Category Archives: Products

product development, product design, product management.

Can YOU beat earnings with lower revenue?

Ironically, today’s earnings report from Wal-Mart proves the point I made in my Blog      “Low earnings /Low Profits – What to do?”

I have a love/hate relationship with Wal-Mart.  I often shop their begrudgingly. I would prefer to support a local business, but when I am buying toothpaste my choices are generally a Wal-Mart, Chain Drug Store, or grocery store.  There really aren’t too many local businesses to buy toothpaste from.  Wal-Mart is cheaper, and there are always other items that I get while there.  They save me time and money and there for they are a value.  I support local when possible, but frankly I couldn’t afford to buy as many things if I shopped only local and I am a typical American who wants as much stuff as possible.

Yesterday Walmart announced that 2015 Q4 revenue was down, and they expect very little sales growth for all of 2016.  Same store sales were reported to increase less than 1% in 2015. To insure they can meet or beat earnings, they have decreased operation costs and reinvested in Human Capital, choosing to focus on culture over new market channels.

Announcing the closure of 269 stores worldwide and releasing close to 10,000 workers will surely get a lot of attention.  But Wal-Mart is focusing the narrative on developing its Culture.   Wal-Mart is investing by raising the wages of it workers. This is very strategic since they have a history of Legal and Public Relations issues around wages and practices.  Improving employee engagement will help drive business into their well established retail presence.  I support this strategy, but I think they have a lot of work to do besides raising wages.

Walmart recognizes that the growth of online shopping has impacted brick and mortar and they have already begun testing new strategies to target these areas.  Experiments in the Grocery offerings (Organic Product selection & home delivery), introducing their price matching app (which is awesome), the ever expanding electronics section, and the “No Questions return policy” to name a few will go along way to exceed customer expectations and build loyalty.

So…… sales are stagnant, they are giving nearly everyone a raise, and adding to their operational costs….how is this a good plan?

Well to start, the Thursday announcement also mentioned that they beat earnings and brought in a higher dividend than forecast.  Earnings came in at $1.49/ share on a projected $1.46 and quarterly dividend was .50 on a projected .49.  At the open of today their stock is down ~4% and they have fallen ~27% over the last 12 months.

But they still had a 2% increase in dividends and profit!

What would your business do in this situation?  Can you bring in a higher profit while loosing expected revenue?  Would you give a raise to help increase store sales?

Proper planning, strategy, and vision makes the difference.

Carpe diem!

How to make Excellence achievable

I have been a student of Management for 30 years. Management is as much of an art as it is a science and understanding that you practice management rather than it being a degree on the wall shows that you continually evolve in this position. To be a successful Manager you must have an understanding of how to achieve Excellence. Excellence is a combination of several factors depending on what industry you manage in.  Today I am going to discuss the number one thing to do to achieve Excellence in what YOU do.

Excellence is an Attitude

You do not achieve Excellence by completing a checklist, you do not achieve Excellence by doing what the boss said, and lastly, you do not achieve Excellence through watching an inspiration video (although there are some very good ones).

Excellence is a lifestyle

Excellence needs to be how you address everything in your life.  Excellence means never saying “whatever”.  It is setting the highest standards to hold yourself to and having the discipline to hold yourself accountable.  I don’t care what you are doing, you can be excellent at it.  Washing the dishes, cleaning the bathroom at home, creating reports, or providing customer service, all can have levels of Excellence attached to them.

You will not achieve Excellence if you think it only applies to a “work” atmosphere.  Excellence can’t be turned on and off.  It’s just in you.

Lets define a few terms;

Excellence – The quality of being outstanding or extremely good (Webster).   Achieving or distinguishing a superior quality in an action or outcome (Simons)

Attitude – A settled way of thinking typically reflected in a persons behavior (Webster).  An approach or outlook demonstrated through actions, communications, or outcomes (Simons)

Pride – A feeling or deep pleasure derived from ones own achievements (Webster).  Personally Responsible In Delivering Excellence (taken from my Corporate Training days)

I am certain I have been “picked on” by those around me for having an Excellence mindset.  I have extremely high standards for myself.  I hold myself to higher standards than I have ever held an employee too.  Why, because it is important to me to do things right (whatever right is).  I look at whatever I do as a product I am producing, and I don’t take it lightly.  Some think I am too hard on myself.  No, I am not.  I just don’t say “whatever”.

