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20Questions to
Higher Profit
Together we will turn these 20 Questions
to YES & deliver ONEPOINT+
INVENTORY MANAGEMENT / SOURCING
1 Does the culture of your organization value Investment Profit over Inventory Turns?
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YES: This puts you significantly ahead of your competition. Most senior leaders focus on the traditional Inventory metrics which do not demonstrate the profit potential of your inventory. SCM can help you leverage this competitive advantage to build “a Passion for Profit’ throughout your team.
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No: You are not alone. Most companies look at the financial inventory turns measurement and not Inventory Profit. Together we will develop a plan to educate your leadership team on this important cultural shift.
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​2 Do you track Investment Inventory as a separate inventory layer?
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YES: Great move! Now consider how the individual components of this inventory and supplier level contribution can further improve Profits. SCM can accelerate this growth.
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No: A separate inventory layer provides a foundation for implementing methods to improve profit contribution from your inventory investment. SCM can teach you how to unlock this important next step to increased profits.
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3 Do you track purchase order Price Accuracy?
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YES: Very good, this process is a hidden path to profits. Are you also using this data to add profits by increasing forward buys? SCM can show you how.
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No: Developing and implementing this process can add substantial value to the organization. SCM can help you unlock this hidden path to profits.
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4 Do you track supplier Price Increase activity?
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YES: You have a useful foundation in place. Let's discuss how you can use this data to expand your margin on brand and private brand categories.
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No: Studying this information can reveal incremental profit opportunities. SCM can help you interpret the wealth of additional insights we can extract from this data.
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5 Do you have an RFP calendar?
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YES: Excellent! Also please consider all the relationships within Supply Chain that should be competitively bid (there may be more than you realize). SCM can help you adjust your RFP policies to clearly outline the process and timelines you expect your team to follow.
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No: Implementing an RFP calendar is not difficult. By engaging this basic step, you can quickly add profit and strength to your Supply Chain organization. SCM can help to quickly implement this profit potential.
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​6 Do you track total Profit Contribution by Supplier?
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YES: This is a powerful tool. Are you including all components of profit? There are some that are not so obvious. SCM can demonstrate how to leverage this information to increase profits.
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No: Understanding total profit contribution by supplier creates a framework to better manage and accelerate profits. SCM can demonstrate how to create this baseline and develop strategies to enhance profits.
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7 Can you easily define who owns Product Acquisition Cost and Company Profit?
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YES: That's great, you probably have an advantage over many of your competitors. It can be a very challenging concept to understand that all team members should have some part in driving costs down and profits up. SCM can provide the knowledge and experience to share this “Passion for Profit” and help instill it throughout the team.
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No: It can be a challenge to get your team members to understand that each of them has a part in driving costs down and profits up. Few companies have dedicated resources to studying profit trends and developing strategic priorities around improvement. SCM can share with you the knowledge and experience necessary to create this “Passion for Profit” and help you nurture and grow it throughout the organization.
TRANSPORTATION
8 Do you track Inbound Freight at the supplier level?
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YES: Very impressive- Is this information used to help set selling prices and also included in supplier profit evaluations? Have you calculated the SKU level impact of total Supplier freight costs? SCM can help you leverage this information to reduce costs and improve profits.
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No: Inbound freight can be a significant profit drain. SCM can help measure these costs and provide a clear picture of this potential leak and ways to reduce the impact to profits.
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9 Do you have strategic relationships with your Transportation Partners?
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YES: Great! The next step is understanding how you can leverage these relationships to add value to your organization. SCM can develop the strategic framework to enhance and leverage these relationships.
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No: Many leaders consider Transportation a basic transactional service. Most Transportation Partners can add significant value if you know how to effectively tap into these resources. SCM can help leverage these relationships and the benefit they can provide.
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DISTRIBUTION
10 Does your organization understand and manage Order Characteristics and their impact on freight expense?
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YES: Very impressive- Very few organizations have this level of expertise and control. SCM can help drive the improvement of order characteristics while reducing the impact on your freight expense.
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No: Not surprising- These concepts are challenging for most Supply Chain teams. SCM can help define and develop the baseline data as well as the strategic path to reduce costs and improved profits.
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11 Does you have a Freight Payment partner?
