Which aspect of doing business has the most impact on whether or not a company is successful? Is it the hiring process, the management style or the online marketing strategy? Not necessarily. For many companies, it is how they manage their inventory and control their costs that makes the biggest difference.
A Salt Lake City dried-fruit, nut, and candy manufacturer called Nutty Guys discovered this for itself when it faced a pivotal moment in its history. This multimillion-dollar company produces and distributes hundreds of tons of snack foods each month.
A few years ago they had grown so swiftly that they were facing challenges in keeping track of their inventory. Which products needed to be reordered? Which ones were on their way? How many did they have on hand? These and many other important details were difficult to tell based on the records in their Excel spreadsheets.
Nuts and Bolts
Nutty Guys decided they needed to automate their inventory management by using Fishbowl Inventory software, barcode scanners, lot numbers, and other tools. Pretty soon they were able to organize all of their products and have orders sailing smoothly to customers. The secret to their success lies in their focus on four important areas:
- Frugality – To keep costs down, Nutty Guys prints black-and-white product labels, avoids flashy but pointless tactics, and minimizes the number of idle products in their warehouse.
- Totaling Costs – By measuring all the costs of labor, ingredients, and equipment that go into finished products, they can set appropriate prices for their customers.
- Inventory Tracking – They now have the ability to monitor products from manufacture to sale, and orders from receipt to delivery.
- Production and Sales – They find places to increase efficiency by analyzing each step of the production process, and they see which products they should stock up on by tracking sales.
Early on, Nutty Guys discovered an important truth that can be difficult for companies to learn: they don’t need equipment that is brand new. They just need it to be able to do a great job. They’ve found creative ways to get their hands on an impressive array of manufacturing equipment for bargain prices, and it shows in the competitive pricing of their products. They’re solely interested in using their resources to create the right kinds and quantities of snacks for their customers. Rarely do products stay in storage for longer than a week before being sent off. This helps prevent spoilage and wasted materials.
In other words, they care more about their mints’ condition than they do about having equipment in mint condition.
Never Bean Better
By doing everything listed above, Nutty Guys is well-equipped to satisfy their customers. As companies grow and mature, they need to start using more sophisticated methods to get the job done. The most successful companies aren’t necessarily the ones with the highest sales, but with the lowest overhead costs and the closest attention to details.
For Nutty Guys and other lean manufacturers, victory has never tasted so sweet!
Robert Lockard is a copywriter with Fishbowl. He writes for several blogs about inventory management, manufacturing, QuickBooks, and small business. Fishbowl is the #1-requested manufacturing and warehouse management software for QuickBooks users. Robert enjoys running, reading, writing, spending time with his wife and children, and watching movies.