In 2013, I was working as president (General Director) of a small branch company in Mexico. One of the clientes was a large company, and we were located within the client's supply chain complex. The company's factory started operating almost the same period as ours.
We established a company, built a factory, and started the supply to the customers. At that time, we maintained a surplus in operating profit and net profit even though it was a short period after the completion of the construction.
As mentioned before in another article, I have been holding a full-day performance review meeting every morning since I was appointed to Mexico in 2008, and I have not left it out when I work as a corporate director.
We discussed every morning about the figures on supply quantity, price, quality issues, inventory level, etc.. I wanted to predict daily profits through the meeting.
One day, after I finished the meeting, I went back to my seat, and I was looking at the figures for the earnings forecast for the month. Then one of the sales managers knocked on my office. Upon entering, the manager informed me that the customer was reducing its own inventory days. As part of the Just In Time policies, it meant that it would reduce its own inventory days and at the same time reduce inventory costs.
I think all decisions start with the analysis of the data. We immediately launched an analysis of how that would affect our sales and profits. In our company, which was in the early days of corporate operation, the reduction in the number of inventory days of the customer predicted a two-month deficit. Our analysis said that after two months, the current inventory would be exhausted and routine supply would be possible. Then we were able to turn into a surplus again.
If that was the case, we believed that our surplus would be maintained if we could have the two-month grace period or if the customer company could expand the number of inventory days by 0.2 days as our analysis suggests.
We started requesting those two suggestions to the manager of the client who was in charge of the inventory management.
At that time, I knew almost everyone from the person in charge of production, quality, purchasing, and logistics of the customer's factory to the directors. I attended all meetings of the client company during the initial setting process.
And when I had heard that the customer would organize TFT to improve the operational productivity, I asked the customer if I could join the TFT team. These activities resulted in accumulating the trust of both sides.
So the customer said they would review our request, and we were waiting for the result of the review. While waiting, I visited the customer's warehouse and reviewed the number of work trucks considering our storage capabilities. I also reviewed all matters according to the reduction in the number of inventory days of the customer.
Finally our suggestions were accepted that the customer would expand 0.2 days of inventory level for two month.
As a result, we were able to maintain the surplus, and the customer sent us a feedback saying that they were satisfied with our response and services. I look for favorable feedback from these clients in trust. Trust between the two companies can lead to a lot of cost savings and promote communication channels.
From the beginning of the customer’s factory operation, we tried to find and do almost everything that could help improve the quality and productivity of our customers, so there was even a case where the maintenance department of the customer visited our factory to take measures in case of facility problems at our factory. This case cannot be made without mutual trust.
After making profits with just one supplying act, it is not desirable to withdraw immediately when the customer is in trouble.
The recognition that the development of customers is also our development is the first step in building trust.
