LINKING PROCESSES, PEOPLE, AND PRIORITIES IN THE SUPPLY CHAIN







What Is Important for ERP Success?

December 18th, 2014
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ERP success

The multifaceted task of implementing a successful ERP system starts with selecting the “right” system and having a cohesive, adaptable strategy.

What is important for ERP success?  The most important ingredient to success boils down to implementation; however, it will help set your implementation up for success if you select the “right’ system as well.  Here are a few strategies to ensure success:

1. Just the critical few key requirements. Although it is natural to think that every piece of functionality is critical (or why not include it since you’re spending money on a new system anyway), don’t. Take a step back and focus 80% of your efforts on the 20% that drives your business.

2. People. Nothing else matters if the right people aren’t on the team. It is 99.9% probable that something will go wrong during the system implementation, and if you have the right people in the right positions (on the implementation team, focused on change management, leading the organization, etc.), they will turn these potential boulders into tiny pebbles along the road to success.

3. The process must be led by the business functions, yet the IT project manager is the key. I know this sounds like a contradiction, but it is one of the most important elements to success. The business must lead the process to make sure it is focused on the key elements that will support the business and drive business value/return; however, they typically are not the best equipped to ensure a successful execution. Therefore, finding an IT project manager proficient in bringing it all together (the business needs, project management, the IT elements, etc.) and facilitating the implementation (sometimes behind the scenes in a supporting role) is key to success.

4. Change management. It isn’t necessary to be an expert in change management to be successful. Instead, leadership is the key – communicate proactively, provide as much clarity as possible about the future state, the roadmap to get to the future state, ask questions, and listen.

5. Training and education. It is the only way to make sure the business results are achieved. Don’t just focus on the how-to’s. Remember the whys – we want people to think, ask questions, push back and work as a team to deliver the expected business results.

Did you like this article? Continue reading on being the System Pragmatist:

Can You Prevent ERP Chaos?

The IT – Business Partnership

 

© 2014 LMA Consulting Group



Selecting the Right ERP System

December 16th, 2014
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enterprise resource planning

For a better return on your investment select the ERP system based on which is most compatible with your business processes vs. technical prowess.

 

ERP systems are not of much value by themselves; however, if you leverage the appropriate functionality to support your business, it can pay back rapidly with business growth and value. The key is to select the “right” system for you – a good “fit” for your business.

I find that my ERP selection projects are far more focused on business processes than on technical specs. Actually they can boil down to answering the following question: Which business processes (and related system functionality) are integral to achieving your strategy and providing a competitive advantage? Focus in on just those critical requirements.

For example, one of my clients is a battery manufacturer. In their business, traceability is a must. If a battery explodes in a cell phone, they must be able to trace the lot and serial number without delay. Thus, although finance functionality is needed, it does not matter if the system cannot support rapid and flexible tracking abilities. What are your critical success factors?

Did you like this article? Continue reading on being the System Pragmatist:

5 ERP Selection Pitfalls 

Innovation Does NOT Need to be the Next iPhone!

 

© 2014 LMA Consulting Group



Dow Plunges…Volatility is the New Normal – How Adaptable Are You?

December 15th, 2014
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supply chainIt is all over the news that the Dow plunged more than 300 points, as the sustained drop in crude oil spurred on growth concerns.  Yet last week we had news of the highest job growth in 15 years.  The bottom line is that volatility is the new normal.  How prepared are you and your business for volatility?

Pre-recession, a 100 point drop in the Dow would have spurred on more news than last week’s 300 point drop as volatility has become expected.  This is true in business as well.  For example, one of my clients said that they can have a dramatic increase in orders on Monday morning based on a promotion run on their e-commerce site over the weekend. This is not uncommon. Thus, the key to thriving is to be prepared, resilient, agile and flexible. Do you have people, processes and systems in place to leverage as needed?

One tip to implement this week:

Start with one area of your business or your responsibility – ideally start with one of the most important areas to achieving your strategy and goals. No reason to take on more than you can do successfully as you’ll move 1000 items forward by a quarter inch (if you are lucky enough not to move backwards in several areas) vs. moving your most important area forward by a mile.

