CEO's Blog

Tracking Performance in the Supply Chain

In business, we all strive to be highly efficient and productive, but how do we know if we are actually achieving these goals? We really can’t know – unless we employ comprehensive performance tracking processes.
Robert Coolidge President & CEO

      Robert Coolidge
      President & CEO

In distribution, we are measured on how quickly we can accurately deliver goods to the client. This can be tracked through the number of lines picked and packages shipped within a given timeframe. Data for warehouse performance tracking is typically gathered through computer monitoring and RF (radio frequency) guns, which are used to store electronic barcode information from packaging, labels and bin ID tags. With electronic tools, each core task in the warehouse – such as picking, labeling, packing and shipping – can be monitored in real time for speed and accuracy at both the department and individual employee level.

With this type of visibility, warehouse managers can easily identify specific areas and processes that need improvement as opposed to an educated guess, which could ultimately lead to ineffective changes. Managers can also use performance data to adjust scheduling and ensure staffing levels are sufficient at peak times.   All of this information can be used to maximize efficiency and control costs, while pinpointing top achievers and possible weak links.
Employee incentive programs and evaluations can also be driven off this analysis.  At Encompass, we use television monitors to post performance data for each task so employees know how they’re doing compared to co-workers.   This creates a competitive environment in which we reward those who exceed hourly goals in stocking, picking and packing each month.  Baseline goals are set based on historical data. It’s a great way to keep our team from getting complacent and provides a little friendly competition, while also helping to improve our operations.
No matter what role your business plays in the supply chain, it is essential to have clear visibility into the performance of all aspects of your operation.  Establish specific expectations and metrics to analyze execution and then plan enhancements. And you don’t need to pay an expensive consultant or earn an MBA to measure and improve your operation.  Local schools often provide process improvement training like lean Six Sigma, which can also be taken online. It’s well worth the investment, time and effort to educate your team on best practices to enhance your operations and track the outcome.

 

Winning People Over

Every new year gives us a fresh start and chance to make it better than the one before. Although the economy is finally showing signs of improvement, no business can afford to be complacent.

Robert Coolidge President & CEO

        Robert Coolidge
        President & CEO

In last month’s blog, I talked a lot about the importance of superior customer service. Recently, I re-read the always insightful book, How to Win Friends and Influence People by Dale Carnegie. The section “Win People to Your Way of Thinking” really resonated with me from a service communications perspective. Here are some particularly significant points:

· The only way to get the best of an argument is to avoid it.
· Show respect for the other person’s opinion. Never say, “you’re wrong.”
· If you are wrong, admit it quickly and emphatically.
· Begin in a friendly way.
· Get the other person saying, “yes, yes” immediately.
· Let the other person do a great deal of the talking.
· Let the other person feel that the idea is his or hers.
· Try honestly to see things from the other person’s point of view.
· Be sympathetic with the other person’s ideas and desires.
Think about these ideas the next time you’re in a difficult situation and trying to please a customer. It could mean the difference between that customer doing business with you again…or your competitor.
Encompass wishes everyone a very happy, healthy and prosperous 2013!

Going Above and Beyond

As we head into the new year, we remain optimistic that the economy will continue to improve for your business and for ours. However, we know that we can’t control market conditions, so at Encompass we continue to focus on what we can control — and that is “enhancing the customer experience.”

Robert Coolidge President & CEO

      Robert Coolidge
      President & CEO

You may have noticed that we recently added instant chat service on the encompassparts.com website so customers can get help fast without having to call our customer service department.  We have also expanded our call center to our Las Vegas distribution facility.  This gives our customers in the Eastern and Central time zones additional time to call in for assistance or place orders for same day shipping.

In addition, we have implemented a new warehouse monitoring system that helps our operations leadership track the performance of our warehouse team throughout the pick, pack and ship process. This helps us identify the areas that need improvement so we can quickly make adjustments to ensure our customers are getting the parts they need, when they need them. These are just a few of the enhancements we have made; look for more in 2013 because sitting idle is not an option for us.
In a challenging market, it is more critical than ever to continue to be creative and keep improving your value as a business, especially as it relates to serving your customer better than your competition. As you consider ways to grow your own business, think first what you can do to provide a first-class customer experience to keep your customers coming back and spreading the word on the great experience they may have had — from sending personal thank you notes after a job to checking on customer repairs to ensure everything is still working correctly.  Going above and
beyond is the best way to improve your word-of-mouth advertising, which in the age of social media can have an enormous impact to your business.
On behalf of all of us at Encompass, we wish you and your families a bright and joyous holiday season.

