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Shelter Chieza Change Management
Compliments of the new season! I must admit that January is not one of my favourite months of the year. My advice is capitalise on the downtime and focus on preparing for the busy season. Make time to plan and audit – a plan makes it easier for you to get where you are going. For you to know where you should go, you first need to know where you actually are.
By examining specific areas within your company, you should be able to determine which areas worked against growth and productivity in the past year.
Supply and inventory management: Inventory is one of the most expensive assets on average representing 40 percent of total invested capital.
Firms can reduce costs by limiting on hand inventory levels while customers become dissatisfied when an item is frequently out of stock.
Companies must strike a balance between inventory investment and customer service levels.
If you want to avoid such kind of a scenario you might need to consider keeping safety stock.
I have observed situations where a company holds too much inventory, some have suffered as this has a possibility of leading to low inventory turnover.
Select suppliers – This component of business management is key. If one of your suppliers is not willing to consider price reductions, simply look for alternatives. Suppliers in this county have a habit of using their bargaining power to shortchange their partners.
This happens in areas where there are limited suppliers for a component. The beginning of the year is the time to publish your tenders and spell out your requirements to various possible suppliers and select those that offer the best value in terms of meeting the specifications and low pricing.
Nowadays sourcing from two or three suppliers keeps prices low due to competition.
Review your performance management programmes: Don’t be over-ambitious with performance management programmes.
If you want to be more effective try focus upon the three or four key areas you really want to change or improve through the development of a performance management process.
These programmes put focus on the manager who must motivate and coach the people they work with to achieve wins for everyone.
Review customer statistics – All customers are not created equal, it is advantageous to know your customers well, rank them based on volume or revenue and treat them accordingly.
Make sure you are able to gather information about customers who have reduced or withdrawn their business with you – the most expensive cost on your financial statements could be the cost of not doing business with certain customers.
Once you determine who those customers are, think of the big picture and develop a game plan for resurrecting each account.
Develop your products – Investigate new ways of developing your business. Ensure that your current and prospective customers have easy access to professionally designed marketing materials with updated material, now is not the time to have the wrong email address and telephone contacts.
Job designs – The beginning of the year is also the times to review the benefits of well designed jobs.
In these economic times, job rotation has become more popular to bridge the liquidity issues.
I prefer calling January the “rise and shine” month. Customers are experiencing a spending “hangover” from all the Christmas buying and they are probably not in the mood to spend extra in the first month of the year.
As a business, get your house in order, the early bird catches the worm.
Till next week, May God Richly bless you!!
Shelter Chieza is an advisor in business management issues. She can be contacted at [email protected]
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