Plan to save: Three things you can do in 2009 that cost little or no money
Dr. Harpal Singh, CEO, Supply Chain Consultants -- Manufacturing Business Technology, 1/7/2009 9:27:00 AM
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There is no doubt that 2009 is going to be a tough year. With companies struggling to survive, supply chain initiatives will be focused on cost reduction and conserving cash. So what should a company do in 2009?
1)Report on emissions in the sales & operations planning (S&OP) process. Sooner or later, all companies will need to jump on the "green" bandwagon. But to be effective, changes have to make financial sense. You can't improve anything if you don't measure, so you might as well get ahead of the curve. We can argue about the lack of standards, the difficulty of measurement, differences in accounting, and so on—or we can put in place some metrics that make sense. The SCOR set of metrics comprises a reasonable starting point, and there usually is some general data available to support them.
a. Carbon emissions: The amount of greenhouse gas (GHG) emissions and climate impact due to CO2, measured in tons.
b. Air pollutant emissions: The amount of major air pollutants, measured in tons or kilograms (kg).
c. Liquid waste generated: The amount of liquid waste found in open water or sewer systems, measured in tons or kg.
d. Solid waste generated: The amount of solid waste produced, measured in tons or kg.
e. Recycled waste: The percentage of recycled solid waste.
2) Delay the ERP upgrade. I'll probably take a lot of flak from IT for this, but consider whether you really need to spend the money on the cool new feature, or whether you need to know how badly you are doing when business is slow and cash is at a premium. A better use of the money may be to use the resources that you already have (like SQL server databases) and tie in analysis tools to help you navigate through the mess.
3) Rationalize the inventory. More than likely, production may need to be idled. Various reports show that manufacturing is operating at three percent to four percent below the levels of six months ago. Even though demand is slow, whatever there is still needs to be supported. Rather than try to patch the disruptions, it is better to do a comprehensive analysis of the inventory in the supply chain. You might even be able to come up with a few dollars to help the company.
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About the author:
Dr. Harpal Singh is cofounder and CEO of Supply Chain Consultants (SCC). He is recognized as a thought leader, teacher, writer, software designer, and consultant for process change.
Dr. Singh holds a Ph.D. in Operations Research from Cornell University.
