The way we have always done it, was the root of an issue in which one client failed to see that their business had outgrown its original customers. A manufacture of a liquid food ingredient that once sold small quantities to customers in 50 gallon drums, had now grown to a large national supplier delivering in tank trucks.
A company executive identified a problem with low margins and production constraints.
In the problem indentation stage, it became evident that the issues penetrated much deeper into the structure of the way the company was conducting business and how to service key original customers. Physical space use and handling of these cumbersome delivery vessels decreased critical manufacturing space, delayed larger bulk deliveries and distracted warehouse personnel. Financially it increased labor, insurance and administrative costs.
Re-framing the question of “How do we better service these customers?” to “Why are we servicing these customers?” provided the space to work on fresh solutions.
Solution:
Together we developed a plan. A strategic relationship was developed with a distributor that would be given discounts enabling them to service existing “drum” customers. Customers experienced improved service levels without any increased cost, while the client improved net margins by more than 15%