All Supply Chains have ‘easy fixes’
I often refer to this case study, because it’s a great example of an easy fix to save money in Supply Chain management.
The company provided products to Laboratories that included White Cotton Gloves. We were auditing the processes in the warehouse when I noticed what was happening with the white gloves.
The short version of the story is this…
Rob: I can show you how to save $250,000 a year and you can do it tomorrow.
MD: OK, tell me.
Rob: Every time you get an order for a pair of white cotton gloves, send the customer $5 and tell them to buy them from Kmart….
MD: What! ‘Expletive deleted’
Rob: It’s like this. The gloves sell for $5 a pair. They get sent to the customer in an overnight satchel that costs $7. The cost to process the order is $5. The cost to pick and pack the order is $3:50. Then there are costs associated with ordering from suppliers, receiving and storing the product, the cost of inventory and so on.
MD: OK, I get the picture. But seriously…
Rob: Just ask customers to order in packs of 5 pairs. Even give a discount. Maybe buy 5 get one free. You’ll save $250,000 a year.
MD: Done. Today!
We then went on to resolve the main issues in the warehouse processes.
Think about your Business and your Supply Chain
What are your ‘White Gloves’ that are causing profit leakage?
Do you have an example to share below?