The Beginning & Ending Of A Quarter

Will:
All right, everyone. We are back. Another episode of Safety Stock. It is July 5th. I am Will Davis. This is Dan Magida. Dan, how are you doing, good sir?

Dan:
Doing well. You’re looking extra crispy and tan over there today.

Will:
I feel crispy and tan. I only need some Carmex and then I’ll probably like complete the look, but right now, yeah, I feel good. I feel like the sun has been kind to me this summer.

Dan:
That’s good. That’s hopefully that main maintain that.

Will:
Yeah, no, I same here. Apply sunscreen, everyone. That’s my you know, one thing to tell you, in addition to applying sunscreen, I think we’re gonna talk about today, Dan. We had a new quarter just kickoff really just on the first

Dan:
It’s crazy.

Will:
I know. So we’ve had two quarters that down, we got two more to go, and there’s a lot of different things that happen from a supply chain perspective overall, from a business perspective, when you have a quarter end and when you have a new one begin. And so what we wanna do is cover some of those things that, you know, probably you may be doing now, if you’re not, it’s a good time to start and maybe even cover some things that you may not know about and get right into it. So, Dan, when you think about a quarter ending and a new one beginning, there are certain financial triggers that take place during that time. What are some of the things that are going on that businesses have to do in order to meet their obligations? When a quarter ends,

Dan:
One of the biggest things is calculating that inventory cost across all your areas that you could be storing. So that could be at your fulfillment center, your first place, getting inventory accounts there, your warehouses, if you’re storing at a contract manufacturer, they may have inventory because all of those impact either your financials in one way or the other on the balance sheets or your cost of good sold, if they’re, if they’re finished goods, but also what’s in transit based off of a PO level at your man at your manufacturer or component level. So really drilling in on that. And it’s also a good measure of what you’re halfway through the calendar year as well, to figure that out. I’ve had situations where I’ve done inventory counts at a fulfillment center, and I have way less than I anticipated because it’s not due to selling rates.

Dan:
It’s because stuff can get lost in a fulfillment center warehouse, especially secondary packaging. I’ve lost thousands of quar get shippers in the past, and it’s a good checks and balance cause I have to go reorder more as well and get, get ahead of that in these months too. So it’s a good reset and just understand where you are is your inventory being calculated correctly. And if it’s not, how can you address that and fix that? So it’s more real time cuz you should have an understanding based off of what your POS are and your so through rates, what your inventory levels are offhand.

Will:
Number one, if you can find Dan shippers, please contact him. I’ll put the his phone number in the link to the show. In addition to that, Dan, you know, when you’re thinking about inventory that has to be taken care of, you have to have physical accounts to really make sure that your E R P or the different inventory management systems, if you’re using one is accurate. In addition to that, you have your budgets. You know, you have budgets in place of what you’re doing from a spin perspective. Some teams are traveling a lot. They have travel budgets to visit suppliers, to go different places. You have your budget in terms of what you’re expecting to order from a physical good perspective. Shipping is now coming into play too. So you know what you budgeted at the beginning of the year to ship, if you’re air freight more things that you thought or rating in general, when you didn’t expect it, you’re probably blowing through those budgets to begin with. And so now this is the time where you’re communicating to both suppliers to your team, to other cross-functional partners. And you’re saying, Hey, you know, we’re calling this out at a good time because now either we’re gonna have to cut back in terms of how we order. Are we accelerating? What we order? Can we pull from different things? This is all taking place around this time. You’re at, you know, if you’re at the half year mark for the calendar, this is where that’s coming to deploy.

Dan:
Yeah. And another thing that you can tackle and we advocate for as well is scorecarding, and there’s a lot of different things. You can look at quantitatively and qualitatively as well, that assess that scorecard. You don’t have to do it each quarter. You can look at in the first six months of a relationship and that’s supplier on time performance, are they, is your supplier meeting your goals and your deadlines of when you need production completed. That’s a quantitative measure because you can just check off of your PO the shipment date versus the data actually shifts. So really easy check or qualitatively like through your interactions with them. Are they responding to your inquiries and keeping up with like the quality of your product as well?

Will:
Yeah. And it’s actually something that you can do on Ambi and that you can get some of those supplier scorecard attributes and then apply it pretty easily. And from an automated stature, you should be meeting with your suppliers quarterly, you know, it’s important, not only that, but you can start finding things that you didn’t necessarily know that was going on and it wouldn’t come up in the day to day environment that you can make some small changes of pivots to there. In addition to that, there’s other random things that coincide with, you know, a quarter and, and beginning, you know, for some resin rates, you know, you’re doing resin rates that are getting reset and typically being administered on a quarterly basis. And so you’re paying for resin based on the pricing, it was in the past quarter. And then that next quarter you’ll be paying for what the price was for resin during that quarter.

Will:
So it’s kind of always that three month trailing price. In addition to that, it’s hard to get a hold of certain people during certain months of the summer quarter. You know, if we’re thinking about third quarter from a calendar year, France, Spain good luck finding them in August they’re in Morocco or they’re in, you know, somewhere else. They’re not mostly a lot of time. They’re not working in the us. We have you know, a good example is one of the suppliers I work really closely with they’re taking off the entire week of 4th of July, 4th of July is on a Monday. That means that you would have to have people start coming back on Tuesday and then are they going? If they have people who wanna leave early, like on a Thursday, Friday, if they have vacation planned in the middle of the week, they’re just like, eh, just take it all off. And they’re telling people, they told people plenty in advance. We are not working 4th of July, come to us on seven 11, if you need stuff done.

Dan:
Yeah. The summer brings a lot of flexibility in worker schedule and also can boost morale at the same time for, for this worker. So just be on the alert of when off days are, cuz what a lot of these suppliers are doing, that when they’re closed, they’re doing their own inventory counts as well. Just, just like you have to do it to ensure what your books look, look like. Maybe do the same thing as well. Cause it all, it all impacts their bottom line too.

Will:
We’re in a good place in that we have July 5th off that next day after July 4th is similar to like a super bowl. You know that Monday after the super bowl you’re coming in, there’s a good chance. You might wanna be somewhere else,

Dan:
Especially if it’s 80 degrees and Sony outside.

Will:
Yeah. I mean, I’m looking outside right now. It’s beautiful. It’s gonna be a scorcher. I think it’s gonna be 92. Am I a little jealous? Yeah, I’m jealous. And Dan, I think maybe the last thing that we do is we wrap it up. There are a lot of different things that we talked about that coincide with the quarter end. And I think the prevailing theme here is is that if you’re looking to get something done and you need it urgently, you should probably take care of it prior to the last week at the end of a quarter or within the first two or three days at the beginning of a quarter, because there’s going to be a lot of people tied up and getting those tasks done that is related to that time period in order to keep businesses moving and reporting to the people they have to report to.

Dan:
Exactly. Right. Just constant communication, always key to great supply relationship.

Will:
All right. Well, in that case, if there’s anything we missed or there’s anything you think of like, Hey, this is awesome. That happens at the end of the quarter. We wanna know. So let us know, reach out to us at hello@anvyl.com. That’s a-n-v-y-l.com. And while you’re listening to us, either on the beach, in the mountains, on your canoe first to a friend, we greatly appreciate it and we will talk to you soon.