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Lean Manufacturing Articles

GETTING THE RIGHT INPUT

This ought to be easy, but it's usually not. If you have a formal sales and operations planning process, bravo! You are on your way to success. You also have top man­agement that supports the process. If they don't, people will stop showing up and it will become just another "flavor of the month" directive that will soon lose all credibility. Unfortunately, this happens frequently.

Also common is the level of distrust between sales and marketing, the folks with the information, and op­erations, the folks who need it. We all know that just plugging in a new system will not do the trick. Systems do one thing and one thing only; they do math quickly. But it's all based on past history and things change. Pro­motions never run the same time for the same products under the same economic conditions. You need the in­put of the sales and marketing staff. Even without a for­mal SOP, you CAN make it happen, but the onus is on you.

At virtually every presentation I make, it's the most common complaint. So let's set the record straight—sales and marketing staffs are hired for their ability to sell product, not forecast. Do not babble on about all the fancy features of the system. Their eyes will glaze over and you can forget about being taken seriously. Keep all reports simple to use and understand, for everyone's sake. You don't want to create a monster that's a pain to maintain, nor do you want anything that could cause confusion or miscommunication. In practice, I find that your chances for success increase as their time required decreases. Remember that their main function is to sell product.

 

You must always be trustworthy. If you are told of planning for a major promotion, and the competition finds out, much more is at stake than a permanent blow to your credibility. If your competition finds out, your profits may be at stake. Don't leak.

UNDERSTANDING YOUR PRODUCT

   Since systems only react to trends, seasonality, and such, knowledgeable human input is a key but often over­looked success factor. No system knows that your Engi­neering group found another application that will make demand soar, or released a similar item with better fea­tures that will slash demand. Nor does it know that you've cut the price, are running a special offer, or are advertising it.

Understanding the product group and the individual items are critical. You must know why something is trending as it is if you ever hope to know if that trend will continue or increase. You need to know where you are in the life-cycle of the product, where it stands in consumer need and popularity, and why your custom­ers would want more or less of it. Is the product a staple or an impulse item? Many firms put the best and bright­est mathematician in charge of forecasting, but do little or no product training, and wonder why the results are lacking. Know your product!

To Be Continued

For balance of this article, click on the below link:

Lean Manufacturing Articles and click on Series 15


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