Are you Collaborating?

Are you Collaborating?

This is a question I ask all my prospects and customers every time I meet or speak to them. I believe it is that important. Well, 100% of the times the answer is yes.

Once I present my definition, the yes drops from 100% to about 20%.
Why does the answer change? Basically due to definition and the processes that are required.

So let’s begin by defining collaboration:

“The action of working with someone to produce or create something.”

Based on this definition they are correct in saying that they collaborate. So let’s dig deeper and understand why the 100% drops to 20% when I use my definition and add processes to it.

 

Here are some of my questions.

• Do you share your sales forecast with your vendors?
  • Are they part of your forecasting process?
• Do you receive your customers’ sales forecasts?
  • Do you build your forecast based on your customers’ support?
  • Do you work with your customer to build their forecast – are you part of their process?
• Do you build your pricing based on input from both your vendor and customer?
• Do you use joint inventory management processes such as Consignment Inventory and/or Vendor Managed Inventory?
• Do you offer your customers inventory allocation/reservations to support their forecast?
• How about automated processes such as:
  • EDI
  • Vendor portals for direct purchasing
  • Customer portals for direct ordering
• What about your system capabilities?
  • Can you integrate directly into other systems?
  • Can you provide the necessary information?
  • Can you consume the necessary information?
  • Can you analyze the information and use internally as well as provide externally to partners?

Distributors are operating with razor thin margins and without real collaboration these margins can erode. With real collaboration you can increase these margins.

An example would be collaborating with a vendor.

• Provide a forecast for all items to be purchased
• Agree to delivery dates based on forecast with cancellation and over/under percentage
• Negotiate pricing based on forecast and over/under percentages and lead times
• Negotiate pricing breaks based on consolidated shipping methods – quantity/volume/dollars
• Reduce inventory costs by negotiating direct ships
• Reduce inventory costs by negotiating VMI inventory
• Be create on more collaborative agreements
• And more

So I ask my question again – are you collaborating?

Learn about Distribution solutions for Microsoft Dynamics AX

Dominic Telaro CFPIM, CIRM
VP Industry Solutions, SBS Group

December PMI Results Round out 2013

After an unexpectedly strong push in November, the Purchasing Managers Index (PMI) fell slightly in December, down to 57 from 57.3. This ends the 6 month growth streak in the manufacturing sector, although it does mark the 55^th consecutive month of growth for the overall economy.

As expected, Exports (-4.5%), Inventories (-3.5), and Backlog of Orders (-2.5) dropped heavily with the holiday season ending. Exports and Backlogs are still growing, but at a lesser rate, while Inventories are now contracting. Production (-0.6) was the only other factor to decrease, but still maintains the second strongest index ranking of 62.2.

The highest ranking on the index belongs to New Orders (+0.6) which hit 64.2 and fell behind Customers’ Inventories (+2.5), Supplier Deliveries (+1.5), and Prices (+1.0) for strongest growth rate. However, Customers’ Inventories are still quite low, registering only 47.5 on the index which marks the 25^th consecutive month trending below the 50.0 line. Employment continues to rise (+0.4) while Imports reflected no change, remaining at the 55.0 level.

In December, only 13 of the 18 manufacturing industries reported growth. This was down from the 15 in November. However, November was the strongest month for 2013 with the 57.3 mark. The 2013 average was 53.9, with the first half of the year averaging 51.5 and the second half jumping remarkably to average 56.3 on the index. The 2013 PMI rose 2.7% over the 2012 rating of 51.2%.

The last 6 months of 2013 produced incredibly strong results for the manufacturing and distribution industries. SBS Group has a dedicated team of industry experts and ERP solutions that can help your organization capitalize on the strong growth. Contact us for more information.

September PMI Reaches 2013 High

The Purchasing Managers Index (PMI) reached a 2013 high in September, continuing the growing trend in the manufacturing sector for the 4^th consecutive month. Climbing to 56.2 on the index, this is the highest PMI level since April of 2011, when the index topped out at 59.4.

The PMI is a report maintained by the Institute for Supply Management (ISM) that indicates conditions of the manufacturing industry. The PMI score is on a scale of 0-100, with a rating over 50 indicating better conditions than the previous month. Along with PMI, production and employment continued to grow at increasing rates, while new orders, exports, and imports grew at contracting rates.

Supplier deliveries continued to slow at an increasing rate for the third consecutive month and customer inventories dropped for a 22^nd consecutive month, but is beginning to climb out of that hole, jumping from 42.5 to 43 on the index. Prices increased for the second consecutive month at the second highest rate (+2.5 percentage points), falling behind order backlogs (+3) which propelled their index level to 49.5, indicating slightly below average conditions, but rising. Inventories were the only index level to change trends, finishing the month at an even 50.0 from previous months below the average mark.