Five Strategies to a Highly-Effective RFP Response

When your organization is asked to respond to an RFP, the prospective client likely already believes you have the capabilities they need. But don’t blow this opportunity by assuming the sale and submitting a shoddy response.
Robert Coolidge President & CEO

      Robert Coolidge
      President & CEO

At Encompass, we are fortunate to have had the opportunity to participate in countless RFPs over the years.  I’ve seen virtually every format imaginable – from one to two basic pages in a Word document to sophisticated, automated tools.  In the end, we win some and lose some, but always view RFPs as a valuable learning opportunity.

A thoughtful, carefully crafted RFP response fully showcasing your organization’s capabilities and strengths can set you apart from the competition. If you’ve
made the short list to receive an RFP, here are five key strategies to creating a highly-effective response:

1.   Thoroughly Review the Client’s RFP Document – It may sound elementary, but before typing the first word, carefully read all of the client’s instructions and questions.  Most clients provide specific direction on how the response should be organized and answered.  Adhere to the requested format, and ensure all
questions are covered completely in your response – this is not the time to demonstrate your creativity by providing the client a response they didn’t ask for.

Many companies make the mistake of assuming they know what the client wants without taking the time to thoroughly read the proposal request. Submitting a
response that doesn’t follow the client’s outline or fully address their requirements will often be excluded from the next round of the RFP process simply
for not following instructions. If you have additional information you feel is essential to your response, include it as an appendix or attachment separate
from the main document.

2.  Brag on Your Company
– This is the perfect chance to sell your organization so don’t hold back. Consult with your internal subject matter experts to ensure you accurately capture the depth of your abilities for each of the client’s requirements – and do so with captivating detail.  At the same time, be wary of over promising and under delivering.  If you are awarded the business and can’t back up your claims of execution, you risk irreparable damage to your credibility – among many other issues (see #1 about thoroughly reviewing the client’s requirements).

 3.    Demonstrate Professionalism – Again, it may sound obvious, but before submitting your response, ensure your document is meticulously reviewed by someone other than the principle author for such basics as typos and grammatical errors.  Do not skip this step; even the best writers can miss mistakes after countless hours of preparation and reviewing.  Nothing conveys inadequacies and unprofessionalism like a document riddled with typos.  In addition, be sure to add a cover letter summarizing your competitive strengths as they specifically relate to the
client requirements.

 4.    Beat the Deadline – When possible, submit your response ahead of the stated deadline. This can help you outshine the competition by demonstrating your enthusiasm for the opportunity, depth of knowledge on the subject matter and ability to complete projects before they are due.  At the same time, be mindful not to rush through the response. It’s always better to meet the deadline with a complete and thoughtful response than to beat it with a careless one.

 5. Follow Up – Whether you win or lose, be gracious and thank the client for including your organization in the RFP process. If you are not awarded the business, ask why so you can obtain
critical feedback on your response. This input can help provide insight into how your organization’s capabilities may be lacking compared to the competition, as well as help you develop better quality RFPs in the future.
The RFP process can be cumbersome and time consuming, but can yield lucrative benefits. Even if your organization is not selected this time, you could leave a favorable impression for future bids and be first on the list for the next one. Also, keep in mind you could have a more immediate opportunity if the client’s project begins to falter.
Plus, people reviewing your RFP for one company may land at another where there is better opportunity.  Developing a high-quality, well thought out response is critical to your chances of winning – if not now, then maybe down the road.

2014 Initiatives

Last month I discussed starting the new year by sharing personal goals with your teams. If you haven’t done so already, now is the time to develop your business initiatives and plans for achievement in 2014. How do you plan to grow and improve your operations? What do you need to get there? Consider sharing your plans to improve service to customers and help further solidify your own relationships.
Robert Coolidge President & CEO

     Robert Coolidge
     President & CEO

At Encompass, we have a number of exciting initiatives implemented or planned in 2014 to enhance service and add value to your organization:

