sábado, 12 de julio de 2014

Patience, the forgotten key to success

Because sometimes, we may feel like our effort and hard work doesn´t pay off....

You have the potential to achieve any goal, you just need patience.

If it took more than sixteen years to Leonardo to complete his first masterpiece, shouldn´t we wait at least a couple of years before we lose hope?

jueves, 5 de junio de 2014

Slow moving inventory...your worst nightmare!

Mid-year review, and slow moving and obsolete stock start coming up in every single meeting…it´s pretty much inevitable; inaccurate forecasts, undersells, overstocks, there can be hundreds of reasons why a sku become a slow moving, and we might explore in deep some of them in future posts, but whatever the reason is, when inventory doesn’t move, the business will incur in associated carrying costs and lose of valuable resources that could be used to invest in your business.

Defining what is “slow moving” is not easy as the criteria will vary from company to company, and what is considered slow moving from some retailers might not be for others, but there is a general rule that can be applied to most companies to define if a reference is slow moving or not; Having stock worth 6 or more months of demand for any given item will indicate that this particular sku is a slow moving.

Now we know what slow moving is, we can focus on the impact that slow moving stock has in our business. From an outside perspective, you can think that slow moving stock shouldn´t be the focus of an organization as “it only has a negative effect on our inventory”, but if we dig a little bit further, we will realize that the impact of slow moving stock affects a business in ways that we never thought about before.

  • Interest paid on borrowed money. When inventory doesn't sell, you are incurring more interest charges. 
  • Insurance costs derived of inventory on hand. 
  • Obsolescence provisions; financial reserve to cover losses, write-offs, etc 
  • Storage space of course. 
  • Costs incurred when your warehouse is full of slow moving inventory; outside storage costs, build of new facilities, movement of stock from one picking location to other etc.
  • Cost of destruction of obsolete stock. 
  • Depreciation of the inventory month after month. 
  • Time and personnel, including managers, stock keepers, material handlers, cycle counters, planners and controllers.

These are only some of the aspects in which slow moving stock has an impact, therefore the sooner you tackle the “slow movers” the more profitable your business will be.

In future posts I will try to extend this topic and underline the causes and also possible solutions to slow moving inventory.

domingo, 11 de mayo de 2014

Things in life we shouldn´t forget

Today I will let those other important things in life have their space in this blog. Because life is not about setting barriers but overcoming them, is not about holding a burden but releasing it, is not about doing what you should do or what everybody else expect you to do, but doing what makes you happy...

And if you are lucky enought to have a job you love, a caring family and a good bunch of friends......there is not much else you can ask for!

domingo, 13 de abril de 2014

Push VS Pull flow

Terms like “Retail supply chain”, “Automotive supply chain” or “FMCG supply chain” have become widely popular, but there is not such a thing as a “specific” supply chain, there are basically two categories, and almost all supply chain processes fall into one of these two categories. All of the above industries fall under Pull or Push supply chain. In fairness, a hybrid new model called “Push-Pull” is being accepted as a third valid model but understanding the pull and the push models separately will make very intuitive the Push-Pull model.


What is Pull Supply Chain?

Under pull supply chain, products are manufactured based on specific customer requests, in fact, companies only make enough product to fulfill customer's orders. We also know it as “Make to Order” model (click here to learn more). We often see this model operating in High Tech Industries, where customization is the competitive advantage. Briefly, we have seen this model in automotive industry and it is being used in high end luxury market segment. The objective of this model is to minimize the Inventory and optimize supply. One advantage of the Pull system is that there will be no excess of inventory that needs to be stored, thus reducing inventory levels and the cost of carrying and storing goods. However, one major disadvantage is that it is highly possible to run out of product and not being able to supply the merchandise on time, leaving the company unable to fulfill the order which contributes to customer dissatisfaction.

What is Push Supply Chain?

