehouse.
Racking that maximizes ceiling clear height can increase storage by 50% within the same footprint.
An attainable 25% reduction in time to pick an order would translate to a 36% increase in orders shipped per day.

The report provides our clients with recommendations for uncorking the identified bottlenecks. But as with the resolutions, the key is Implementation . . . whether for some or all of the proposed solutions.

The SPG partners with their clients to achieve their goals. From a roll-up-your-sleeves get-your-fingernails-dirty participation, to supervising client teams, to assuming interim management positions, the SPG gets results for their clients.

Backorders reduced from over $65,000 to less than $5000
100% increase in order picks per day – 2500 to 5000
Successful move and WMS implementation in only 3-1/2 months
On time delivery jumped a full 10 points from 88% to 98%
Inventory reduction of 20%

Studies have shown that it takes a full 21 days to break old habits ^[2] and form a new one. Complicating the timeline is that one mis-step and the clock restarts from scratch.

The SPG supports its clients post-implementation to ensure that the newly implemented behaviors stick. This can be accomplished by various methods.

Documenting the new processes
Establishing training programs
Measuring results (an old adage advises – “What gets measured gets done.”)
Benchmarking activities against best in class
Improving cultural norms, expectations and behavior

The A.I.M. approach . . . Assess, Implement, Monitor . . . has proven to be an effective methodology for achieving superior results. Give us a call or e-mail to discuss how you can A.I.M. for success.

[1] http://www.steveshapiro.com/2008/12/11/interesting-new-years-resolution-statistics/

[2] http://www2.fiu.edu/~oea/InsightsFall2004/online_library/articles/daily%20activities%20to%20help%20change%20habits.htm