Future-proofing Your Supply Chain

February 21st, 2020

Disruptions abound in supply chain circles. Just consider any of the following recent events: the tariff war, global unrest, the Coronavirus, natural disasters such as the volcano in the Philippines, the Hong Kong protests and more.

We have never had a client that could claim that 100% of the extended supply chain (from suppliers’ suppliers to customers’ customers) was inside the U.S. So, we have to be prepared to navigate these types of disruptions and the related impacts.

Disruptions certainly go beyond your physical supply chain. What about your human capital, technologies (accompanied with processes) and strategies? Refer to our article on future-proofing your skills gap and assess which risks might be on the horizon in your industry.

When it comes to technologies, there is no doubt that emerging technologies are gaining steam and are starting to transform supply chains. Just consider the application of collaborative robots, automation, RPA (robotic process automation), artificial intelligence, IoT, blockchain, and predictive analytics to name a few. Big name companies are dropping big dollars into these technologies. When thinking about strategy, remember strategy is no longer a multi-year exercise. We must be thinking in terms of strategic sprints. Who knows what will happen beyond a year out!

Several high-level categories should be assessed as you think about your supply chain:

  1. Sourcing – Are you sourcing from China? Is this a viable path forward to source 100% from China? There are increased risk factors to consider. Listen to an interview I conducted with John Tulac, international business attorney, on future-proofing and doing business with China. It is time to reevaluate your supply chain footprint.
  2. Logistics – There are significant disruptors transforming this industry, ranging from e-commerce and the the Omni-channel to robotics, additive manufacturing and the digitization of the supply chain. If you aren’t incorporating these impacts in future-proofing your supply chain, you will be left in the dust. These are concepts of focus for the consortium for logistics success in the Inland Empire to enable companies to stay informed and keep up with the fast pace of change.
  3. Manufacturing – Industry 4.0 is transforming manufacturing and changing the landscape. It will be a pivotal year that separates the winners vs the losers as advances are made. See what the National Association of Manufacturers’ Leadership Council sees as critical issues
  4. Demand & Supply – There is no doubt, there is a keen interest by business owners, executives and private equity leaders on creating predictable demand and forecasting sales. The more we understand our demand plan, the better our operational performance, supplier performance and customer performance. Read about SIOP (sales, inventory, operations planning) and how it can help future-proof this area.
  5. Inventory – As the disruptions abound and executives fear a slow-down, the proactive management of inventory and advanced collaborative programs are gaining in relevance. Pick up some tips and strategies in our recent article ” Inventory Management as Fashionable as Automated Intelligence for Distributors” for ACHR News.
  6. Metrics & Predictive analytics – Keeping a pulse on performance should remain a top priority while forecasting what will be needed.

Getting ahead of the curve might be the only avenue to success. Consider creating a resilient supply chain and future-proofing your supply chain. Stay tuned and read more about it, and If you are interested in discussing a supply chain assessment, please contact us.

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What Tours Have You Gone on Lately?

August 27th, 2018

In the last month, I have attended quite a few tours of manufacturing and distribution operations.  The pictures below were taken at an APICS Inland Empire and ProVisors tour of Southwest Traders Foodservice Distribution and Do It American Manufacturing.  Both were excellent.  And I walked away with great tips!

Tours are a great way to see different ways of doing business and gain insights and ideas to apply in your company.  I find that what I see and learn will provide value to clients somewhere down the line.  As often as I hear clients request a consultant with knowledge in their specific industry, I have found that we often-times provide even greater value when we can apply a concept that we’ve seen in a completely different industry that looks like it could be an ideal solution.

What Should We Consider and/or What Impacts Could Arise?
How recently have you gone on a tour?  You might want to start by going on a tour of your company.  As strange as it sounds, it can be eye opening if you take the view of an external tour and see what you observe.  Better yet, take others with you and see what they observe.

Beyond your facility, there are many options for tours of manufacturing and distribution operations.  You can go to customers and suppliers to better understand their operations. Not only will you gain ideas, but you’ll learn about companies that tie directly to yours and collaborate with supply chain partners.

You can also tour by joining a trade association like APICS (trade association for supply chain and operations management), the DMA (distribution management), ISM (supply management), CSCMP (transportation) and more.  Last but not least, why not ask friends and colleagues for a tour.

While you are touring, observe and ask questions.  You are likely to see new techniques, learn about new technologies, see different equipment (such as narrow aisle forklifts which we saw at Southwest Traders), observe robots in action (which we did at Do It American), discuss metrics and dashboards and much more.

Step out.  Take a Tour.  Learn from Others.



APICS-IE Symposium & Key Take-Aways on GROWTH

June 14th, 2018

Supply Chain Briefing

Our APICS Inland Empire chapter hosted the 12th executive panel and networking symposium (over 7 years) on the theme of “Managing Rapid Growth when Manufacturing and Distribution are HOT”.  We had a fabulous panel (clearly enjoying the conversation – see below) of manufacturing and supply chain CEOs and experts.  Thanks to the APICS BOD and Kash Gokli and the Harvey Mudd team for putting on such a value-packed day!

