A Once-in-a-Lifetime Opportunity for Manufacturing, Logistics & CA to Align

July 15th, 2019

Last week, I went to the California Capitol building as a part of the Inland Empire Economic Partnership’s (IEEP) regional leadership academy. It was interesting to hear how the process works. I also am also representing the IEEP’s Logistics Council as it relates to moving forward with the Brookings report recommendations to create a consortium of logistics and advanced manufacturing excellence in the Inland Empire.

We are positioned ideally to scale up and partner with industry, academia and government/non-profit partners to achieve this once-in-a-lifetime opportunity of aligning seemingly disparate goals of manufacturing, logistics, California government and the federal government’s interests to achieve a win-win-win-win. Wouldn’t that be a feat!

The idea is simple. The Inland Empire’s predominant high-paying professions include logistics and manufacturing. The IE has been outpacing all of California in job creation due to these industries yet they are not typically supported (to say the least!). Since they are contributing vitally to the IE community and jobs, we have the cards stacked in our favor:

  • IE logistics is #1 in the U.S.
  • IE manufacturing is strong and vast (SoCal is #1 in manufacturing in the U.S.)
  • The IE has access to great talent in the local and surrounding area universities (CSUSB, UCR, Drucker, Harvey Mudd, Cal Poly, Redlands), community colleges (Norco, Chaffey etc.), and partners such as GA Tech
  • And, the IE is in the unique position to leverage advanced technology to increase customer value, improve profit and create clean technologies as a win for the environment, X.

Thus, we are scaling up and collaborating for success.

This opportunity didn’t just fall into the IE’s lap. The leaders saw potential and ‘went for it’. Are you looking for opportunities?

One tip to implement this week:
In our work with clients, it is commonplace for clients to ignore vast opportunities such as this exciting initiative. There are always roadblocks, different interests, money flows to address and lots of other issues that arise. The key question is whether you are looking at each issue as a detriment or if you see the big picture and train your eye to ‘see’ a successful path forward.

Recently, our APICS Inland Empire chapter had the opportunity to provide training and education to Target (thanks to our partnership with the University of LaVerne). When the opportunity arose, we didn’t know how we would scale up and fulfill it successfully. However, we took the leap of faith to create value and had the confidence that we’d figure it out.

At first, we were worried about executing against our commitments.  Yet, it all fell into place. It forced us to be a bit more creative.  So, when the next leap of faith opportunity arose to provide manufacturing and logistics education to high school students to help bridge the gap to a profitable career, we went for it. We continue to evolve as we go but it has allowed us to make a difference in a way we would never had pursued or been involved with previously. Are you taking a leap of faith?



How Customer Service & Retention Directly Impact Profits & Performance

July 12th, 2019

Since I’ve been speaking to CEOs about “Pricing & Profits”, the true impact of customer service and retention is arising as a game changer. Can you create a situation where you make a “forever promise” to your customers? It certainly will directly impact your customers’ perceptions of your value and your bottom line!

The statistics are staggering:

  • According to Bain & Company, increasing customer retention rates by 5% increases profits by 25-95%
  • According to Harvard Business Review, it is anywhere from 5 to 25 times more expensive to acquire a new customer than to keep a current one.
  • According to Salesforce, 74% of people are likely to switch brands if they find the purchasing process too difficult.
  • U.S. consumers are willing to spend 17% more to do business with companies that deliver excellence customer service
  • According to Newvoicemedia.com, after one negative experience, 51% of customers will never do business again with that company.

Do you know how your company is doing?

 

What Should We Consider and/or What Impacts Could Arise?
Clearly, in reviewing the statistics, we should all be ultra vigilant about customer service and the customer experience.

Where do we start? In our experience, our best clients understand their target customers and what is meaningful to them. The customer experience has to start there. It is easy to get carried away with measuring on-time delivery, customer complaints and other metrics but what does that really tell us? Do our customers simply want a reliable delivery estimate and someone to pay attention to ensure success or do they want a tailored, customized customer experience? Are we getting complaints from our unprofitable customers and silence from our best customers, and therefore focusing in on the”20″ of the 80/20 equation? It happens more frequently than you’d think!

Once you know what is meaningful to your key customers, define a way to measure your success in achieving your objective. Perhaps use the net promoter score as it is one simple question that speaks volumes: How likely is it that you would recommend [brand] to a friend or colleague? As you explore why, you’ll find ways to increase the value of your customer experience to your key customers. Certainly, customer service is a critical topic in creating a resilient supply chain. You’ll find more information on these types of topics on our resilient supply chain series.

 

 



How Are You Keeping Up?

July 9th, 2019

In today’s Amazon-impacted, data overloaded world, it is one BIG challenge to just “keep up”. How are you keeping up with the latest industry trends, noteworthy products, emerging technologies and more?

It would be easy to spend 40 hours a week just “keeping up”. Of course, I wouldn’t recommend that as your competition would be happy to speed on by. However, this idea got me thinking about how executives should “keep up”.

