1. Balances demand & supply – The key benefit of SIOP is to balance demand (sales forecasts) with supply (our ability to meet the sales forecast in the most profitable manner typically focused on production plans, purchase plans, capital plans and inventory plans).

2. Encourages collaboration – An often-overlooked critical component to success is to align all the functions of a company on balancing demand with supply.

3. Highlights roadblocks to success – What could be better than to avoid the drama and stress associated with pointing out issues (which are often attached to people)? Instead, SIOP highlights these issues as a part of the process.

4. Forecasts financials – SIOP will not only balance demand with supply but it can also be used to forecast revenue and profitability.

5. One Plan - How often do you find multiple sales forecasts and cost improvement plans – one to manage to, one to send to your boss, one for the budget, etc.? SIOP brings it together into 1 plan.

© Lisa Anderson 2013. All rights reserved.

I wholeheartedly believe in the vital importance of supply chain fundamentals as 80% of my clients dramatically improve supply chain performance with a bit of focus on fundamentals. It isn’t as exciting as the latest and greatest fad but it “works”! As executives are interested in return on investment, they are thrilled if I implement simple or bedrock concepts that generates 10:1 returns. For many years, I told folks that I focused 80% of my time on people with 20% on process and systems. Recently, I realized that I was undervaluing what I did – by asking the right questions (which relate back to the technical expertise), I was able to focus on the “right” areas. Then, 80% of my work goes back to culture change and people.

As I said in my speeches this week, in today’s new normal business environment where volatility is the new norm, customers’ expectations are elevated and speed is king, you must stand out from the crowd. Being exceptional on the fundamentals will get you into the main race. Then, you can expand on those concepts with collaboration and innovation to accelerate supply chain performance. If you’d like to hear more on these types of topics, please sign up for my free monthly Profit through People newsletter (http://www.lma-consultinggroup.com/newsletter.php).

© Lisa Anderson 2013. All rights reserved.

1. What matters in your operation? – Forget about Lean, Six Sigma, TQM and the rest for now. In my experience, it is a distraction and doesn’t correlate to success. Instead, take a step back and think about what matters in your operation. Are materials significant? Or labor? Short lead times? Quick configuration?

2. Track just a few key metrics – Track what matters. It sounds simple but is often overlooked, too complex or lost in the shuffle with all the noise. It will get focus on what matters.

3. Uptime – Several times, I’ve found that uptime percentages are more impactful than efficiency rates yet we spend 80% of our time on efficiencies. Why? Instead, find out why the machines aren’t running.

4. Eliminate waste – Most of the time, I find that the key to success is identifying waste. Once it’s identified, if the right people are brought together, it will be addressed. Don’t run in circles.

5. Collaboration – As operations folks, we are often times too reluctant to bring in experts (believe me, you are not alone if you feel this way!). Instead, ask experts and create an environment of collaboration – suddenly, your issues will disappear. Include engineering, R&D, suppliers, customers, software experts, etc.

© Lisa Anderson 2013. All rights reserved.

Thus, thinking about supply chain strategy is an excellent place to start to ensure you are positioned successfully to meet and exceed your business strategy. What are the critical elements? 1) Start by being customer focused. 2) Build in responsiveness. 3) Supplement with operational excellence.

1. Start by being customer focused: This fundamental requirement has not changed. The key is to ensure you aren’t thinking about this from a peripheral level. For example, I’ve yet to find a customer who didn’t say that every element of product design and delivery performance is important yet they cannot all be of equal importance.
We must dig deeper and ask clarifying questions in a collaborative manner. For example; how would you prioritize the elements? Which are you willing to increase the price paid in order to receive? Are you willing to collaborate (requiring an investment in time) to find ways to achieve them?

Get to know your customers and your customers’ customers. I’m surprised how many times when working with my client’s key customer on vendor managed inventory or collaborative ordering programs that we find ways to provide value to the key customer by getting to know their customers (watching for patterns, analyzing the data, asking questions). Customers don’t always know what they need until they see it. Who knew they needed an iPod? Think of the value if you are the one to identify it!

2. Build in responsiveness: There is little more important in the new normal business environment than being responsive or agile. Volatility is the new norm. No one knows what will happen next week or next month, let alone 1-5 years from now. If executives admit what is feasible, long term strategies are 1-2 years; beyond that timeframe is useless. Thus, the key to success is to be more nimble than your competition.
There are countless ways to build in flexibility and responsiveness. Let’s start with our customers – do we allow for changes in demand patterns? I hope so! Customers and suppliers go out of business; widespread shortages occur; natural disasters and political events create havoc in the global supply chain. Do you have inventory positioned close to your customer – owned by you? Owned within your supply chain? Owned by a competitor? Do you even know? I’ve seen companies work out win-win agreements with competitors to succeed.

Do you cross-train? Do you utilize temps to increase or decrease volumes quickly? Can you fill high-skill needs for short-term periods nimbly? How about contractors? Are you stuck with old, limiting rules? Do you have backup suppliers? Do you give your backup suppliers some volume even if it costs more so that you are ready at a moment’s notice? How long is your product life cycle? What worked 5 years ago could be obsolete before it is launched. Re-orient your thinking!

3. Supplement with operational excellence: Bedrock to supply chain strategy is operational excellence. There is no way to be customer focused or responsive if you cannot perform. It’s interesting how often this is overlooked as it is often seen as the “boring” part of the job – blocking and tackling.
How efficient is your supply chain? Think about your supply chain in the same way as you think about the lean transformation of the factory floor (which also can be a key component of your supply chain). How does your spaghetti diagram look? Are you traveling a million miles with a horrifying carbon footprint when you dig into your supply chain?