  • Expanding and upgrading warehouse operations at our Lawrenceville distribution center, improving overall efficiency by contracting with a facilities management firm to evaluate our
    warehouse workflows and implement additional processes to ensure we are consistently operating with maximum effectiveness.
  • Recently added a night shift to ensure all receipts are concluded same day for increased volume and to maintain our service level commitments.
  • Incorporated bar code receiving and advanced shipping notifications to help improve stock receipt accuracy and efficiency.
  • Augmented inventory levels across the board to improve our same day fill and to meet customer demand.
  • Negotiated new aggressive shipping rates with our national carriers to lower customer freight costs and improve delivery times.
  • Successfully expanded into the Major Appliance parts market with new additions such as Electrolux, Dacor and De’Longhi to complement our LG and Samsung lines, providing more “one-stop”
    sourcing.
  • Enhancing our mobile applications to enable partial part number searches and improve BOM lookup, providing more valuable tools in the field.
  • Extending hours of operation (8 a.m.-8 p.m. and weekend hours), improving delivery and personal customer assistance.
  • Improving the quality of packing to provide a more consistent and safe parts delivery experience.
  • Installing a new phone monitoring system to enhance the call center experience, as well as adding new personnel and developing advanced customer service training programs and performance
    metrics for frontline representatives.

Change is never easy, but it is the only way to keep the ball rolling successfully.  Just because it’s been done one way for 50 years doesn’t mean it’s the right way today.  Continue to be innovative with your change
and avoid complacency.

 The entire Encompass team is looking forward to raising the bar on our performance in 2014 and welcomes your feedback that may help us become a better partner to
you.
We wish you and your organization all the best success and prosperity!

 

Starting Off the New Year with Team Goal Sharing

Approaching a new year is always a great opportunity for both reflection and making a fresh start. Every year I make a list of things I would like to improve in myself. I then use this list as a reference to gauge my success as a person and reflect upon it over the new year. This year I have asked my leadership team to do the same so that we can all share our personal goals to improve our lives and become happier and more successful people/leaders/parents.
Robert Coolidge President & CEO

Robert Coolidge
       President & CEO

I encouraged the team to focus on personal goals rather than business; by identifying our own shortcomings and/or areas that we can improve upon, we can work toward making changes that can have a positive impact on others.  I truly believe that success is directly connected to surrounding yourself with good people. Some examples of personal goals include:

·     Exercising more frequently
·    Sleeping more than 5 hours
·    Being a better listener
·    Spending time with friends and family
·    Going outside more often to smell the flowers
·    Helping others more often even if it’s not reciprocated
·    Practicing smiling – it can alleviate pain
·    Taking time for a new hobby
·    Practicing gratitude
Consider holding a goal sharing exercise with your own teams. It could help build camaraderie, while providing a forum to exchange ideas on making meaningful, life-impacting improvements.
Best wishes for much happiness and success in 2014!

 

Reflections on NPSC 2013

Last week, several colleagues and I attended the annual National Professional Service Convention of the National Electronic Service Dealers Association (NESDA). This was my 15th NESDA convention, and I have seen the event change dramatically over the past few years.  It’s no secret that the consumer electronics repair industry has slowed considerably from the heyday of component level repair and less reliable technology.  Just a few years ago, the NESDA annual convention was double the size it is today.
Robert Coolidge President & CEO

Robert Coolidge
      President & CEO

However, one thing that remains a constant is the indomitable spirit and resilience of the membership. Instead of bemoaning the decline, many members are diversifying into other product categories and verticals, such as  appliances, to shore up their businesses.

They are also seeking to innovate outside their traditional comfort zones. During a session for sharing best practices, one participant urged others to leverage social media to boost their businesses by asking customers to post positive comments online.  Another idea was to optimize business websites and boost traffic by incorporating relevant keywords. The participant pointed out that members can easily do this on their own like she did and cut their advertising budget in half.
To continue surviving in the CE industry, we must all seek creative ways to remain relevant and offer services that customers want at an affordable price. The most forward-thinking businesses will figure out how to be hyper-efficient and drive costs out of their operations so they can gain share in a still highly-competitive market. Technology and market conditions will keep evolving, and we have to evolve our businesses along with it or risk getting left behind.

 

Managing Excess & Obsolete Inventory

No one likes inventory languishing on the shelf, but if you carry any at all, you’re likely to end up with some amount of excess and obsolete goods at one point or another.

