Inventory as a People Topic

June 28, 2016

supply chain solutionsOne of our favorite client stories on the topic of “Profit through People” goes back to one of our first clients. It is hard to choose a favorite in this category as PEOPLE make or break success at every juncture along the way.

In this case, our client needed to get a handle on inventory somewhat rapidly because it could directly affect the sale of the company — and each individual’s career success and chances at long term viability at this company. How could we bring inventory levels down while keeping the high service levels our customers had come to expect? How could we make sure the “right” inventory was in the “right” value-add distribution center at the “right” time? Seems a complex supply chain solution might be required; however, the solution boiled down to 1 tenet — PEOPLE.

We found the “right” people in the organization. In 80%+ of our client cases, they have the “right” people somewhere in the organization already. The key is whether they recognize them. In this case, we were able to readily identify emerging talent throughout the system. Interestingly enough, we found talent where we needed it by simply looking.

Next, we had to “arm” these emerging inventory leaders with the “right” tools — and more importantly, the “right” philosophy. One of the largest successes was in changing the metrics to encourage collaboration and sharing of inventory. Even though each GM was still measured as they used to be measured (since there wasn’t time to change entire systems), we were able to change the overall message. Again, simplicity can “work”.

Last but not least, we had to “get out of the way”. Encourage, empower, engage and get out of the way. Although I don’t know that the executive team articulated this message like this, it is what they followed. People might listen to what you say but they definitely will listen to what you DO. The team was set up for success — and it worked! Inventory was reduced by 30-40% on the core product lines while maintaining high service levels. Thus, less cash was tied up unnecessarily while customers remained happy. Debt was freed up for the sale.

Did you like this article? Continue reading on how to Profit Through People:

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