Building a Better Business Case and ROI

Understanding Why People Buy Things or Ideas

Virtually every business you contact has this question in their mind; why should I buy from you? To truly maximize your revenues you need give people a reason to buy from you versus a competitor. Here are a few strategies that will help you differentiate yourself from your competition keeping in mind your “competitor” may be an alternate project at your facility.

First, it's important to understand that people make their buying decision on two levels: logical and emotional. The logical aspect revolves around the product or service and includes such things as product specifications, warranty, price, color, size, ease of use, etc. Anything directly associated with the product is a logical need. The second buying motivator and, perhaps the most powerful, is the emotional aspect of the sale. These criteria are the less tangible needs and include feelings of success, relief, pride, joy, fear and concern. For example, a person buying a pair of jeans will have specific logical needs such as waist size, inseam length, color and style. But, ultimately, the emotional aspect of how they fit and look will influence that person's buying decision.

To uncover your customers emotional buying requirement learn to ask, "What are you looking for in a...?" followed by "Why is that important to you?" The first question helps you learn the logical need while the second question will help the customer express the emotional reasons behind their purchase. Invest the time accurately and thoroughly learning your customer's need and wants. This will help you to begin differentiating yourself from your competitor.

The next step is to give a presentation that focuses on the customer's needs. Rather than discuss everything about your product or service, focus first on what the customer identified as being important. This demonstrates that you listened to what they said and will help you separate yourself more effectively.

People also make buying decisions based on their overall experience in your store or place of business. Here are just three influencing factors:

1. Ease of business. Are you easy to do business with or do I, as a customer, have to jump through hoops to return something? Are you well staffed or do you reduce your costs by scheduling a skeleton staff at any given time?
   
   
2. Staff accessibility and attitude. Is your team friendly and well trained in customer services procedures? Do they exhibit the mentality that the customer is important and comes first or do they spend their time gossiping and gabbing? Do they eagerly approach the customer or do they wait for customers to come up to them first. I recently bought an aquarium and although the staff was knowledgeable they made me feel like I was intruding on their time.
   
   
3. Product selection and availability. Do you have a good supply chain management or order fulfillment process in place. Prior to buying my aquarium I placed my order at one store and at the time of writing this article almost six weeks later I still haven't been advised that my tank has arrived. And this was a stock order!
   
   

Lastly, equip your team with the tools they need to properly do their job. Take advantage of the product training most manufacturers provide, invest in the on-going development of your people, and help them succeed. I've worked with companies who invest a great deal in their employees and others who spend a bare minimum. The difference in their overall results is always significant.

Today's business environment is more challenging and competitive than ever before which means you need to give people a clear reason to do business with you [or carry forward with your project] rather than someone else.

You Do That? - Overhead Chain Conveyors

Solving Conveying Challenges
Many times we are conditioned to look ahead or beneath us when we are planning a manufacturing or distribution center project. Depending on your facility, an overhead conveyor may be another option you should consider. An automated conveyor system not only increases productivity and turn-around time on orders, but ensures a greater level of safety for employees, and thus, a more predictable work flow.

Unibilt enclosed track systems from Jervis B Webb range from simple material movers to sophisticated, computer-controlled material tracking positioning and material management systems. Regardless of size or scope, these easily installed conveyors provide numerous advantages including:

Design Flexibility - Use of universal link chain makes shorter radius curves and closer spacing of curve tangents possible, accommodating even the tightest of spaces.

Improved Work Environments - Our track design helps prevent external contamination from reaching the chain or track bearing surfaces. Inverted systems also help to confine dust, grease, and other potential contaminants below the load on the carrier, helping to keep both your workplace and product clean.

Modular Construction - Webb's patented nested end yoke track connections increase ease of installation and help minimize downtime in the event of layout modification.

Whether your facility is currently using an overhead chain conveyor system or not, a Morrison Company representative can conduct a facility assessment, many times with one of our Engineering team members, and develop options that add to or configure a new conveyor system adding efficiency and safety to your operation.

Safety Best Practices

Warehouse Safety: It’s no Accident
Where most warehouse visitors simply see shelves, pallets, and boxes, a safety manager sees danger. It's not that your safety manager is easily frightened or overly cautious. They see danger because it is a key part of their job.

"I constantly analyze accidents," Brock says. "I study them, search for causes, and try to find ways to prevent them." Dixie Brock is Safety Manager for APL Logistics in Oakland, CA.

Adding Insult to Injury

Warehouse mishaps tend to be less severe than most manufacturing- and transportation-related accidents. Yet a series of relatively minor incidents can still seriously injure employees and lead to lost productivity, higher insurance bills, and government fines.

"The primary injuries occurring in a warehouse stem from lifting, straining, and turning," says Joel Anderson, president and CEO of the International Warehouse Logistics Association, a non-profit organization based in Des Plaines, Ill., that represents more than 500 third-party warehouse and logistics service providers.