Robert Coolidge President & CEO

Robert Coolidge
       President & CEO

Parts distributors for multiple manufacturer brands are especially challenged to stock enough inventory to meet current demand, while trying to predict when that demand is likely to plummet and create E&O. It’s a fine balance between stocking just enough to get the sale, but not enough to end up on a scrap list. With new technology and product models constantly evolving, this is no easy feat. Other contributing factors to E&O are:

·    Normal failure rates falling short of historical demand
·    Customer returns/cancellations
·    Changes in the repair process
·    Decrease in product costs making repairs not feasible
·    Increased part costs
·   Gray market, generic or reclaimed parts in the marketplace and not adjusting OEM price to compete
Understanding the underlying reasons for having excess or obsolete stock in inventory is key to reducing your future exposure. Demand today increases and decreases based on vertical. The appliance market is seasonal, while the printer market is more consistent. However, in all cases, demand should decline consistently across verticals depending on the warranty coverage period and longevity of the product’s lifecycle.
To help minimize E&O inventory from accumulating in the first place, work closely with your suppliers to meet their return policies. Consider assigning someone to take ownership of parts returns whether they be cores, new/unused or new defective parts. In some cases, the value of the part could mean the difference in making a profit on a job or actually losing money for failure to return a part.
If returns aren’t possible, offer the goods for sale at a steeply reduced price.  Seek out online marketplaces to advertise E&O inventory to a wide audience. Salvagers are another channel to move dead stock through. Keep in mind, one person’s trash can be another one’s treasure.

 

Customer Loyalty and the Ultimate Question

Net Promoter® score (NPS) has been championed by many Fortune 500 companies as a surefire way to predict whether a business is likely to grow or contract based on an “ultimate question” posed to customers: Would you recommend this company to a friend?

Robert Coolidge President & CEO

Robert Coolidge
       President & CEO

Based on their answer, customers are categorized as “detractors” or people likely to harm the company’s reputation and defect to a competitor; “passives” who are generally positive about the company; and “promoters” who are extremely satisfied and can drive the company’s growth. A company’s Net Promoter score is calculated by subtracting the number of detractors from the number of promoters.

Depending on whom you ask, NPS is either the single best metric of customer loyalty and business growth potential or way too simplistic to be more meaningful than any other similar measurement. Regardless of its actual predictive capabilities, the overarching concept behind NPS remains sound – measuring how well a company is serving its customers and earning loyalty.
In the past, distributors were measured strictly on pricing and availability of their offerings. Now we are much more involved in the customer experience throughout the supply chain. For example, servicer networks of extended warranty companies are measured on how well they support consumer end users. As a parts distributor to these networks, Encompass is directly responsible for ensuring their success (and ultimately the companies or clients they work for) by getting them the components they need to quickly respond and make a field repair.
With customers at a premium, retention is a key factor for success. If you are unable to maintain customer loyalty, especially in a declining economy, you’re in big trouble.  At Encompass, we don’t compete on price – we compete on value. We are singularly focused on improving our value to customers through a variety of means, from making technology enhancements that streamline
parts ordering and account management to continually adding new manufacturer brands in multiple product categories. We consider ourselves an extension of our business partners. We want them to be successful, and we do what we can to provide support throughout the supply chain to make it happen.  This holds true for the manufacturers we represent all the way to the dealer who is buying the parts.  We like to call it “building brand equity.”
Encompass recently distributed our 2013 Customer Satisfaction Survey and urge you to participate. Your feedback is critical to us because we can’t make changes if we’re not aware of the issues.
Input we’ve gathered from previous surveys has led us to enhance our website, change packaging procedures, extend our call center hours and more.
If your business is not already surveying your customers by some means, now is the time. Keeping tabs on the customer experience is vital to the ongoing health of your business and should help give you insight into the answer to the ultimate question as it relates to your organization.

Value of Our Service Division

Encompass is the only consumer electronics parts distributor that also performs board-level repair and other reverse logistics services — such as returns management and asset value recovery — through our company division Encompass Service Solutions. The fact we provide repair services through agreements with extended warranty companies sometimes doesn’t sit well with our independent servicer customers. But in actuality, this capability can help them more than they realize.

Robert Coolidge President & CEO

Robert Coolidge
President & CEO

Encompass has on hand hundreds of defective circuit boards for multiple product categories that we are able to repair and return to the supply chain. Through a collaborative project, the Parts and Service teams work together to identify the boards that are in highest demand by our customers and prioritize them for repair to get them back in circulation as quickly as possible. Our technicians are highly skilled with extensive experience to ensure a top quality product. Techs are also able to test returns to minimize the volume of defective parts returned to manufacturers.

With manufacturer returns privileges getting stricter by the day (a topic for a future blog!), Encompass is seizing on an opportunity to extend the lifecycle of a critical service part and fulfill the needs of our customers, while helping to reduce OEM warranty exposure.