Excellence is also about precision.  You need to know exactly what needs to happen in order for it to happen.  Once again, this will carry over to other aspects of your life.  In addition to Management, I am also a classically trained Chef and a life long Drummer.  Precision follows me in both of those.  Playing drums is as much about where you hit the drum or cymbal, and at what angle and with how much force as it is about the rhythms or change ups.  If you match the rhythm but you aren’t precise with your stick, you are a hacker.  If you do it right, you are a drummer.  Doing it exactly the same way every time is Excellence, and much harder than you might think.  The same goes for cooking.  Many people can flip an egg but having the timing to have an entire meal or banquet “go out” together, where no food has had to sit (which degrades quality) and everything is cooked or prepared perfectly can be like conducting a symphony.  Variations will always be noticed by someone in your audience so it is important to be consistent EVERY time.  You need to be very precise with your planning and execution.  You need to know ahead of time how it needs to happen.   Both are great examples because when you haven’t achieved Excellence, you know right away!

Does Excellence allow for mistakes?

Absolutely!  I am far from the best there is at so many things.  Some people confuse my quest for Excellence as thinking that I think I don’t make mistakes.  I certainly do make mistakes, but because of my attitude, I likely work harder to not repeat mistakes than others that don’t have this mindset.  Mistakes are a very important part of learning and you can’t learn from them if you don’t recognize them.  I must confess I get mad if I repeat my own mistakes though.

If you haven’t read the short but EXCELLENT book about the FISH Philosophy, I highly recommend it.  It applies to everyone and will help you realize what attitudes you are choosing.

This is why Excellence is achievable, because it is an attitude, and as you may read in FISH or my other blogs about FISH.

“Choose your Attitude”

Carpe diem!

 

10 steps to a better Inventory Process

To many it is a dirty word, but most businesses understand that “taking inventory” is a necessity and must be dealt with.  The frequency of it is often determined by the industry and it ranges anywhere from once a week to once a year.  But Inventory is an extremely important tool and when managed properly will not only add to a companies profit line, but contribute to keeping your cash flow lower.

Many dread the process.  It can be very lengthy and tedious.  We thought it would be helpful at year end to pass along some tips to help make this process more efficient for you.  Simply put, the more organized you are, the easier and quicker it goes and the better you do it, the more you know where your money is.  When working with clients, I often offer to do an inventory with them.  They usually jump at the offer for help, and it gives me great insight as to how they run their office and thus lets me know where to dig in deeper.  The goal is usually to do a better job with Inventory and save them time doing it.  I have listed those things I look for below.

Inventory is a process; don’t view it as a task.  So many look at it as a one time task of counting what’s on hand.  That part of the process is referred to as the Physical Inventory, but it should not be viewed as the only component.  What leads up to, and happens after the Physical Inventory is equally important in the process and each adds to the efficiency of the other.

Why is this process so important?

Inventory takes a lot of time to perform correctly.  What if you could save ½ hr or more every time you do it?  I save most people at least an hour by having them follow the steps below.  Oh, and also….this is money were talking about.  Inventory is important because the dollars it identifies are vital when figuring out your product costs, so the more detailed the collection process, the better your product costs look.

If you don’t have everything I list here in place, it may take a few months of implementing to really see the effects of how much time it will save you.

Here are what I refer to as  the 4 components of the Inventory Process;

Determining need(s)

    • Establishing what needs to be in your inventory ahead of time helps streamline the counting process.
    • Establish Product specifications and Order guides to insure consistent ordering.
    • Have Vendor agreements to insure pricing, quality and consistent supply.
    • Have Production systems in place that can establish pars on items needed to inventory.  Keeping inventory as low as possible to meet demand.

Organize

    • Organizing storeroom logically and insure items are located together.
    • Establish product pars to insure adequate space is available.
    • Create Physical count sheets to mirror storage to accelerate counting process.  (see “Shelf to Sheet” below)
    • Have someone clean and organize store room prior to counting.
    • Create different count sheets for different store rooms and consolidate like items at the end of the counting process (not during)

Daily Management

    • Label and date to help insure proper rotation (everything has a shelf life)
    • Limit access and secure storeroom when not in use. (Key control)
    • Minimize storeroom personnel to ensure consistent receiving and control
    • Limit who receives orders and handles invoices
    • Perform account receivable tasks as invoices are received

Monthly Management

Pre- Physical counting

    • Ensure the most current price is on the Inventory extension sheet (Master Spreadsheet) for each item (changes by industry) and that it is done prior to Physical counting day.  Account receivables need to be up to date at time of Inventory counts.  Doing price changes at the same time is proven to not be efficient.

Post Physical counting

    • Review and tally all Physical count sheets.  If products may be found in multiple spots, consolidate to one number to enter on the Master spreadsheet.  Doing this ahead of time will expedite the data entry AND begins the analytical process.
    • Enter counts in Master spreadsheet to allow for calculations (referred to as “Extensions”)
    • Review extensions and look for obvious errors.  – Key miss-types or entered as “each” but priced by “case” would be one of the more obvious
    • Analysis of inventory by category totals and comparison to prior inventory.  Look for any major differences, variations, or trends.

Depending on the industry, I generally advise establishing an acceptable variance by Inventory category becomes established.   If over the “acceptable” variance (5%?) then have the manager report as to why.