Think about how you can be flexible and agile as volatility occurs. It could be great or horrible; either can turn sour if you are not prepared. Build flexibility into your plans. It will not happen by default. Cross-train your high-skilled resources. Utilize temps and contractors for short-term needs. Think about backup suppliers etc. You don’t have to have all the answers. Gather your team to think about how to build flexibility in your business. 

Looking for more ideas to keep your supply chain talent? Access more tips and resources on my blog. And keep connected by subscribing to my newsletter and email feed of “I’ve Been Thinking…”

 

© 2014 LMA Consulting Group



The $1 Million Dollar Planner

December 11th, 2014
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$1 Million Dollar Planner

With all the competing demands within a supply chain organization, a $1 Million Dollar Planner is the person that can see the bigger picture and communicate just how the company’s objectives can be achieved.

What is a $1 million dollar planner? And why does it matter?

I’ve always been intrigued by the concept of a $1 million dollar planner, which I define as a planner who provides millions of dollar of value to the company’s bottom line – which answers the question of why it matters! I come from a planning background, so I have a bias on this subject, yet my perspective is also based in facts. Typically I’ve found that planners are a lower level position (unless they are a planning manager), yet it is a key position that significantly affects the company’s performance – making it a challenge to find the ‘right’ person for the position. Why?

A planner is in the middle of a hornet’s nest by the nature of the role – in essence, this person is coordinating among several conflicting objectives and parties including sales, finance, production, customers, etc. A planner’s job is to optimize among several variables to put together a production, distribution, transportation or other type of plan that best meets the company’s objectives. In a production planning example, sales typically prefers to have extra inventory to make sure to fill unanticipated customer needs (does the comment, “we can’t sell from an empty bucket” sound familiar?). Finance prefers to minimize inventory because every dollar of inventory is a dollar of cash tied up. Production typically prefers to produce long production runs since it seems more efficient, which results in increased inventory. The warehouse prefers lower inventory levels because there is less inventory to move around the warehouse and to search through to find what the customer requires. So, what would a $1 million dollar planner do with this situation?

A $1 million dollar planner would not view all these objectives as conflicting; instead, he/she would look for “and” opportunities (ways to achieve several objectives at the same time). In order to achieve this outcome, the planner has to push back on the common misconceptions and help the various functional areas work together to achieve the end result. For example, the planner needs to work with sales to show them that there are alternatives and tweaks to the theory of “you can’t sell from an empty bucket”. Instead by partnering with customers, focusing on demand data/forecasting, working with suppliers/ deliveries and production lead times, and prioritizing efforts of key items/skus that achieve the “80/20”, it is possible to reduce inventory while improving customer service. Another example is to push back on the need for long production runs. Instead, focus on quick changeovers for the key skus, which achieves flexibility (which improves the ability to achieve customer service and reduces the need for long production runs) with a lower overall cost.

However, what skills are required to achieve this objective? – A combination of analytical skills, communication expertise and confidence (after all, the planner typically is perceived as stirring up trouble in the minds of dueling parties). I’ve found this combination of skillsets to be a unique combination. How often does any resource possess this combination of skills, let alone a lower level position resource? Not often.

I’ve found the key is to find the resource with the aptitude and attitude required for this type of role (whether or not they have experience) and provide the training, support and tools for success. And, this position needs what most people need – someone who values his/her contributions and understands this unique, complex environment (whether or not they can navigate it themselves). It sounds simple, but it can be the critical component to your $1 million dollar planner.

Did you like this article? Continue reading on being the Strongest Link:

A Planning Mindset Is Invaluable to the Supply Chain

Profit through People: Is Talent Important to You?

 

© 2014 LMA Consulting Group



Leverage Supply Chain Trends for Success

December 9th, 2014
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trends

The ability to see supply chain trends and capitalize on them can set you apart from competitors, no matter the size of your company.

As the year winds down, it seems an opportune time to discuss supply chain management trends. I find that those clients that pay attention to trends and find opportunities to leverage them often surpass their competition.

