The Need for Speed
"We need it now!" bellowed the CEO of The Fifth Meal Co, referring to an alternate supplier for the key ingredient in their popular snack, TakeFive®. Sales had been growing at an incredible doubling year over year and already the company was close to $35M in annual sales in just four swift years. Demand was strong and competition was starting to grow.
Ruby, the head of purchasing, heard the CEO from down the hall and walked slowly into the boardroom, looked the CEO in the eye, and calmly said, “You wouldn’t let me go to the Cranberry Show last year and that’s why we don’t have any other suppliers.”
“Ha!” exclaimed the CEO. “What an excuse!" He was turning red in the face and fumed, “You know we need all the cranberries we can buy, so where are the back-up suppliers? We need them on-board now!”
Does this sound like a scene at your company? Read on to see how a great idea from IT got the solution going for this supply-chain problem.
The popular TakeFive® snack bar was sold in almost all of the 150,000 convenience stores in the US, and now the main ingredient, dried cranberries, was in short supply. The company had been sourcing from two suppliers, but one of the suppliers had sent all their staff home until the pandemic was over, and the other supplier had trouble with a bug infestation and was not shipping at all.
Roddy, the head of IT, snuck in a word. “Actually, we have a function in our ERP system that allows us list up to 9 suppliers for each ingredient. Included is the negotiated rate per pound, the contract terms for rate breaks by quantity, and contract start/end dates.”
Ruby gave Roddy a long look and drawled, “So you are saying that I should enter another seven suppliers in the system and…”
The CEO got excited and interjected, “Yeah, that’s what we need - to be able to rapidly move to the next supplier without skipping a beat. We can’t be in the position of waiting while we vet more suppliers. We have to keep shipping or we will lose accounts!
Ruby motioned for Roddy to follow her. “We’ll get right on it,” she said to the CEO.
The CEO glanced down at his phone and saw the new email with the stats on orders: 82 orders not shipped / shorted.
All he could see was red.
It doesn't have to be so frustrating.
Here are six signs that you need to take additional steps to be ready for the future:
You have only one or two suppliers for each ingredient
You don’t have contracts with your suppliers clearly defining rates and conditions
You are not using EDI
You are not fully using your Vendor Management System within the ERP
You are not having quarterly discussions with Vendors on the state of their business
You are not interested in looking at other suppliers
You can improve operations immediately and be more ready!
With the right procedures and systems in use, you will be ready for more business. You’ll be able to weather the unexpected supply-chain problems that can wreak havoc with your ability to service demand.
Give us a call.
We can help you assess your unique situation and come up with the right solution for your company. We can suggest ‘best practices’ for your company and can advise on systems so that your team operates to the best of their abilities.
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Rubenstein / Justman Management Consultants (RJMC) assists mid-market companies to evaluate, select, and implement ERP solutions including Supply-Chain Solutions. Extraordinary support from skilled and experienced consultants provide the Project Management that gets the project done. To find out if your business is ready for a change, give us a call at 310-445-5300
We know ERP. We know Supply-Chain. We know how to Get Projects Done!