We Used Crows Nest Software To Reduce Our Inventory More than 50%

Joe Wadsworth, CEO of Custom Source Woodworking in Olympia, WA, devoted 2 years to reducing his non-stock inventory, which helped him achieve his goal of adding $207,000 net new profit to his bottom line.

Case Study with Joe Wadsworth, CEO, Custom Source Woodworking Inc.

Here’s Joe talking about one of the strategies he used to accomplish this: inventory reduction.

Read the story or listen to Joe’s audio interview.

Listen time: 1:33

If you read financial advice books, they really stress the importance of managing your inventory and getting it down to just what’s necessary.

We used to not know how much inventory we had, and now we know exactly how much we have and where it’s at. It’s what Crows Nest Software does that made this possible.

Everything is logged in there, like: Go to cabinet 5, shelf 3. We can go right there. We used to just open every cabinet door looking for the product!

Now we have real live inventory, and our WIP is way more accurate. But that was a huge commitment and a huge push to be able to do that.

It’s also accessible throughout the whole company. The engineers can look at the inventory and utilize any kind of overstock or excess inventory or take it straight out of our stocking inventory.

Say you’re engineering something and you’re like, “I need 11/16ths VL particle board.” In the inventory you see, “Oh, I have it on plywood. That’ll work for this application.” You use up that one sheet out of inventory instead of spending $80 or $90 on another sheet of laid-up laminate.

Anybody can do this with access to Crows Nest.

Since we started doing this, we had an overstock inventory of $250,000, and we’ve reduced it down to $120,000. We’ve shrunk it in half–in 2 years of eating away at this inventory excess. In our industry, things change, and you have engineers that mis-order stuff, and all kinds of different things that causes you have to excess inventory. I don’t think Crows Nest Software sells this hard enough because, eventually, this will be $210,000 I don’t have to spend.

Reducing your unnecessary inventory and getting it down to your core inventory–what you need to be able to function efficiently–is what we rely heavily on Crows Nest Software for.

A second strategy for minimizing inventory is…don’t buy more than you need in the first place! We continue with Joe’s Crows Nest Software process in this audio clip…

Read the story or listen to Joe’s audio interview.

Listen time: 1:30

Before, I’d go in and I’d chew out the person who screwed up: “How the hell could we run out of 3/4 white melamine? That’s the last thing we should ever run out of!”

Well, you know the next week, I’d have 6 units of 3/4 white melamine, and it would take me 2 months to get rid of it. He’s like, “Yes boss, we’re never gonna run out of 3/4 melamine ever again!”

So that’s the other thing you have to watch for: People overreacting and overbuying because we just had this horrible thing. We ran out of some regular supply that we use every day, and then they overreact. Now you’re stocking twice–10 times as much as you can possibly use of a product that’s off the shelf and it’s only a day away.

We reduce our inventories based on how long it takes to get it and our consumption. So now, we stock 40 sheets. We’re never going to need more than that in a day, and I can get more if I do the next day.

So at the end of 2018 we’ll do a celebration. I’m handing out checks to employees because we do a very aggressive profit-sharing and two-thirds of the net profits will go to the employees. They have potential to bring in profit sharing that’ll surpass their wages. I can’t wait to hand those checks out. I won’t have any problems attracting good employees after that!