Just three numbers…
Well, kind of
As we’ve explored in the last few issues, there are a lot of numbers that matter – some more than others. But there are a few that just can’t be ignored … And to not pay attention to them is, at worst, to operate at your peril and at the least, to risk falling short of achieving your key goals. With that in mind, here are those suggested key numbers.
First, the core driver of your business are sales to existing customers – especially your top ten. So, not surprisingly then, the number one number to watch are those customer’s purchases month by month. In addition, since orders drive that process, we need to know how many of those orders ought to be placed, the size of them, the number of products on them and the timing of when they’re due to be placed. Armed with that day-to-day knowledge, we’re unlikely to be blindsided by a sales shortfall without understanding exactly why.
Next up, new business sales are (or should be) the primary driver of our businesses’ growth. So, we need to know how many should be in the hopper to support that growth. We must also know the sales stage of each, the likely date for closing them and the reasonably achievable sales dollar value of each.
Finally, as the saying goes, “No sale is complete until the bill is paid”. Therefore, we must know the value and status of every open invoice. That also means knowing the cumulative dollar value of them by age i.e., under 30 days, 30-60 days and especially those over 60.
With apologies about the earlier promise to limit the number of numbers to watch, these three categories are about as few as we can afford to know and manage. But with them in our constant vision (and focus), the chances of success are markedly enhanced.
Do it again…
Pay more for it
When you think about it, rewashes and that linen sitting in the reclaim pile are pretty much kissing cousins. The difference between them can be slight in degree, but the impact of rewashes on operating costs can easily outstrip the cost of those reclaims.
High rewash rates are generally the symptom of inadequate wash formulas, or chemicals that are short of the task. Reclaims typically reflect soiling that’s beyond the norm and therefore fall outside what a good formula should be expected to handle and also normally result in a limited amount of work.
On the other hand, it’s not uncommon to see situations where a rewash formula is run every day. Given that sort of frequency, the impact on costs and efficiency can be significant. If that rewash rate hits say, 5%, the impact on the operation is akin to running every twentieth load twice. Moreover, since that rejected linen will typically consume twice the run time (and supplies) to return to service, think more like every ten formulas, or a 10% efficiency loss.
To be honest, in the case of reclaim washes, the cost of running one is pretty stiff – both in terms of time and supplies. But in all likelihood, even a troubled operation won’t run more than one reclaim load per week. That’s why we need to pay more attention to that rewash number – both in our own accounts, as well as those we’re targeting to sell.
Next up: Reducing rewashes on the cheap.
Copyright TMA/Chemnet 2017 VOL XVIII No.46