• Connecticut: 203-315-2123

Companies that produce products directly for consumers exhibit some unique characteristics 

that block them from providing the superb service that would insure increased sales.  

These characteristics exist both in companies that service consumers directly and through 

distribution systems. The fundamental problem is that in the name of production efficiency they have decoupled production and distribution from consumer demand. Unfortunately, the end result is lower service levels, higher inventories and a failure to achieve the expected production efficiencies.

Their goal is usually very clear - meet consumer demand in a cost efficient manner. There are two factors that block the achievement of this objective.

1. The disconnecting of actual consumer demand from  production and distribution decisions. Instead of providing information on actual consumer purchases we drive these activities based on a forecast of expected consumer purchases.

2. The assumption that products should be produced and distributed in batches of material that are perceived to be cost efficient.

In companies where the production of component parts is separated from the assembly of finished products the negative impact of these two factors is further magnified. As a result we end up with systems that are even further removed from consumer demand and where local cost measurements are even more dominant.

The solution is obviously to more directly connect consumer purchases to a company’s production-distribution system in a fashion that increases the availability while lowering inventories and the costs of the production–distribution system. Making this transition requires two major changes in how companies think about managing their businesses.

First, they need near real time information on what consumers are purchasing (in the retail world, it’s what was scanned today).

Second is the need to abandon the obsolete cost world measurements that currently drive the activities of most production-distribution systems. These measurements and the associated mindsets result in a micromanagement of the various production-distribution steps rather than a holistic management of the business.

We have had spectacular successes in helping companies implement such a solution. Please feel free to contact one of our partners in either the Illinois or Connecticut offices for more information on how your company could benefit from these changes.

PRODUCING TO CUSTOMER ORDERS

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