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YES: Perfect- many organizations do not see the benefit an advanced Freight Payment partner can have on bottom line profits. SCM can help enhance these relationships and drive additional benefits to the bottom line.
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No: This may be low hanging fruit for enhancing profits. SCM can accelerate this process by showing you the path to potential partners and rapid implementations.
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12 Does your Distribution network use a Performance Management technology?
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YES: Understanding the accuracy and source of this data provides the baseline for significant cost reductions, and may also point toward SKU cost/profit opportunities – SCM will help you read this crystal ball.
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No: There's value you may be missing. Even if this technology investment is not a priority, assessing the baseline cost of each major DC process allows for an accurate measure of productivity that can reduce costs. SCM will help establish the baseline and compare to best practices.
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SKU MANAGEMENT
13 Does your Distribution network use a Velocity Slotting?
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YES: Excellent! Have you deployed an enhancement by sorting individual and SKU groups to maximize pick efficiencies? SCM can evaluate your current process and recommend opportunities to further reduce costs.
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No: This is an opportunity to continuously improve your DC processes. Using basic velocity slotting can dramatically reduce pick cost and improve customer experience. SCM can develop and implement these improvements based on your goals.
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14 Do you track net impact of Customer Returns?
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YES: We have found that few organizations understand the value of tracking the net cost impact of Customer returns. This process can clearly define adjustments necessary to reduce costs and boost profits. SCM can outline how to implement this process and show measurable reductions in net impact of Customer returns.
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No: Customer returns are a common drain on profits and add costs to the Supply Chain network. Returns can't be avoided, however SCM can reveal techniques to better manage their impact on profits.
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​​15 Does your Organization have shared Profit Contribution and SKU Management incentive goals?
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YES: Very impressive. Most organizations do not understand the shared responsibility here. SCM can help evaluate how to maximize this investment and improve impact on bottom line profits.
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No: Incentive goals are easier than you think to implement and have significant ROI’s. SCM will help develop and implement this opportunity to expand your team's knowledge and add profit to your organization.
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16 Do you manage Margins differently for High and Low Velocity items?
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YES: Excellent- Most organizations don't study profit at the SKU/velocity level. SCM will partner with you maximize this valuable information and leverage it to improve profits.
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No: Understanding margin contribution by SKU velocity opens the door to very significant profit opportunities. SCM is experienced at helping organizations interpret this data and develop a profit enhancing execution strategy.
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SUPPLIER MANAGEMENT
17 Does your organization track Buying and Selling Profit separately?
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YES: Congratulations, you are in the top 10% of organizations. Interested in enhancing performance even further? Consider how you can use this information to drive additional profit growth. SCM can teach you proven techniques for boosting value?
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No: This can be a challenging step for organizations to undertake. However, the payoff is significant and sustainable: this information may paint a clear picture of opportunity on both sides of profit.
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18 Do you have Supplier Terms and Conditions established for Supply Chain?
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YES: Very good! How are these T&Cs being monitored and updated? Are you certain all relevant areas are clearly defined? SMC can provide a comprehensive review and suggestions for improvement that can unlock new approach to performance and profit.
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No: T&C policies represent a very basic means of establishing valuable ground rules with Suppliers. SCM can explain how to create and implement a T&C policy that maximizes value for your organization.
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19 Do you have a Supplier Compliance program?
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YES: This is a powerful tool. How is it oriented? Do you reward compliance, or punish compliance failures? How does your compliance program contribute to cost reduction? SCM is skilled at evaluating these programs and offering unique approaches that will enhance the success of these programs.
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No: Having a successful Supplier compliance program is rewarding, but it requires careful alignment throughout your organization. SCM has practical experience helping organizations establish compliance program frameworks, aligning organizational operations, and creating maximum value.
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20 Do you track Customer Profitability?
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YES: Most Supply Chain organizations do not participate in the evaluation of customer profit, despite the fact that much of the cost to service the customer is contained within the Supply Chain. SCM can help you develop a strategic ​view of Customer Profitability and the impact Dynamic pricing can have on the organization.
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No: This is a challenging area, however the benefits can be very impactful. SCM can help you understand where improvement can be made and how to develop a path forward, without a huge investment of resources.
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