Friday, October 29, 2010

Office Renovation

For a lot of people who've seen our Metro Manila office, one thing obvious was that it was very crowded.  That impression is amplified on those mid-morning hours when everyone was there -- on those times, it was a market place. (Not on those times, it was just an internet cafe.)

Over the past week, however, it's been desert empty, save for the workers and the dust.  We're finally on our scheduled major office renovation!  We're expecting the project to finish in a couple of weeks or so.  In the mean time, we've moved half of us to the obliging service department next door, and the other half to the training room of our sister company Thermovar Pipes.

Moving and subdividing our office to nearby locations is not without challenges.  We had to minimize phone, fax, computer and network downtime as we reshaped our infrastructure for our ad hoc relocation.  Fortunately, with just a little shuffling, network cabling wasn't too hard; we were able to reuse most of our network cables.  Sales executive Alexis Garcia, our resident telecom expert by night, managed the rewiring of our phone and fax system to working order.

This project is a major makeover that's long overdue.  There's been so many changes over the years that has stretched our office capacity to its limits.  With this over, we expect to maximize space in our humble office and to increase overall efficiency in our operations.

Monday, October 18, 2010

Walk-In and Phone-Order Sales

Early this year, we started diligently classifying sales whether they're sales booked by agent, ordered through phone, or walk-in sales.  We have a lot more sale types like "project" and "key" but we haven't yet discussed the "proper" classification of sales.

I primarily requested due diligence in proper sales classification to measurably monitor an aspect of customer satisfaction.  Since we have stocks at two different locations -- our in-store "walk-in"cache of popular goods and our 15-to-20-minute-away warehouse, I wanted to know how often do we make our walk-in customers wait a long time for their orders to arrive.

How do we know if a sale should be a walk-in sale?  The question seems simple enough.  But there are some aspects that need clarification.  An unannounced customer literally walking-in on our store is obviously a walk-in sale.  But what do we do about customers we got to talk on the phone or email?  For these "announced" customers, if their order is vague or unclear during previous dialog, we still categorize them as walk-in sales.  But if their order is known before their arrival, we consider that as phone-order booking.

It is still a question if we should even segregate walk-in sales from phone-order bookings.  Phone-order bookings have a propensity to be changed upon customer arrival.  Based on our records, phone-order bookings and walk-in sales constitute less than 2% of our sales.  That is still substantial however, and surprising for our humble office with hardly space to accommodate waiting customers.

Tuesday, October 5, 2010

15-Minute Warehouse Logistics

Within the last five years, our company has enjoyed excellent growth.  A lot of our growth can be attributed to expanded market as well as a more national presence in the Philippines.  This growth however also meant an inventory level our humble office could not quite adequately handle. 

Over the last few years, we've tried several setups to balance operational efficiency and customer service.  We still maintain our sales and administrative office here in Mayon.  But we've gone through several warehouses and process changes along the way.

At first, we only just had most of the bulky items moved to our main warehouse.  We still have a lot of items in our smaller stockroom here.  In our computer system, we maintained two separate inventory levels for both facilities.  Unfortunately, this system made physical inventory counting difficult.  Worse, a lot of our transactions require stocks from both facilities.  This made fixing the paperworks difficult and needlessly complex.

So we decided to setup our one true warehouse.  Everything should come out from there.   This way, we only maintained inventory level in one facility.  All our transactions would be under one facility.  It sounded simple and mechanic.  But one constant reaction we got was the dissatisfied look from our walk-in customers as they waited for items from our 15-minute away warehouse.  Walk-in sales is not big percentage-wise, but each one interacts with our office people more closely than most agent and call-in bookings.

Last year, we changed things a bit to improve our response time and hopefully our customer service.  It's actually much more complicated, but that's what you get when you try to put more intelligence into the system.  We would now maintain two facilities again: our Main warehouse and our Walk-in "warehouse".  Our Walk-in warehouse should be a very small representation of the top 30 SKUs most ordered by Walk-in/Pickup clients.  For each SKU, there would be only 1 unit, except for a couple of SKUs people order by 3s or 4s.  Every week, we refresh this lineup to refill the blanks.  Ideally, the Walk-in items are visually countable in just a couple of seconds.  We're not there yet, however, due to space reasons.  Our main warehouse contains the rest of our inventory.  This system requires that we differentiate walk-in and pick-up sales from booked sales.  All booked sales should get their items from the Main warehouse.  For any one sale transaction, items should only come from one facility.

We made another optimization soon after that.  We moved small items and spare parts back to our diminutive Mayon office.  Now that almost sounded like we went back to square one.  The difference was that we did not add another facility.  We still only have Main and Walk-In.  Only this time, we partitioned Main to Warehouse and Mayon.  Any one SKU under Main will either be in Warehouse or Mayon, but not both.  Our pick list now denotes the location of the SKU under the Main warehouse. 

This current setup improves on our customer response time.  It also helps our Service department because spare parts are now closer at hand.  Due to space reasons, counting is still a challenge.  But the enforcement of only one location per SKU diminishes this problem somewhat.

Over time, as we continue to optimize our processes, there will be more changes to improve how we can serve our customers better.