Situation:
A furniture importer and wholesaler was experiencing difficulties with its operations and achieving further growth. This business had a good core with skilled and knowledgeable management, but the director was becoming increasingly frustrated with not seeing the fruits of labour.
The company imported their own brand baby and toddler nursery furniture which was designed by the company and manufactured in China. The brand was sold through major retail outlets specialising in baby goods and whilst they had a good reputation and name in the market, they had reached production capacity and consequently sales were not increasing. It is at this point that they approached and engaged the dVT Group.
Actions:
Our early stage reviews indicated that there were poor controls over resources which included the Managing Director jumping on the forklift and loading and unloading stock in the warehouse. This did manage to help fill short term staffing requirements and the MD was a good forklift operator, however he added far more value to the organisation when he was focused on running and growing the business. The company implemented our recommendations on employing appropriately skilled staff in the warehouse and making sure the MD stayed in the office, doing what he did best, designing new ranges and negotiating with customers. Monthly reporting and costings were also improved as a result of employing a bookkeeper and allowing other staff to be free to focus on what they did best. Adjusting staff roles is a delicate task and can be a difficult time if not handled appropriately. In this case, most staff supported the changes, and those few that felt threatened or were unsupportive were moved on.
The operational review also identified bottlenecks being caused by the physical layout of the site and once this was highlighted the organisation moved to a larger and more appropriate location. This allowed business process reengineering to create a far more efficient, easier and quicker stock management process resulting in quicker and more reliable time frames for delivery of stock which had additional benefits of improved customer relationships.
KPIs were introduced for employees and also for customers and suppliers. Together with streamlined monthly board reports, this enabled the company to identify areas of strengths and weaknesses to ensure profitability and growth.
Outcomes:
The company has continued to improve performance, generating the desired growth. They have now branched out further into their own range of associated goods within the baby goods industry. This growth has also lead to the construction of a larger custom designed warehouse to cater for the company’s specific needs for inventory management and has enhanced further the operational gains derived from the dVT Group Operational Review.