Other key points that will help your Inventory process
  • Make sure how it is being counted is consistent with how it is purchased, used or stored.  If it comes in a case of 100 ea., yet they are only used 1 at a time, then break the sheet down to an “each” price and inventory them by the “each”.
  • If it is purchased by the pound, then make sure there is a scale available when inventorying occurs.  Do NOT assume each one is a given weight.  There is a reason why the maker doesn’t price the product this way.
  • The Physical Count process needs to be completed at a designated time when no product will be entering or exiting the storeroom(s).  Often done after hours or before business start for the day.  If you have multiple units doing individual inventories, it is important to insure they all do it at the same time, otherwise performance comparisons are difficult.
  • Utilize  “Shelf to Sheet ” – a 2 party system during physical inventory.  Inventory is not about filling in what is on the count sheet; it is about capturing the money on the shelf.

                 Process -One person starts in the upper corner of a storeroom and calls to                                             the second person.  The person calls what item it is and how many there                                                are.  The second person finds the item on the count sheet and writes down                                             the amount.  If they don’t find the item on the sheet, they write it down                                                   separately to be added at the end of the process.  The first person then goes                                       to the item adjacent to what they just counted and calls that item off etc.                                             This is done throughout the storeroom and is a methodical way to ensure                                               everything is accounted for.

  • Make sure Physical counts are never taken while someone is sitting at their desk.  Mistakes happen and this is why they call it “Physical” inventory.
  • Lastly for proper control a non Ordering/Receiving person should be involved in performing the physical counts also.  This is a common Risk Management practice plus; people that touch these products everyday are more likely to make assumptions/mistakes during a lengthy Inventory process.

 

Carpe diem!

 

Hello World!

Today I am introducing a new blog series from C.S.Simons Consulting.  This blog will feature several different types of content on the issues that business people struggle with every day.  Advice will be given on a variety of subjects that directly effect your revenue and we are always looking for questions or topics for discussion, so please don’t be shy.

Here’s a quick overview of the categories we offer;

“Ask an Expert” Series

A collection of questions asked of me or my collaborators about many different business or management topics.  Presented simply with brief answers but we are always available to elaborate on them if you’d like.  These may be answered by someone in our firm or other experts we collaborate with.

“Conversations with a Consultant”

The format in this series is designed to be easy flowing with out too many buzz words and corporate talk.  Just simple conversations, focused on information designed to assist you with your work and help you make more money.   The majority of these topics will fall into 1 of 4 areas; People, Products, Operations, and Marketing.  These 4 key areas’ are found in every business and are the most important indicators of your businesses ability to generate revenue.  C.S.Simons Consulting exists to help others make more money, and these are the same areas focused on in our proprietary “M.O.R.E. Assessment Tool©.

“Quotes, Observations & Ironies”

Favorites and classic quotes, probably some opinions on business related current events and those that know me should expect periodic sarcasm.

 

Please let me know any questions that you have about these topics or how to implement the changes mentioned into your business.  I am here to help.

 

Carpe diem!

Conversations with a Consultant – Products

This area of the blog will be dedicated to the broad category simply called “Products”.

In this category I will outline different aspects needed to design new, or strengthen existing, products with in your company.  How to look for opportunities in the market place and the science behind how to be sure the product you design will sell prior to its launch.

I will continually challenge readers to look at there business differently.  The people, the physical location, your customers, and the energy/hype these all produce are all “products” of your business that people WILL judge you by.  It all adds up and the business that creates a better EXPERIENCE with their “products” will have the ability to generate more revenue.  Which is of course what this is all about.

I will also be speaking about different strategies to use with the products you offer.  Some choose to create a bigger, better or sexier versions of an existing product line.  So what do you need to know about the competition and what you need to do to stake your percentage of the market?

Others want to be pioneers and create something new in the marketplace.  Sounds great, but what do you need to do to be both noticed and profitable.  Being a pioneer is the expensive route to go, so how much will you need for capital reserve?  How do you project that?  We’ll talk about that too.

Most companies spend time and resources in creating and maintaining a products reputation.  There are many different tactics to use depending on what type of product you present.  How do I plan and measure this? Are your people your product? do they create your brands reputation? Or do you manufacture a product reviewed by consumers?  Very different tactics and each will be explained in this category of our blog.

Experience shows that few businesses look at all the aspects needed to create a strong and lasting product in today’s market place. A chain is only as strong as its weakest link.    Marketing Consultants may touch on these aspects but seldom take this holistic of an approach, one that considers the other areas of your business needed to support your marketing tactics (People & Operations).  While these experts usually have very good advice on what Advertising mediums or campaign tactics and strategy will serve you best, there is more to generating revenue than just getting the people through the door.  It’s about execution.  The goal of these conversations are to help you create the strongest, most sustainable product possible.

 

Carpe diem!