Tuesday, May 22, 2007

happy monday

today was a good day - i started off this week on a good foot literally as i actually went for a run tonight. unfortunately about 10 mins into the run, a rainshower blew in but i still finished my run - i just looked like a sad wet dog when i was done. i haven't run in the rain for a long time but it felt really nice to do so!

remember a couple of posts back where i talked about making some stickers with your journaling stamps? here is the LO i used mine on:

a perfect splash of color for this LO to commemorate noah's first steps for me!

so a couple of weeks ago, i was talking about the importance of supply chain and i have a bit of time tonight to chat a little bit about it as it is a vast topic.

i was at IKEA a couple of weeks ago with some of the MR design team gals and we were just looking at all the great stuff you could do with like 371 sq ft of living space (and you start to think hey my family of 3 could live somewhere like that - LOL) anyhow i am getting off subject.

they had this piece of furniture - i think it was a book case or something and they were advertisting that they could lower the price to the consumer b/c they had found a way to have the pieces fit together so that the book case took up only half the space it needed to in order to be shipped here so they could pass the savings onto the consumer. half the space might not seem like that big a deal but it is!

think of it this way, let's say that ikea could only fit 100 (i am just picking a nice round number here) of these bookcases in a container before. so they have the 1 container that cost them say $1000 to ship and all the time, labor and money costs for the paperwork to get here. then they have to truck the 100 bookcases in the container to a store and warehouse the 100 bookcases. each of these steps cost money. NOW, with the redesign so that the bookcase can be packed flatter, they can fit 200 bookcases per container. THINK of how many steps in the process they have cut their costs on!

here is a scenario - say they used to have to ship 50 of these containers out, now it is only 25! they only have to do paperwork for 25! they only have to have half the storage and warehouse space for it. it is brillant! think of the costs they saved on that they can pass onto the consumer!

and in ways, this is sort of how we are running MR. we aren't making things flatter but you can bet your darnest we try to pack the container as full as we can. and to help us accomplish this, we often times will have a couple of dozen of our products in the container at a time.

here is the thing that we are always challenged with "net replenishment lead time". by definition, this is the amount of time that is needed to "refill" something once you place your order for that item. so say we figure that we need some of our 4" binders (as those are pretty popular lately) - and side note, the definition of "need" is challenging too and something i will discuss later as i talk about safety stocks, etc in a future entry. anyhow, i say we need to order 4" binders. well if you add up the time it takes for the factory to make it, package it, and get it on the container and it is shipped, through customs and in our w/h, we are talking about 8- 12 week cycles here.

then you need to take into account the other item we are trying to reorder at the same time to get on the container to get shipped here b/c we want to be like ikea and keep our costs down. but deb does a great job on it. she handles all of that. i just push the easy button (LOL).

that is one of the challenges. i don't think some people without an intimate knowledge of supply chain understand that. they just get mad that things aren't in stock. my philosophy is if we ALWAYS have everything in stock, we have too much inventory. that is a lot of cost to be carrying all the time in terms of stock.

so in this way we want to be like ikea b/c it helps us keep our cost down (Even though we don't have the ikea scale of volume on our side).

hope you all have a great week!


At 5/22/2007 01:43:00 AM, Blogger julieO. said...

Wow! That does sound hard to balance out. Sure glad you have the face of sweet littl' boy to stare into at the end of the day! I had to post because i LOVE that LO!! Those precious, chubby feet are so sweet!

At 5/23/2007 11:23:00 AM, Blogger ~Sasha Farina~ said...

love that layout!!! you're giving me tons of ideas how to use mine!


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