Under Push model, products are manufactured based on anticipated customer orders. Companies must predict which products customers will purchase and determine what quantity of goods will be purchased. This model is also known as Make to Sock. The core assumption of push programs is that demand can be anticipated and that it is more efficient and reliable to mobilize resources in pre-specified ways to serve this demand. Some disadvantages of the Push model could include high inventory costs and huge warehousing and distribution costs, plus the fact that forecast are often inaccurate and sales can be unpredictable. An advantage of the push system is that the company is fairly assured it will have enough product on hand to fulfill customer’s orders.

Retailers heavily use push model but for some time now the big names in the retail industry are trying to adopt the hybrid Push-Pull model which is a combination of pull and push models.

The Push-Pull System

Some companies have come up with a strategy they call the push-pull control system, which combines the best of both the push and pull strategies. Push-pull is also known as lean inventory strategy. The goal is the reduction of product shortages which can cause customers to go elsewhere to make their purchases.

jueves, 27 de marzo de 2014

The supply chain that really matters; Healthcare

From birth to death, we are all part of the healthcare system; we rely on hospitals, doctors, nurses etc to provide preventive care and to treat our illnesses. Healthcare is perhaps one of the most important indicators of quality of life and longevity in a society.

However healthcare consumes an increasing percentage of our economic product. This rising cost can be attributed in part to the increase of life expectancy and to the expense of new treatments, but also it can be attributed to inefficiencies in healthcare delivery.

Patient flow represents one of the most challenging aspects of the healthcare system. When the system works well, patients flow at a steady path, moving efficiently through the stages of care, and every stage is completed with minimal delay, however,  when the system is broken, patients accumulate meaning the patients suffer considerable queuing delays.

Healthcare has unique features that make queueing problems particularly difficult to solve:

-  Queues create additional work for clinicians. Patients must be monitored and served while waiting, and their conditions can deteriorate, necessitating additional work once they get to be treated. Thus, as queues become large, the workload increases and the capacity to serve patients deteriorate.

- It can be difficult to distinguish productive waiting from unproductive waiting. In a traditional queueing system the most desirable outcome is instantaneous service, however, in a hospital, it is undesirable to reduce the length of stay to zero, as patients need to be monitored and cared during recovery periods. This can result in conflicting objectives in managing hospital beds when trying to separate productive waiting (recovery) from unproductive waiting (waiting for tests).

At hospitals, care is provided through many specialized departments, therefore when a patient arrives at the emergency department encounters repeated waits as he or she progresses from stage to stage, waiting for rooms, equipment, physicians, nurses, technicians, beds, records, gurneys and so forth. When the system becomes overloaded, the patient may wait hours or even days from being seen in the emergency department until being given the ok.

We can summarize the three major causes of queues in hospitals:

- Idle capacity due to a failure to synchronize resources (ensuring that technicians, nurses, physicians, patients, etc are present at the same time).

- Inadequate communication to ensure the relevant departments are prepared to receive patients from other areas.

- Inefficient processes that require more work than necessary or un-needed repetition of work.

Some reasons that will lead to patients waiting for placement in a hospital are can be other patients waiting too long to complete the discharge process, beds remaining idle too long from when a patient departs until the bed is prepared for the next patient, poor communication between the emergency department and the ward, a shortage of technicians, or even because there is an inadequate number of gurneys to transport patients etc.

Working on improving patient flow at hospitals will not only save money but also will save lives.

sábado, 22 de marzo de 2014

Supply chain.......local supply chain!

Have you ever wondered how much of the money you pay for the bunch of bananas you just purchased at the supermarket is due to supply chain costs? Do you know where the food you eat come from? Are you aware of the plights small farmers and producers face to compete against the giant food corporations? These are some of the questions that Pete Russell dissect during his speech. 

Worth watching, to understand how local food businesses can actually work, and what´s even more important can be fair to every single link of the supply chain.


martes, 25 de febrero de 2014


No words needed, just watch it and agree with me on this; DHL did it in style!