This week I carried out my first international interview
with Logistics Planner, Donald Piggott from Cartridge Work (UK). As a busy
professional working in supply chain management, Donald was apply to give me a
snapshot his experiences of the importance of supply chain at Cartridge World,
the implications of overstocking/understocking and finally top tips to avoid
forecasting inaccuracy. Let’s hear what he had to say…
Holly: Hi Don! Let’s
start broad with my first question… how does your supply chain operate?
Don: As in most businesses (particularly retail), we are not
in the position of producing a finished (or end product) this
manufacturing process of the product is carried out by the links in our supply chain. Whether it is the actual
manufacturer of the whole product, or a supplier providing part of the product
to another link in the supply chain, we are totally dependent on each part or
member of that supply chain for ensuring the success of our business. Not only
the manufacturing process of the finished product, but also as importantly we
also rely on the other services provided within the links of our specific
supply chain. In this case ink products/printers/accessories to the print
industry which include manufacturers (both UK and International dependent on
price and lead/delivery times for providing the best service possible to our
customers), together with the service supplied by another important link in the
chain which is distribution/delivery to our business.
As a small business there is a need to minimize product
costs in order to remain competitive and the most reliable way to do this is by
ensuring we have a system of effective supply chain management in place in our
business. This is vital to retaining our own customers in a very competitive
market place.
We are continually reviewing the price/service/quality
and reliability from all of the links in our supply chain as a problem anywhere
in the chain will result in a problem to our business. This is usually at the
expense of the customer, the end user.
Our supply chain includes all the key elements required
to provide us with the finished product – complete printers/complete ink
cartridges/branded packaging/cardboard boxes/paper bags/ink (purchased in
Germany simply due to price ,reliability and distribution promise) so as you
can see from the above short list (which also have their own supply chain to
consider and manage)!
Holly: What are the impacts of under-stocking and how do you deal with this?
Don: There are so many
implications to this. For example, there will always be a loss of revenue/profit
if we do not have a particular product/item. As a result of this, the customer
will look at a competitor to purchase item. For our store, another issue is
that it is visually unattractive to customer or potential customer (empty
shelves etc).
Business does not grow and
loses ground in the marketplace and under-stocking could be the result of a
breakdown along the supply chain. Finding out where the supply chain is failing
it key to overcoming problems and facing challenges.
You must ensure there is a working
inventory system is in place within the business (this can be in the form of
simple spreadsheets or one of the many electronic EPOS (electronic point of
sale systems) available which identifies when a particular product/item is sold
and then calculates the remaining stock, giving the business a quick, simple
and efficient stock level at any time. These systems also incorporate ordering
procedures electronically as stock begins to deplete and will calculate for the
business what new stock is required based on historical sales levels/sales
trend etc.
Holly: What are the impacts of over-stocking and how do you deal with this?
Don: The business is carrying
goods which are not being purchased by the customer and brings the question “Are
the items/products required?” Furthermore, cash flow from the business (because
of spending on buying the overstocked goods) is being restricted which could be
used in other areas of the business.
Storage space could be an issue
with over-stocking and product becomes out-dated before their usage dates.
Holly: How are errors avoided in your forecasting?
Don: Knowing and understanding
your market, your customers and your competitors I would say would be a huge
priority. Required products and materials must be bought at the right time and
at the right price (so as not to overspend on your forecast). Having a system
in place to capture key demand and historical data and man management is
essential (do not let your IT systems totally control your forecasting…..use a
mix of sales teams/marketing. Finally, make sure you review and measure
accuracy of forecasting on a regular basis.
Holly: Thank you Don for this interview!
As a tomboy child, Holly enjoyed watching wrestling and was
The Rock’s biggest fan. She is from a tiny farming village in the north of
England and has moved to Sydney to enjoy the city lifestyle. As a conference
producer at Akolade, Holly enjoys researching with and learning from key
professionals within a range of sectors to produce timely conferences.
Furthermore, Holly enjoys how each day in the life of a conference producer is
always different and exciting!
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