By Tim Salaver, MBA, PMP, CSSMBB President, APICS Golden Gate Chapter
President, Cornerstone Systems Solutions
Good Customer ExperienceDetermines customer satisfaction levelsCreates loyaltyDefines the customer relationshipDrives revenue growthRequires Best Practice Inventory
ManagementIs Traditional and Online
Bad Customer ExperienceDrives away customersPeople remember vividlyCaused by poor training Result of poor inventory management
practicesHas greater publicity
“Satisfied Customers Tell Three Friends,Angry Customers Tell 3,000”
What is a Small and Medium Business?What is your perception?How large is an SMB?What is the Annual Revenue or Asset Base?How Many Employees?Small Business Administration Definition (source:
sba.gov)1. is organized for profit; 2. has a place of business in the United States; 3. makes a significant contribution to the U.S.
economy by paying taxes or using American products, materials or labor; and,
4. does not exceed the numerical size standard for its industry
Industry Group Size Standard
Manufacturing 500 employees
Wholesale Trade 100 employees
Agriculture $750,000
Retail Trade $6.5 million
General & Heavy Construction (except Dredging) $31 million
Dredging $18.5 million
Special Trade Contractors $13 million
Travel Agencies $3.5 million (commissions & other income)
Business and Personal ServicesExcept:
$6.5 million
Architectural, Engineering, Surveying, and Mapping Services
$4.5 million
Dry Cleaning and Carpet Cleaning Services $4.5 million
SBA Size Standards (sample)Table of Small Business Size Standards Matched to
North American Industry Classification System Codes (source: serv_sstd_tablepdf.pdf)
492110 Couriers and Express Delivery Services 1,500 EE423210 Furniture Merchant Wholesalers 100 EE541512 Computer Systems Design Services $25.0M622110 General Medical and Surgical Hospitals $34.5M522110 Commercial Banking $175 million in Assets111333 Strawberry Farming $0.75M111336 Fruit & Tree Nut Combination Farming $0.75M
Inventory ProcessesCapstone to Inventory ManagementEvery company has an inventory processFor Better or WorseNeed to address customer’s demands
appropriatelyServices inventory processes are not so easily
defined as in Manufacturing
Inve
nto
ry Man
ag
em
en
t
Pro
cure
-to-P
ay (a
ka R
eq
-to-C
heck
)
Strategy
Processes
Accuracy
Resources
Tools
The dreaded responses“We don’t carry that item”“We have it in a different color”“We can order it for you. It should be here in 2
weeks.”“I don’t know”“I thought we had it on the floor”“Let me check the warehouse, the system seems to
be down”“It shows we have 2, but I know we have more
than that in the warehouse”“We ran out earlier in the day, sorry about that”“I’m sorry for the wait, a big party just came in.”
Service versus ManufacturingSkillsKnowledgeInformationMenusContentBlogsEntertainmentQUALITYPRESENTATION
PartsSub-assembliesRaw MaterialsIn-progressFinished GoodsItemsOptionsQUALITYPRESENTATION
Inventory AccuracyNot an OptionExpectedCompany ValuationHow often do you count
and value inventory?Is key to meeting
customer service levels
Inventory ToolsHand Held TechnologyInformation SystemsPoint 0f SaleWarehouse Management SystemOnline TicketingOnline Ordering Configurator systems
Inventory StrategyWhy Last?Because SPART isn’t a good acronym to
remember To create a workable and executable inventory
strategy requires knowing what processes, accuracy, resources, and tools are available
Focused“Kitchen Nightmares” with Chef Gordon Ramsey“Tabatha’s Salon Takeover” with Tabatha Coffey
Aligns to Corporate Objectives and Strategy
What HappensWhen PARTS Work When PARTS Don’t
WorkHigher Customer
SatisfactionGreater ProfitabilityDecreased WasteLower ShrinkageLess Item ObsolescenceEfficienciesEffective Product
ManagementGreater value to the
customer
Lower Customer Satisfaction
Lower ProfitsIncreased WasteHigher ShrinkageMore Item ObsolescenceInefficienciesPoor Product ManagementHigher costs to the
customerLoss of Business
Questions, Comments….What else do you wanna know??
Tim Salaver, MBA, PMP, [email protected]
702-286-7464
Additional Resources Arnold, CFPIM, CIRM, J. R. Tony, Stephen N. Chapman, CFPIM, and Lloyd
M. Clive, P.E., CFPIM. Introduction to Materials Management. 6th ed. Upper Saddle River: Prentice Hall, 2007.
Brooks, Roger B., and Larry W. Wilson. Inventory Record Accuracy: Unleashing the Power of Cycle Counting. New York: John Wiley & Sons, 1995.
Mercado, Ed C., CPIM, C.P.M. Hands-on Inventory Management. Boca Raton: Auerbach Publications, 2007.
Novak, Stephen, CPIM, CIRM, CQMgr. The Small Manufacturer's Toolkit: a Guide to Selecting the Techniques and Systems to Help You Win. Boca Raton: Auerbach Publications, 2006.
Piasecki, David J. Inventory Accuracy: People, Processes, & Technology. Kenosha: OPS, 2003.
Wild, Tony. Best Practice in Inventory Management. 2nd ed. New York: John Wiley & Sons, 1997.
Fundamentals of Inventory Control, version 2.4. Chicago: APICS The Association for Operations Management, 2002.
Fundamentals of Operations Management, version 2.1. Chicago: APICS The Association for Operations Management, 2002.
Fundamentals of Materials Handling and Warehousing. Operations Management Education and Research Institute of Canada (OMERIC), 1999.