Cost of Over and Under Stocking

In a manufacturing or retail environment, having too much inventory of products your customers don’t want and/or too little inventory on hand of what products your customers do want will cost you money and, consequently, profit.  Many service businesses also have inventory even if it is items like stationary incidental to their main operation.  This article  shows you why under and over stocking costs and how to reduce the damage.

SM4.1 Eight Types of Waste

The well-known Toyota car company identified seven types of waste that had an impact on Productivity and Profit.  An eighth has been added more recently.  By gradually reducing these wastes, you can improve the Productivity and Profit of your business.  In Japanese, this is referred to as reducing “muda” (pronounced Moo-da).  This article discusses how these types of waste might show up in your business; and what to do about them.  Waste reduction is an ongoing and probably never ending process.  This article gives lots of examples of waste in each of the categories.   To be most effective, you should tackle the largest waste items first so as to make the largest gains first. Waste reduction is a team effort ideally as those on the front-line probably already know what is wasteful; they are just not empowered and trained to combat waste.

Read this if: you are working on making your business operate more efficiently

Relates to: 80/20 Rule for finding the biggest issues, Kaizen for incremental improvement, Constraints and bottlenecks.  Our Profit Acceleration optimization toolkits; Double Profit in 100 Days and Double Growth and Profit in 365 Days.

Audio/visual Materials: none

Degree of Difficulty: Yellow (entry level) .  Not hard to do but requires perseverance.  It is the first article in a series on managing waste to improve your profit

SM5.2 Benefit from Theory of Constraints in Retail

The Theory of Constraints (TOC) argues that good growth can be achieved by focusing on the one or two limiting factors or “Constraints” in a production system. This article applies TOC to the Wholesale/Retail sector.

My Business’s Problem Symptoms: I Don’t Know What’s Wrong

I DON’T KNOW What’s Wrong! Are you faced with a confusing number of reasons why your business is experiencing a particular problem/s? It can be a challenge to drill down and identify the ‘real’ problem and see solutions. With YOUR problem in mind, select the link below that best fits your problem. Note: Campaign, Skills […]

Dice Games Simulate Profit Game

READY TO PLAY A GAME? SIMULATE YOUR PROFIT GAINS. Throughout 12Faces we talk about several different Workflow and Inventory Models. The Simulation Dice Game will quickly give you an impression of HOW these models work in practice. Think that YOUR business doesn’t have a Production Line? That this doesn’t apply to YOUR business? Restaurant – raw […]

How Dice Games Simulate Profit Generation

Throughout the 12Faces, we talk about several different workflow and inventory models and their respective merits.  You can quickly gain an impression of how these models work in practice by playing a simulation game with a set of dice.  This will demonstrate the relative strengths and weaknesses of the various models and their impact on your profit.  Blue Belt

SM5.3 TOC to Optimise Your Sales Funnel

Rapid Optimisation of Your Sales Funnel to Improve Profit

The Sales Funnel is a well-known method of describing the several layers that a possible customer needs to pass through en route to becoming a customer.  Each layer contributes more information about your business to the potential customer to encourage them to purchase.  The Theory of Constraints (TOC) is an optimising technique that can show you the very first place you should look at in your Sales Funnel for maximum increase in sales and ultimately profit yellow belt


SM2.11 80/20 Inventory Management

If inventory is something you have to manage in your business, the The Amazing 80/20 Rule Tool can have a powerful impact on Profit and Cashflow.

This is a Yellow Belt article.

Importance of Small Batches Tool

There are merits to reducing the size of the batches you manufacture and/or hold in stock at any point in time.  This might sound counter-intuitive because of the oft-quoted ‘economies of scale’ and the time cost of pulling down tool set-ups and changing them to manufacture another project.  But, in the words of the song; “it ain’t necessarily so!” Learn the importance of small batches.

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