Minimizing Touch Points Can Save You Time And Reduce Expenses

February 25, 2018By Industry Intuition, Views


by Dave Wendland, CommunityVoice for Forbes Agency Council, as appeared on January 19, 2018

The speed of today’s economy demands increased productivity and efficiency. To achieve this, the concept of reduced touch points must extend into all facets of business, including the supply chain. For more than 25 years, my work across the retail supply chain within the healthcare distribution industry has provided a bird's-eye view and firsthand opportunity to witness the compression of margins, rising costs associated with product handling, and mounting pressures from emerging competitors. Our firm's body of work is largely "behind the shelf," addressing areas such as product assortment and placement strategies, item database maintenance, brand marketing and retail-execution support. From these experiences, I have gained a deep understanding of how important minimizing touch points can be for a company.

Take the retail industry. E-commerce and consumer demand have forever disrupted traditional supply chains. For product manufacturers, distributors and retailers, that means there are multiple paths consumer packaged goods (CPGs) may take across the retail supply chain, requiring new thinking and innovative approaches. Not dissimilar to an external supply chain, reviewing the steps and processes involved in moving anything -- products, information, resources -- across an organization will undoubtedly uncover some waste, double-handling and other inefficiencies.

Supply Chain Enhancements

Looking first at the supply chain, it is certain that it can become more streamlined by reducing the number of touch points and costly product handling. An advanced ability to track products as they travel from the manufacturing plant to the consumer is needed to determine how to accomplish these productivity improvements. Many industries, including the healthcare industry wherein our organization spends considerable time, are requiring that companies provide more resources to meet growing regulatory requirements. This added cost of sophisticated digital monitoring and traceability will need to be either pushed to the consumer or absorbed by manufacturers, distributors and retailers that will then seek efficiencies such as reduced handling expenses.

A great example stems from Kellogg Company's decision to disrupt their traditional distribution model. Historically, the company had its products delivered to its warehouses and distributors would then pick them up and deliver them to retail stores. Kellogg's new model delivers products to the retail warehouses directly, which are then delivered to stores and consumers. This new process -- named "Project K" -- is expected to save Kellogg $600-$700 million by 2019.

As brick-and-mortar stores work to keep up with the growing demands of e-commerce, similar adaptations will allow manufacturers to deliver directly to consumers in the case that retailers fail to meet the demands. This may lead to some interesting new models and partnerships between suppliers and retailers. A driving reason for some brands that choose to sell directly to consumers is the opportunity to collect customer data. That was certainly on Unilever’s mind as it acquired Dollar Shave Club in 2016 and began introducing other direct-to-consumer delivery options such as its Hellmann’s mayonnaise program.

Internal Improvements

Savings come in all sizes and shapes. Our company recently completed an internal project to streamline product handling and improve processing throughput. With hundreds of CPG products entering the office each week for digital image capture, attribute codification and content development, one of our certified Lean Six Sigma-trained analysts devoted time and research to enhance the efficiency of this critical procedure. The result was astounding. Not only was the number of touch points significantly reduced, capacity increased and visibility of the product details to the product research, category research, and visual and data asset teams was accelerated.

Consistent with the findings from our own internal process review, I have worked on numerous client projects slowed due to cumbersome internal processes that hinder activities. By taking a broad view of cost reduction, it is possible to foster a culture where innovative thinking and the elimination of waste becomes second nature.

Physical supply chains and internal processes involve a series of steps. The way I see it, the more unreliable the flow between the steps, the more time is expended, continuity is disrupted and inefficiencies mount. Remember that one of the most important requirements for an efficient and cost-effective process is to minimize touch. Each touch incurs a cost and increases the risk of error and time delays.

Make a commitment to be proactive about process improvement and make the time to evaluate one or two processes a year, especially those that have been in place for a long period of time. Taking a fresh look -- or inviting a third party to evaluate a process with a new perspective -- can lead to money-saving and productivity-generating improvements.

The next time the opportunity to streamline a process presents itself at your company, remember this simple business maxim -- fewer touches equals more value.