From “Six Concrete Steps to Increasing and Protecting your Profits”

Late last month, BASM hosted an Executive Briefing on how to increase and protect profits in the Food Manufacturing Sector.  The information was fantastic, and many of the principles can be applied to any industry.

Our speaker,  Michael Lammi,  has spent over 20 years in the Commodity and Food Industries working with Fortune 500 companies such as: Cenex Harvest States (CHS, Inc.), Hunt-Wesson, ConAgra, Pillsbury, Novartis, Aurora Foods, The Scoular Company and Northwestern Foods.

Michael’s experience spans the Food based Supply chain as well as most related Agricultural Commodity Market sectors and is currently focused on business development. Michael’s newest venture has been the formation and start up of a Green House Gas (GHG) management and trading company, CP Holdings LLC., where he functions as the COO.

Michael has extensive Supply Chain experience within the Processing, Contract Manufacturing and Packaging sectors of the Food Industry. In this arena, he has focused on creating, identifying and implementing local, regional and global supply chain solutions. His extensive System knowledge, combined with his Supply Chain experience and knowledge, has been key in helping his customers and clients to understand their risks and opportunities in order to identify solutions. After going through multiple SAP and JDE implementations, he is a strong advocate for manageable systems that can integrate easily into a company’s existing systems and processes.

When asked about growing a food manufacturing or distribution business in these challenging times, Michael commented that the “fastest way to grow your business is by leveraging your existing strengths”, as well as  “using the information you already have to make decisions that align with your vision.”

The key points that Michael made, as they relate to other industries, were:

 1. Baby Boomers are still the greatest potential market.

2. You can find new customers in your existing markets.

3. Increase your profits by understanding your margin and value proposition.  You need to know how you compare to your peers, if you have clearly stated your Value Proposition and can you back it up.

4. Maximize your customer’s business by bundling services.  Ask, what can you do for “free” that locks your customer into your company even though your price may be higher.

5. Increase your working capital by properly managing your inventory, which can increase your bottom line by 50%.

6. Understand your internal costs, such as housing inventory, and consider ways to reduce costs, such as outsourcing. 

7. Focus on raw material planning.  Be prepared so you can multiply your ability to buy into a big advantage. 

8. Look at production planning and determine how much flexibility of delivery is worth to you. 

9. Understand and manage your Fixed and Variable Costs.  If you are going to spend it, you might as well get a return.

10. Consider going green to capture more customers.  It could give you a market advantage, but be sure to look at any associated risks.

If you want to take advantage of leveraging your existing strengths, as well as using information you already have to make decisions, give BASM a call.  We’d be happy to discuss doing a “Business Systems Review” with you, or you may want to take advantage of our “Specialists for the Day” offer. 

For more information on these, or other services we offer, please call us at  (763) 571-8580, e-mail us at RyanK@bautomation.com,  or visit our website at bautomation.com.