Cut-off times -- what does that mean? In the simplest form it means the last moment you can place an order and sill receive the product on the next delivery.

Three years ago we looked at the impact of enforced cut-off times. For smaller distributors not having cut-off times can be a wedge against the big guys.  For larger distributors an enforced cut-off time can improve efficiency.  Food distributors can go either way so let’s look at the up and downs and how to better manage unenforced cut-off times.

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You're Cut Off

To have or not to have a cut off time. Let’s look at the impact of both on a distributor.

No cut off time: Impact
Impression of better service. Good
Handwritten orders/pick tickets Bad
Warehouse clamor Bad
Chasing customers for clarification Bad
Increase revenue Good
Increased employee pressure Bad

 

Cut off times: Impact
Impression of lower quality service Bad
Can leverage automation Good
Increased order accuracy Good
Trucks out on time Good
Strain on employees lessened Good

The quality of service argument stems from competition between the US Foods and Sysco’s of the world and smaller distributors.  Larger distributors require cutoffs to sustain their business model at the volume they maintain. Smaller distributors feel not enforcing cut-offs provides a competitive service advantage.

For the distributors and processors that provide this service advantage the ability to get those orders out at such short notice comes at a great cost.  In many calls to automate warehouses we’ve seen the chaos no cut-off’s can have on picking and warehouse operations.

How do you compensate for having late cutoffs and run your operation at a profitable level?

A)Redistribute labor, create a remote order entry person to 'listen to the tape' at night and get the orders in for the next day.

B) Utilize technology for service automation. Properly implemented automation will increase service quality.

C) Engage your salespeople to get the orders for the late guys by calling them and put the orders in remotely.

D) Create call lists that inside salespeople can use to get orders in ahead of time.

Of all these factors A. is the one that needs to be addressed.  Wrong deliveries and run-backs tax your profitability. Use alternate labor to replace the handwritten morning fire drill that represents your late cutoffs.

 

Issue 646 - Checking those Resolutions.

Last year we were early to declare our New Years Resolutions 2018. A lot has changed over in 2018, but I believe it's not quite too late to make sure we have addressed some of those resolutions.

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