Do you, your customers, your suppliers and other partners reward, recognize and instill performance management processes to support supply chain execution? Or do you need to find alternatives – even at higher costs, longer distances? Undoubtedly, you’ll be at least 10 times more successful looking for the “right” supply chain partners – and all else will fall into place over time.

Those with a solid supply chain strategy have a competitive advantage over their competition. How can you stand out in the crowd with supply chain competitiveness?

© Lisa Anderson 2013. All rights reserved.

In my experience in collaborating with executives of mid-market manufacturers and distributors, there are countless opportunities to leverage social media to optimize your supply chain. I’ve found that those professionals willing to innovate and utilize new technologies to collaborate and extend their network are far more successful than the rest. Which group would you prefer to be in? To read more about ideas to get ahead of the curve, check out my eBook, Leverage Social Networks to Drive Business Results.

© Lisa Anderson 2013. All rights reserved.

My cat Smokey proved that “if you don’t know you can’t do it, you just might succeed” – see his feat in the picture (no claws yet he still made it up the tree)!

After working with some highly creative people (such as my R&D Director in my former VP of Operations role and my friend and colleague who is a Caltech PhD), I discovered that even though I would never be considered creative in many respects, there was no reason to lose hope; instead, we need to be creative in our own way! When it came to seeing trends and opportunities in the supply chain where others didn’t, I left my competition in the dust. How are you creative? And how can you leverage your creativity?

I find that getting ideas on what’s possible helps to start the creative juices. Feel free to rummage through my articles for ideas on how you can stand out in the crowd – I have no doubt, there are countless opportunities.

© Lisa Anderson 2013. All rights reserved.

Executives are still concerned about making decisions with minimal knowledge of what will occur tomorrow – what will happen to their key customers? How about core suppliers? Will cash reserves have to be used? Will talent be available?

With this level of volatility and complexity, talent is essential. Who else will innovate and find answers to these puzzles to achieve their strategy? Thus, those executives who prioritize finding and retaining top talent will thrive. What is your strategy and plan to succeed?

© Lisa Anderson 2012. All rights reserved

Take Milan’s the Duomo – what an amazing centerpiece for the city. Milan is the New York of Italy. There were far more business people walking about than in the other Italian cities we visited. As the center of business and fashion, you never know what interesting new style you’ll see walking the streets of Milan.

We also had a long conversation with a fabulous woman from Milan who is an advertising consultant. Although Italy has been in a recession, Milan is undoubtedly the hustle and bustle of business. Italy has an amazing train system which makes airline travel unnecessary. From anywhere in Milan, you can see the city center (the Duomo) – everyone walks in Italy. And, of course, they take their soccer very seriously!

It would be hard to avoid working with different cultures in business life. Take the time to get to know other cultures, and not only will you enjoy the conversations much more but you’ll be more likely to develop a stronger relationship and business partnership.

© Lisa Anderson 2012. All rights reserved.

I find it interesting that many managers do not have “time” to talk with employees about performance. The lack of time is not a resource issue; it is a priority issue.

How can we not dedicate a few minutes to our most important assets – people? I’ve continually found that those who value and provide constructive and positive feedback continually not only outperform their peers but have happy employees to boot! Similar to time, money isn’t a motivator; it’s only the lack of money that is a motivator. Instead, employees who are valued, appreciated and paid attention to tend to be more motivated – interested in the company’s success. After all, who isn’t interested in someone showing interest in what we’re doing?

Listen to my webinar about the importance of conducting a year-end review – and tips for success to kick off 2013 on the right foot.

So, what could be more important than discussing leadership essentials? In my 20+ years of experience as an entrepreneur, business consultant and business executive (and thanks to my HR mentor), I’ve uncovered the top leadership essentials required for long-term success. 1) Integrity. 2) Vision. 3) Communication. 4) Performance management

1. Integrity – It’s vital to start with integrity. Without integrity, none of the other essentials matter. A year or two ago, I did a survey of a dozen business executives on keys to success. I was surprised that every successful executive included integrity on the list. You don’t typically see this in popular business books or discussed at conferences yet it was one of the only essentials in common among the best leaders. Take note of the importance as there is no way to “train” or provide experiences to build integrity.

2. Vision - People follow those with vision. Enough said. How do you know if someone has vision? Do they seem to be confident about where they are headed? Do they share where the company is headed? Why it’s headed there? Do they seem passionate about it? If so, you’ve found a leader with vision.

3. Communication – If there is something in common across almost every client, it is the feedback of the lack of robust communication. Communication is bedrock to success. For example, if your team doesn’t know where they are headed, why they are headed there, how each person matters etc.; do you think they’ll be interested? I doubt it. Do you provide upfront communication? That’s not nearly as easy as it sounds. Do you make sure to ask for feedback? Do you continually clarify plans? Do you keep people in the loop? Communication alone can be a full-time job!

4. Performance management – Typically I try to limit my key points to three; however performance management cannot be forgotten. Assuming integrity is intact, those leaders who partner with employees to set goals, provide ongoing feedback, celebrate successes, track progress, and provide career planning advice will leapfrog those who don’t every time. The biggest roadblock I hear consistently is the lack of time. What could be more important? Make it a priority.
Not only will solid leaders never go out of style but they are also critical to achieving bottom line business results. Start by making leadership a priority. Without it, you might as well hang up your hat.