Thursday, March 08, 2007

P Q and R

Eli Goldratt offers us the P & Q Example

I am working on the PQ & R Example. For distribution folks. On several occasions I have worked with distributors, one case was a home run... another was stuck in status quo. For me, working with a client, only to have them choose status quo over one my solutions for their unique requirements, is a failure. But I digress...

It is important to work out the P & Q example, on paper (show your work) to help analyze what is actually happening in the real world. Why do I say "real world?" Because constraints exist. Every business has one "weakest link" no matter how successful. At our Financial Analysis Workshop in June 2005, a number of participants were in distribution organizations, and were asking for an example (like P &Q) tailored to their issues.

It is coming.

As Spock would say, "I have started the calculations."

Some assumptions:

The setting is a health food distributor located in Columbia, South Carolina. The fairly modern facility is basically an air-conditioned warehouse, were shipments arrive and are broken down into skids for shipment to each retail outlet.

The client is toying with regional warehouses, to offset delays in the product arriving in time at the various retail locations. They bought a truck and hired two drivers to handle both incoming and out-going transfers of goods. In fact, by going to a seven-day per week trucking schedule, sales have improved noticeably.

More to come... and if you have your own unique twists you wish to have incorporated in this exercise, please let me know.

Jeff 'SKI' Kinsey, Jonah

P.S. As you may have quickly noticed, there will be more "moving parts" than the P & Q example.

(c)Copyright 2007, Jeff 'SKI' Kinsey.
All rights reserved.

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