- Mesure and achieve ever better service excellence by posting and obsessively improving on the “Big 8 Elements”. This will guide most people to do all things right.
- Don’t hire more people until you have considered freeing slack by:
- Tightening up on low-end customers.
- Hiving off accounts from salesmen to telemarketing or direct mail.
- Operational discipline and correctness as a habit comes from:
- Look sharp, be sharp.
- 95% cycle count accuracy.
- On-time arrival.
- Day’s work in a day’s time.
- Posting and improving numbers for every job.
- If people must think about DIRTFT, they won’t.
- Document and solve with teamwork all inter-departmental and customer and supplier caused hassles. Grow and evolve procedures/training manuals.
- Always re-think, re-work, and improve on our core of “productivity plays”, especially in “post top quartile” stage.
- Measure and address any customers who are unprofitable on a “total economic value” basis.
- Identify target accounts for:
- Small orders.
- Slow pay.
- High returns; credits.
- Unphoned or excessive will calls.
- Special stock not moving.
- Spend your limited man-power and working capital on higher return customers.
- For inventory:
- Determine and move towards critical mass investment and 90% (+) fill-rates to maximize: GP$/sales call; GP$/Trx.; and customer buying economics.
- Measure, feature and sell cash-traps weekly and religiously.
- Measure top few suppliers on nine elements of service quality, personnel and a grid of extras to create an agenda for buying better, not necessarily lower.
- On pricing of products:
- Be competitive, but economically superior through service.
- Avoid cross-subsidization; probably raise margins on service items.
- For receivables:
- Have a formalized and disciplined collection schedule.
- Provide negative incentives to salesmen for slow pay and write-offs.
- Make prompt pay a condition for some extra services to customers.
- Make it the last economic concession to give.
- Systematically stretch payables to their practical limits unless discounts are worth taking.
- Flowchart all paperwork and the system for generating financial reports. Remove bottlenecks, improve timeliness, accuracy and consistency and all other elements will optimize.
OPERATIONAL GUIDELINES – SECTION FIVE