The Issues with Women
Essay Preview: The Issues with Women
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First of all, this book doesnt give the pleasure of good reading. Cmon, what kind of pleasure do you expect from a 500 pages book with very small fonts?
I would like to review on pages 183-189 regarding case at Kanthal. It said that according to ABC calculation, Kanthal has found that customer #199 records loss, unfortunately customer #199 is in the top three in terms of sales volume. If ABC is really a good tool, then Kanthal should fire customer #199. But Kanthal didnt do that. They dont believe in ABC?
Customer #199 implemented JIT and theyve got substantial improvement in productivity and efficiency. With JIT concept they place order to Kanthal in small quantity and frequent orders. According to ABC, this makes the cost for Order-to-cash activities at Kanthal is quite high, so that it eats the margin.
The funny thing, the book said JIT is appropriate in Japan, not in Sweden. Dont they look at automotive industry around the world that successfully implement JIT?
So whats the solution described in the book? The solution is to cut the cost of order-to-cash activities by using electronic B2B concept. And it claims that customer #199 turns to be profitable for Kanthal after that. So simple andso wrong!
Maybe ABC calculation shows that result is good at Customer #199 level. But still, the company bottom line remains the same. Do they cut sales persons salary? No. Do they fire a sales person who handle customer #199? No. Do they reduce transportation cost? No.
Probably by using B2B, theres small fraction of cost saving on order processing activities, but it wont be significant enough to increase the net profit for the company.
If B2B does reduce the cost of order processing cost significantly, why they dont use it for all customers?