| In any construction project, whether it be a 20 storey | | | | production down time. And by the way, while we are |
| skyscraper or a family home, two of the most vital | | | | talking raw materials, having better raw material data |
| elements considered are, firstly what environment will | | | | means that you have better communication with |
| the structure be subjected to, and secondly what is | | | | suppliers and therefore better supplier relationships, this |
| the critical foundation required to ensure that the | | | | in turn can lead to more mutually beneficial cost |
| structure stands. | | | | savings. |
| The very same can be said for the business structure. | | | | Here are two simple questions that will help to |
| The economic environment will impact the business, | | | | identify if your organisation needs improved control. |
| the foundations must be secure to ensure survival. | | | | Question 1: Are you holding to much capital in |
| The challenge with a business is that being an | | | | inventory, and still having out of stocks to the customer |
| organisation, an organism of sorts, internal change | | | | and/or production, do you need to expedite orders |
| impacts those foundations. This can mean that while | | | | with suppliers, are you writing off or mark down large |
| the goal posts may have shifted, due to the | | | | amounts of inventory? |
| environment, so to the foundation may also be shifting, | | | | Question 2: Are your purchasing and planning teams |
| making that goal much more of a challenge. It is critical | | | | using your ERP system or are they operating off |
| therefore to ensure that the fundamentals, the | | | | system in a spread sheeting package or other |
| foundational aspects of operational performance are | | | | application? If they don’t trust the planning system |
| maintained at all costs. | | | | for their decision making, should you? |
| An organisation with good operations planning and | | | | The economic conditions of the time will force |
| control will have lower inventory (both finished goods | | | | organizations to review their operations for improved |
| and raw materials in a manufacturing environment) and | | | | cost effectiveness. The right decisions made now can |
| therefore a shorter cash to cash cycle. This control | | | | be extremely beneficial to you and all of your |
| over inventory will also have direct, bottom line benefits | | | | workforce. |
| such as reduction in inventory obsolescence and | | | | Operations planning and control is the cornerstone to |
| therefore stock write off or markdown clearance | | | | effective decision making, profitability and adaptation in |
| pricing. | | | | a rapidly changing environment. |
| Better inventory control also means that there are | | | | For a free copy of my e-Book “Operations |
| often less changes to plan due to raw material out of | | | | Control. A guide to delivering improved Planning and |
| stocks, which in turn reduces your unscheduled | | | | Inventory control. |