Similarly, APL Logistics reports these top three injury categories at its warehouses:

1. Slips, trips, and falls.
   
   
2. Ergonomic-related pains such as lifting, reaching, pulling, and pushing.
   
   
3. Material handling incidents such as dropped boxes and forklift accidents.
   
   

Creating a Safety Culture

Creating a safe warehouse does not happen by accident, it happens by planning to prevent accidents. Although forming a safety committee is a good first step toward building better worker safety practices, warehouse operators also need to work toward creating a "safety culture" inside their facilities.

"Warehouse managers are accountable for safety. They need to be aware of that, and lead by example," says Sierra. "All company employees should feel that safety is their responsibility - that is part of building a safety culture."

"Maintaining an efficient safety culture is a continuous effort," Bob Shannessey agrees. Bob is the President of the Warehousing Education and Research Council (WERC)". Safety is not a one-time deal; companies cannot accomplish a culture of safety with one or two yearly meetings. But emphasizing safety throughout the company has a positive influence on its success."

Unfortunately, the benefits derived from safety training and practices are hard to directly quantify. As a result, many companies work to meet only basic government requirements. But such shortsighted thinking can burn companies over the long haul.

"Because safety efforts are not direct activities that generate profit, people tend to forget them," says Shaunnessey. "But ultimately, having a safe workplace puts companies in a position to be more profitable."

Safety Savings

An emphasis on safety can generate cost savings -- both direct and indirect. Warehouse operators who take the time to analyze their safety training and practices can reap financial benefits, says Patrick Floyd, senior executive vice president of operations for Total Logistic Control (TLC), a third-party logistics provider headquartered in Zeeland, Mich.

TLC, which operates 83 distribution centers nationwide, implemented a comprehensive safety plan that generated fast and measurable results.

"TLC reduced its recordable incident rate from 11.5 in 2000 to 3.63 in 2006," notes Floyd. "This helped reduce workers' compensation costs from $2.53 per man-hour to 30 cents per man-hour."

Morrison Company has conducted facility assessments for all types of logistics firms. Identifying safety and handling efficiencies should be part of your near term profit building strategy.

Continuous Improvement Best Practices

In Times of Adversity - Don’t Abandon Basics

Today, manufacturers face threats in a variety of forms, most of which they can't control: Chinese currency manipulation, rising raw material costs, diminishing consumer confidence.

Nonetheless, now is not the time to forget about process improvement. In fact, now is the time to right the ship so that when the storm calms, you have a clear path and can forge on full speed ahead.

That said, let's review the basics of process improvement.

Process improvement should follow a continuous path that is carefully pursued while watching the customer. In manufacturing it is designed to overcome the Seven Wastes of Manufacturing, identified by Toyota's Chief Engineer Taiichi Ohno. Ohno's crucial insight on waste and its elimination led to the core of TPS that has helped Toyota to become the most efficient automobile.

Ohno recognized that, in manufacturing, there is a need to overcome:

1. Overproduction (before an item is required).
   
   
2. Waiting (or in-process bottlenecks).
   
   
3. Transportation (of products).
   
   
4. Over-processing (products).
   
   
5. Defects.
   
   
6. Excessive inventory.
   
   
7. Excessive movements (of products).
   
   

His solutions to these wastes included:

1. The invention of just-in-time delivery and production systems.
   
   
2. The linking of processes so that products would feed immediately from initial processes into subsequent processes.
   
   
3. The elimination of excessive movement through the previously mentioned linking of processes.
   
   
4. The establishment of a system of process improvements.
   
   
5. The formation of quality circles that evolved into the concept of total quality management.
   
   
6. The concept of just-in-time delivery and kanban systems with suppliers and customers.
   
   
7. Additional process improvements.
   
   

Addressing these seven wastes in any manufacturing facility has to begin with a critical assessment of key processes, and improvements that can be made to each, while considering how the key processes can be effectively integrated with each other for the greatest efficiency.

But, for continuous improvement, that's just the start.

Subsequently, the continuous improvement process incorporates increased value in vital processes, and distributes that added value to all processes throughout the manufacturing facility.

However, such continuity in process improvement often is a challenge in the face of the proverbial alligator-filled swamp. Shortages of raw materials, manpower or transportation, rising costs of energy or parts, unplanned machinery downtime, competition from foreign competitors and rushed, new demands from customers who face their own swamps present crises that defy even the most dedicated lean manufacturers.

Keeping Ohno in mind, though, can provide comfort during times of such adversity.

He developed his simple and elegant assessment of manufacturing's basic problems and his solutions to them when Toyota was a fledgling company, constantly on the verge of bankruptcy and harassed by what were then the Big 3.

And, the argument that such practices are either easier to adopt or more necessary for a smaller operation, which Toyota was at that time, plainly doesn't hold water. Returns from lean manufacturing and continuous improvements multiply accordingly with the size of the facility.