Even with the high rating and mostly positive signs, only 11 of the 18 manufacturing industries are reporting growth, compared to the 15 in August, 13 in July, and 12 in June. May was the last month that did not show growth in this capacity, indicating only 10 of the 18 industries reported growth, compared to April’s 14. May, 2013 was the lowest rated month (49.0) since May of 2009 (41.7) and the first to fall below the 50.0 median since November 2012 (49.9).

This record setting September helped bring the third quarter average up to 55.8, easily surpassing the Q1 average of 52.9 and Q2 average of 50.2. While the respondents have been mixed, with some industries claiming “Overall business is picking up”, others have experienced “Overall business is flat to down across the board”, these last few months are promoting cautiously optimistic forecasts going forward for the manufacturing industry and general US economy.

With the manufacturing industry on the rise, make sure to have a plan in place to capitalize on this growth. SBS Group has industry experts with proven solutions to help any manufacturing or distribution business. You can contact us for more information on the right solution for you.

Get Your Distribution Facility Fully Functional

Operating a distribution facility with success, whatever the size, presents its own unique set of supply chain dilemmas and inefficiencies to overcome. Effectively managing your inventory, ensuring accurate data transmissions, and providing advanced customer service are just some of the distribution challenges faced by companies today, that when vanquished, contribute to increased productivity and higher profit realization.

However, as a distributor, with the implementation of advanced software and newly designed supply chain management programs, you can solve your distribution challenges, and improve overall operational efficiency, consistency, and accuracy in your workflow activity, and establish precision controls that continue to improve your fulfillment performance.

Improved Workflow Efficiency

Every time an employee has to retrace their steps in a single pick, pack, or ship activity, you lose money in wasted payroll. And although the amount may seem miniscule, when multiplied by the number of employees and orders processed each day, this unnecessary expense compounds exponentially, contributing to excessive yearly costs.

Yet, with advanced distribution software, your distribution challenges to efficiency evaporate with program tools that speed informational smartlists directly to the employees. These lists contain detailed supply chain data that include priority and document status, shortage default fulfillment information, and other vital statistics your employees need to perform their jobs.

In addition, these programs allow you to configure fulfillment workflows and identify the key processes according to your specific operations and departments to maximize picking, packing, and shipping procedures, so that wasted efforts can be eliminated from your distribution process.

Improved efficiency in your workflows streamlines employee distribution tasks and decreases your order-to-invoice time, increasing your profit margins. By using advanced software applications, your company can overcome the distribution challenges to productivity with effective workflow solutions that breakdown the stages involved and provide your employees with the information they need to work smarter, better, and more efficiently.

For more information on the best software for your distribution  needs, contact one of SBS Group’s industry experts. For over 25 years SBS Group has been providing solutions for over 1800 ERP clients and was recently named as one of the Top 20 Microsoft VARs in the world.

Distribution Supply Chain Technology: From Order to Invoice

Effectively managing your customer accounts from order-to-invoice is one of the many distribution challenges companies face in today’s instant marketplace. Distributors must conduct supply chain operations with reliable accuracy to maintain profitability. When using an out-of-date, or manual entry system, the inevitable errors that occur can not only cause distribution inefficiencies, but often erode customer confidence, producing significant losses over time.

However, recent innovations in technology have provided customer service solutions for distributors that eliminate distribution challenges and offer benefits by integrating and instantly transferring information automatically. These newly designed software programs are developed specifically to streamline and improve distribution pick, pack, and ship processes.

Precision

With an advanced distribution software program, your company can perform fulfillment tasks with precision. Featuring customer service tools such as tailored sales fulfillment workflows, item codes, and pick lists that outline specific customer requirements effortlessly, without adding the burden of manual input, these dynamic new programs allow you to maintain an accurate and rapid fulfillment rate.

Enhanced Tools 

Other tools included in the software eliminate the distribution challenges surrounding specialized orders and distinctive customer demands, allowing you to customize labeling, preparation, and packaging instructions per customer to prevent errors. You may also cross reference your inventory and order placement directories with your customer’s own unique item codes, as well as set customer specific item substitutions, enabling you to provide a more efficient service.

The superior supply chain controls generated by installing new distribution software gives your company the ability to meet and overcome any distribution challenges, and the improved accuracy and enhanced customer service tools featured in these programs not only increase your overall distribution efficiency, they provide methods and techniques that improve transaction visibility, and offer practical service solutions that will develop customer loyalty and ensure sales.

For more information on the best software for your distribution and manufacturing needs, contact one of SBS Group’s industry experts. For over 25 years SBS Group has been providing solutions for over 1800 ERP clients and was recently named as one of the Top 20 Microsoft VARs in the world.