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Real Issues. Real Answers: Managing Evolving Inventories

“First, congrats on the 40% drive. My question would be, ‘how are we growing at such a great pace and how can we keep it there?’ Answer this question first so you know what not to mess with. In other words, controls are good but please don’t micromanage your team to death. You and your cohorts made it through the tough times and now is the time to reach for the stars. Don’t let up selling! Keep A items in stock at all times. Keep your trucks clean and your drivers paid well with smiles on their faces. We scan all items into our order, AR, receiving, etc., systems so we don’t have boxes of paper to mess with. It’s all in our computer system.”

“So many new products have hit the market over the last five years. Options galore. We can’t stock them all, and I’m not sure how the distributors can handle all they need to be successful, but they do. Many manufacturers have shortened lead times which has helped in many cases to meet some of today’s timesensitive builders and projects.”

“Put in place a comprehensive set of tracking metrics focused on lean, continuous improvement.”

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“We’ve dealt with similar issues and have successfully addressed them by going back to the basics and using an organized, common sense approach. Nothing fancy here; just keeping the lumber organized, reinforcing good housekeeping practices of cleaning up behind yourself and keeping things in their place, paying attention as you work, addressing the details and, most importantly, pulling everyone together as a team working toward a common goal. I say the team is most important because no matter how many policies you have, you are only as good as the worker actually doing the job and caring enough to do their part toward the bottom line. We’ve worked hard to show our employees that we are all part of the same team and we are all willing to do what needs to be done.”

“Each person is integral to our success and we’ve shown that through things as simple as bringing in breakfast and lunch once a week, providing water coolers filled with Gatorade, and a quarterly profit sharing program where each employee gets a check based upon their performance in that quarter’s success, so that they are always looking for ways to be more efficient, increase productivity, and take care of those details that when added together can really have an impact. In this way, we’ve created a program where our employees look to maximize turns and minimize shrink because they see the benefit to themselves right in their pocket. It’s not just the company’s success it’s their personal financial success, as well. In short, everyone works together with an eye to the bottom line.”

“Discipline and diligence.”

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“When you get it figured out, let me know. We have to constantly watch everyone to make sure that they are receiving and delivering the right product. Training is the best solution I have. The employees that care do a really great job.”

“Working hard on the same things, pay attention to the market and follow the direction of other smaller yards and operations.”

“Hire better-trained personnel and put them in charge of the people under them. Have a supervisor who answers to the manager when questions arise.”

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“This issue is a valid one. We have more choices as do our customers, which makes the business more complicated. Special orders are a much bigger percentage of our total business, and we make the sales and orders a back-toback process with our manufacturers. A significant share of our inventory is sold before it arrives.”

“Can’t be all things to all people. Choose a base inventory, and make it clear that anything outside the base is special order. Special order means extended lead times, full quantities and no returns. Stay in the base line and you can order and return what you need and don’t need in real time.”

“Our customers expect us to provide much more service and inventory control than our pre-crash business. Customers that weathered the downturn have not replaced the employees they were forced to let go, and expect us to fill that void with a different level of supply service.”


Have a Real Issue? Contact me at Rick@LBMJournal.com.

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