Overall, we discussed the power of manufacturing and supply chain in today’s environment.  In the era of the customer, it is all about the customer experience, rapid deliveries, e-commerce and responsiveness.  From that point-of-view, Southern CA has enormous opportunity since it is larger than all but 5 or 6 states in terms of population – and customers/ consumers! We also have access to technology, high-tech skills and more.  The tax law gives us additional great advantages. The only downer is the lack of support from the state California.

In addition, the panel talked about ways to thrive regardless of your circumstances.  For example, Mirna Elnar (CEO of Regal Spas) wanted to sell into Brazil but ran into horrible tariffs.  So, she collaborated with a local Brazilian company to achieve success.  Several of the themes boil down to the following: Innovation. Culture. People. Technology. Metrics.

What Should We Consider and/or What Impacts Could Arise?
First and foremost, we are in the “right” fields – manufacturing and supply chain (along with related disciplines such as IT/technology and Organizational development) are HOT and there is vast opportunity.   However, we must take advantage of the opportunity and have a voice! Would we prefer to leave our future up to the California lawmakers (for example) or take a proactive approach? Certainly our panel encouraged us to be proactive.

Think about your supply chain: How are you positioned in comparison to your customers’ locations, your end users (consumers, patients, or the base player in your industry such as Boeing) and how well positioned are you to create value-added customer experiences?  What do you expect to happen in the future? Are you still positioned effectively? Are you prepared for growth?

One of the most common issues our clients call about is unexpected demand: Are your products and services going to be in the right place at the right time, in relevant ‘packaging’ (meaningful to your customers’ current needs) at the right margins and cash flow?

Many of these questions go back to aligning your demand with your capacity, starting with your people.   It takes a minute to lose a customer – and a LONG TIME to win them back.

Keep innovation and future disruptors top of mind.  The last thing any of us wants is to come up with the best strategies and plans that are outdated by the time they are implemented!  If you’d like to talk about performing an audit of your supply chain positioning, contact us.



Kaizens & the Importance of Metrics

December 20th, 2017

My colleague and I led a Kaizen workshop on metrics last week with a process manufacturing client.  It is always interesting to brainstorm which metrics are the most relevant in tracking a company’s success.  They are NOT always the same.  Companies are in different industries; they are different sizes; the profit drivers of the business are different; executives’ focus is different…..and the list goes on.   

However, every business should take a few minutes to strategize on metrics.  Do you know what you are doing AND whether the metrics you are tracking are relevant to your success?

One tip to implement this week:
As we said in kicking off the metrics Kaizen, it can be a great place to start by taking stock.  What are you tracking already?  Why?  Do you make decisions based on the metrics you track?  If not, why not?  In essence, take a pulse.  Next, it can be quite valuable to gain feedback on what should be tracked.  Have you asked the people talking with customers on a daily basis?  How about those producing and shipping to your customers?  I bet they will have something to say!  Certainly, executives always have a wish list for metrics.  Do you know which metrics are on the list?  

Although you might be tempted to jump on the long list you are likely to generate in talking with all the stakeholders in the organization, don’t do it!  Make sure to understand the impact.  Which will lead to decisions that will impact customers?  Which are likely to drive profitability?  Start with a small number.  Prioritize and start using for decision-making before you move on.

 

 



Is Your Supply Chain Ready for Growth?

December 9th, 2017

Recently, we worked with a large, complex organization to provide an external assessment of the supply chain organization and how well it was prepared to support scalable growth.  It reminded us of the value of taking an outside view every now and then.  Whether you take yourself outside of your organization, hire a consultant or ask an executive from another division or trusted customer to take a deep dive into your organization, you’ll likely wind up with a few ideas – or, at a minimum, a confirmation that your i’s are dotted and t’s are crossed and ready for growth.

Growth has many challenges
It is MUCH easier to downsize than it is to grow successfully.  NOT more pleasant but it is simpler to cut back.  Unfortunately, we are all too familiar with this exercise.  Yet growth has many of the same challenges:

Cash is a constant challenge – by virtue of growing rapidly, you spend money in advance of shipping and receiving payment.  The quicker you grow, the tougher it can be without a line of credit especially for a smaller organization.

  • Are your people ready for growth?  What “used to work” might no longer be sufficient.  Have you prepared for these needs?
  • Can your operations keep up?  Do you have the resources, equipment, and support resources?
  • Suppliers are likely to be ill prepared unless they are in lock step with your growth plans.  Regardless of the preparedness of your team, nothing will occur unless your supply chain is aligned.
  • If caught by surprise, you can certainly throw resources at the issue but to achieve scalable growth, you should have thought about your processes, systems, metrics and more.  For example, determining that you’ve outgrown your ERP system as you “hit the wall” is too late.  It will take time to select the best system for your needs AND it will take between 6 months to 18 months to implement, depending on your size, complexity, ERP partner, scope etc.

Growth is a hot topic.  For example, according to our recent Supply Chain Briefing, McKinsey predicts 20% manufacturing growth by 2025.  However, regardless of your industry, if your company isn’t growing, it is dying.  We have NEVER seen an organization “stand still” and “maintain” successfully.  Have you?  Thus, growth is core to success.  

Plan or After-Thought
The key is whether it is a plan or an after-thought.  Which is it for you and your organization?