In an earlier blog post, we covered how Depatie Fluid Power, an automation machinery manufacturing firm, uses data to foster growth. In this installment of our Metrics that Matter series, we’ll take a deeper dive into how Depatie’s strategy helped guide it through the disruption of recent years.
At the onset of the COVID-19 pandemic, automation machinery manufacturing company Depatie Fluid Power faced decreased demand for its products as many customers shut down or reduced their operations. However, Depatie itself was in a complex situation because the portion of its business dedicated to manufacturing integral pneumatic subassemblies for ambulance cots and hospital beds was considered essential.
The team at Depatie used scenario planning to determine which parts of the business it needed to keep operating, and thus which people would need to come in to work, as well as which parts could be managed remotely. Because circumstances changed frequently, scenario planning helped Depatie stay nimble and adapt quickly. The finance team put an especially large focus on cash flow metrics to ensure that they could run accurate scenarios and make adjustments, but not go through a complete financial re-evaluation every few months.
Demand continued to be lower than usual for Depatie until the beginning of 2021 when order activity unexpectedly increased by over 30% in a four week period in March.
“The pace of order entry was escalating unlike anything we had ever seen before in our space,” said Ryan Thomas, general manager at Depatie.
Given their penchant for scenario planning, the team at Depatie was able to adjust quickly to handle the influx, making several strategic moves including using blanket purchase orders. As they worked to ramp up operations, these extended purchase orders with staggered delivery dates saved Depatie time, money, and resources by eliminating the need for separate sourcing, approval processes, and paperwork for each purchase made.
Visibility Into Metrics Pays Dividends
Depatie’s emphasis on metrics proved integral again when it came to the Paycheck Protection Program (PPP) application process. In addition to NetSuite dashboards, daily digitized flash reports provided an up-to-date view of key financial and operational metrics.
“Our ability to have our metrics at our fingertips played a big role for us as a small business in the PPP process,” said Thomas. “Because that was a fairly ambiguous program that ended up having a lot of rules around it that required us to be very on top of and detailed with data and timing.”
Because the Depatie team had already been focused on having current metrics on hand for strategic decision-making, they were able to adeptly navigate the twists and turns of the PPP process and received a loan.
“I don’t know if that program would’ve worked out the same [for us — given the fluidity and how quickly things were moving — if we did not have the visibility we had,” said Thomas. “I don’t know if we would’ve made the same decisions or been as prepared to participate.”
Changes in Delivery Metrics
Like many businesses, Depatie has felt the impact of disrupted supply chains in recent years. The added complexity caused the team to rethink how they monitor their “on-time delivery” metric, instead splitting it into two separate numbers to track.
They first manage the date that the customer wants a product.
“We measure our organization on the date the customer wants it,” said Thomas. “That tells us how good we are at anticipating our customers' demand, stocking the right inventory and managing lead times.”
However, with supply chain issues, Depatie now also manages their teams based on what’s realistic.
“We [also] manage our teams on the date we actually provide the customer,” said Thomas. “So that tells us how well we communicate and how well we execute once we've given them a date that [the team] can work with.”
While the date desired by the customer was already a native field within NetSuite, the date provided by the team was a customized field that, according to Thomas, is one of their most heavily-used pieces of data.
Continuing to Monitor
Going forward, the team at Depatie is continuing to monitor their metrics closely. With rapidly-shifting prices, fluctuating demand and supply chain disruption still prevalent within the manufacturing space, Depatie knows that plans may shift unexpectedly.
The key to handling change, according to Thomas? Visibility.
“Visibility into how metrics are moving and being able to easily see daily, monthly, and year-to-year activity is invaluable,” said Thomas. “We can quickly look and say, ‘Okay, we've got something going on here. Let's have a discussion on what we can do about it. And then let's execute.’ And that can all happen in a 15 minute meeting.”
Bottom Line
While tracking metrics has always been an integral part of business, the last several years has solidified the need to numerically gauge performance — and to use data in charting a path forward.
In addition to using digitized flash reports and external sources of data to inform their strategy, the company is looking at creating a new metric to reflect their flexibility, productivity, and efficiency.
With such real-time metrics at its fingertips, Depatie doesn’t have to waste time pulling data or risk being surprised by results. Instead, a metrics-based strategy lets the company react quickly in the face of a shifting industry.
See how your business can maximize inventory sell through and avoid stockouts in a demo of NetSuite Inventory Management. (opens in new tab)