Thursday
Dec102009
Just Order what You Need
Thursday, December 10, 2009 at 5:38AM
We were putting up the holiday lights on the bushes along our front walk. We were sorting through strings checking to see which worked. I was, as usual, curious, had lights that worked perfectly last year failed to work this year simply because they stored in a box for 11 months? It probably had something to do with the coiling and uncoiling process… or rather the coiling and untangling process.
I suggested to my wife that we consider converting to LED lights. Everything I have read about LED lights indicates that they last longer and use less electricity. It seems like in the next few years there will be a wholesale conversion from incandescent and florescent to LED. Holiday LED lights are already available. They are currently priced at a premium but I anticipate the price will drop as sales increase.
So, I suggested “Let’s wait until after Christmas and buy some sets of LED lights at deep discount for next year.” I thought my idea was brilliant. My wife responded, “I don’t know. Last year there was nothing left. If the stores have ordered just what they need this year, there won’t be anything left after the holidays.”
Dang! Stores ordering just what they need! No more. No less. If they simply ordered what they will sell, the holidays would come and go, and stores would have sold out of everything. They would then be able to move on to Super Bowl and Valentine’s Day related goods. They would be well served ordering just what they need of these goods as well. Simple, Easy, Exactly the right thing to do.
I was talking to my good friend Jim. He is tasked with inventory management (i.e. inventory reduction) for a large global consumer products company. Jim was telling me there were lots of efforts on production planning and new reports in their ERP to assist their efforts to reduce inventories. I told him of the above conversation with my wife and suggested that he simply take her advice and buy or make exactly what they will sell. We had a real good laugh.
I know very well that my wife’s comment was made innocently with the best of intentions. Yet, as I reflected in amusement on this, I realized that this is a widely held belief even in business. I have sat in business reviews where senior executives basically said the same thing. We constantly challenged to order what we will sell. What could be more simple and clear? And if it is unclear to the group what that sales figure will be, they will simply tell us what the numbers are.
Let us not forget, that we are still trying to predict the future. As easy as it maybe to say, the future does not comply with our best wishes and intentions. I worked for a wonderful leader, Howard Heckes, who always loved to invoke the old adage: Hope is not a plan. Hope is neither the foundation for a good forecast.
This topic has been covered in some of our other blog postings and no doubt will be again. In the meantime, I sincerely hope everyone just orders what they need.
I suggested to my wife that we consider converting to LED lights. Everything I have read about LED lights indicates that they last longer and use less electricity. It seems like in the next few years there will be a wholesale conversion from incandescent and florescent to LED. Holiday LED lights are already available. They are currently priced at a premium but I anticipate the price will drop as sales increase.
So, I suggested “Let’s wait until after Christmas and buy some sets of LED lights at deep discount for next year.” I thought my idea was brilliant. My wife responded, “I don’t know. Last year there was nothing left. If the stores have ordered just what they need this year, there won’t be anything left after the holidays.”
Dang! Stores ordering just what they need! No more. No less. If they simply ordered what they will sell, the holidays would come and go, and stores would have sold out of everything. They would then be able to move on to Super Bowl and Valentine’s Day related goods. They would be well served ordering just what they need of these goods as well. Simple, Easy, Exactly the right thing to do.
I was talking to my good friend Jim. He is tasked with inventory management (i.e. inventory reduction) for a large global consumer products company. Jim was telling me there were lots of efforts on production planning and new reports in their ERP to assist their efforts to reduce inventories. I told him of the above conversation with my wife and suggested that he simply take her advice and buy or make exactly what they will sell. We had a real good laugh.
I know very well that my wife’s comment was made innocently with the best of intentions. Yet, as I reflected in amusement on this, I realized that this is a widely held belief even in business. I have sat in business reviews where senior executives basically said the same thing. We constantly challenged to order what we will sell. What could be more simple and clear? And if it is unclear to the group what that sales figure will be, they will simply tell us what the numbers are.
Let us not forget, that we are still trying to predict the future. As easy as it maybe to say, the future does not comply with our best wishes and intentions. I worked for a wonderful leader, Howard Heckes, who always loved to invoke the old adage: Hope is not a plan. Hope is neither the foundation for a good forecast.
This topic has been covered in some of our other blog postings and no doubt will be again. In the meantime, I sincerely hope everyone just orders what they need.
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