I’m working with a diverse portfolio of manufacturers and distributors ranging from $6 million dollar, family-owned businesses to $100 million dollar facilities of multi-billion dollar, global companies.  When I see trends that cross company-size, geography, position, etc., I take note.  If you can apply the “right” best practice to the “right” situation at the “right” time with the “right” people, you can dramatically increase the value of the business.

Several of the latest supply chain management trends that pop to mind include:

1. The value of collaboration:Although I’ve always believed in the value of collaboration, my critics thought it was too “touchy-feely”. Imagine how surprised they are to see dramatic growth, profit and cash emerging from collaboration! And now it is gaining in popularity to boot.

For example, SIOP (sales, inventory, & operations planning) can yield substantial results by aligning demand with supply, and more importantly aligning the various departments of the organization – and customers and suppliers – on the same page. One of my clients achieved a HUGE increase in service levels (from 60% to the high 90%’s) and a 10% improvement in margins. Not too shabby for “touchy-feely”!

2. Innovate to thrive: Since the world has become complex, global and highly competitive, we must stand out from the crowd. Operational excellence must be an assumption. Instead our focus should be on innovation. Innovation does NOT need to be a new invention or a new product or service. Instead, it can be a new way to leverage already-existing processes, tools, products, etc. How can we re-package and combine products and services in a way that provides exceptional value for our customers? Do NOT think R&D has to be where innovation starts.  Involve your employees. I promise you’ll be thrilled with the results.

3. Leverage technology: It has become more difficult to “keep up” with customers’ expectations, competition and the ever-changing business environment; thus, it is essential to leverage technology for success. Of course, you can still have the most efficient, manual system possible; however, if you are spending time doing what can be replaced with technology, you have missed an opportunity to grow your business, innovate and the like.

For example, I’m finding that utilizing the “right” ERP system can give small and mid-tier companies the infrastructure they need to take advantage of GROWTH opportunities. For all-size companies, ERP systems will provide the tools to collaborate with customers and suppliers, accelerate cash flow, increase efficiencies, etc. Of course, it does not stop with ERP systems. Evaluate your needs and be smart about selecting the right technology for your needs. Perhaps bar coding, forecasting, e-commerce, business intelligence, etc.

4. The Skills Gap: According to my firm’s research study, 77% of manufacturers and distributors are facing challenges in finding skilled resources. However, I didn’t need to conduct a study to determine this trend – it is prevalent with my clients, my APICS Inland Empire Chapter (I’m the President of the Inland Empire chapter of the #1 trade association for supply chain management) and my Ontario ProVisors group (I’m a group leader for a group of trusted advisors inclusive of CPAs, attorneys, commercial bankers, etc., in the Inland Empire).

The KEY to this trend is that those executives who value people will have a significant opportunity to leapfrog the competition. I see underappreciated and undervalued people at every client. Look for them. Give them interesting work. Appreciate their contributions. They won’t be thinking about shorter drives, more money and better bosses because they’ll be engaged. Since it is clearly a winning strategy and costs us nothing, why do so many companies ignore it?!?!

5. The Amazon Effect: According to my firm’s research study, 65% of manufacturers and distributors feel customer service gaps vs. Amazon-like offerings. Amazon is driving substantial increases in customers’ expectations. For example, my clients’ customers typically expect a 50% reduction in lead times – and 24/7 accessibility in some fashion has become an assumption. Have you set up your organization (people), processes and systems to meet these needs?

6. Near-sourcing: My next research study will be on in-sourcing and near-sourcing as I see this trend continuing to gain steam in the next year. The TOTAL cost to produce in China has become negligible to the cost of producing in North America; thus, executives are beginning to think about in-sourcing and near-sourcing. After all, how will they deliver same-day or next-day from China? What type of cash is tied up in inventory, in transit and in warehouses?  How can they reduce supply chain risk? And the list goes on. How do you think this will impact the skills gap?

Pay attention to trends for opportunities to grow your business, become more efficient, increase margins and the like. I’m launching a new service, the Profit Chain Accelerator Program to identify and leverage these types of opportunities. Email me for more information.

Did you like this article? Continue reading on being the Strongest Link:

Emerging Supply Chain Trends

Inventory Velocity

 

© 2014 LMA Consulting Group



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