Time isn’t a resource. We cannot make more time. On the other hand, time is a matter of priority. When we answer, “I don’t have time for that,” it means we aren’t prioritizing that topic or that person. We cannot prioritize everyone and every topic including how to stay up-to-speed.       

A few recommendations for executives to stay up-to-date on relevant information without taking “too much” time:

  • Make it a priority for your team to stay up-to-date.  If each of your team members is up-to-date on relevant information for his/her area, it will be half the battle. Ask for a bullet point summary of highlights.
  • Talk with customers.  One priority you cannot delegate is a certain amount of customer interaction and discussion on trending topics. How else will you steer the ship?
  • Attend key industry conferences. Typically, there is a flagship industry event our clients attend. No matter how busy, make room in your schedule to attend, meet with customers and suppliers and find out what is trending.
  • Focus some attention on your strategic differentiation. For example, a few clients are expert at sourcing. Thus, they better put some focus on this topic. Others are expert at manufacturing, e-commerce or a technical topic. Stay abreast of key trends.
  • Skim industry articles & the Wall Street Journal. Staying current on key events and how they could impact your industry and your company is essential.



When Is It Time to Upgrade?

July 5th, 2019

A Client Question
A client didn’t feel prepared to launch into an ERP system upgrade as they had just bought the business and had invested significant funds into the transition.  Yet, this client was also starting to worry about scalability and the risk associated with old technology. After all, this old technology was directly supporting their day-to-day business and customer experience. Although the CEO was reluctant, he agreed to an assessment of his ERP system and readiness.

The Answer
In their case, they needed to upgrade to modernize their technology infrastructure and gain additional functionality that is required to support their business growth and meet current standards. However, we found a way to make small key improvements to their ancient system to support enough progress to ‘buy time’ for the teams to gain an understanding of process disciplines required to support a successful upgrade. It also gave them time to educate the workforce.

During the next year, significant efforts were made to roll out process improvements and system functionality to standardize functions such as pricing and raw material ordering. About a year into the process, we “hit a wall” in terms of the ERP capabilities with critical functionality considered a “must” in supporting the business. Thus, we were prepared to make a quick selection of an ERP system and partner and eventually gained corporate alignment to pursue the upgrade to support continued growth and profitability.

Food For Thought
We are often asked to look at ERP systems that clients think they should throw out.  It turns out that that were perfectly fine and scalable, just poorly implemented.  We usually aren’t asked to look at ERP systems on their last leg where we had to make a strong case to executives to even look at the topic. And whether a new system was needed or not, the organization might not be prepared. Determining whether there is time to prepare or whether you should follow a rapid preparation route can be tricky. There are typically risks on both sides, whether you move too slow or too fast. Take time to assess what makes sense in your case. Be careful of ‘shark’ salespeople as there are tons in this field. It is quite confusing so that even well-intentioned executives and salespeople can mislead organizations. If you are interested in running your situation by us, contact us.

Did you like this article?  Continue reading on this topic:

ERP Selection: Why It Has Become a Strategic Priority



The Amazon Effect is Still Going Strong!

July 1st, 2019

The Amazon Effect remains top of mind with CEOs. Whether they compete directly (which is less than 1% with my clients), supply or distribute for Amazon (which is a slightly higher percentage) or are just impacted by the Amazon Effect, it is a major source of concern and/or opportunity. Have you thought about what Amazon is doing lately and how it might impact your business? Better yet, have you thought about becoming the disruptor?

Here are a few of the latest headlines about Amazon (all in the last few days):

  1. Kohl’s will accept Amazon returns across the board starting in July – The pilot programs in Los Angeles, Chicago and Milwaukee have been successful. Kohl’s and Amazon see this as a win-win.
  2. Amazon announced that one-day free shipping will be the standard for Prime members – It is very hard to go backwards once you get accustomed to a new level of service. All organizations watch out!
  3. Amazon is interested in buying Boost from T-Mobile and Sprint – There is no telling what Amazon is thinking of disrupting next.
  4. Amazon seems to be saying it isn’t a retailer – It appears as though the threat of Amazon purging thousands of smaller vendors from its core business is coming true. Stay tuned…
  5. Amazon makes a big splash in the travel industry – In India, Amazon will offer flight booking services.

Amazon gets a ridiculous number of headlines. In the interim, one of the last Sears stores in Phoenix had a massive closeout sale recently. Sears used to be the Amazon of the times 50 years ago but lost its way with a few strategic missteps and lack of innovation. Waiting around for Amazon to determine your course is not a wise move. Instead, think proactively about your strategic advantage and how you’ll get out in front of the crowd.

Think about what Amazon and other competitors do not do well.  Find a way to capitalize on these opportunities. Of course, you’ll have to adhere to the new model of doing business – rapid deliveries with short lead times and high tech opportunities.  Find what is unique to you and your product or service and drive differentiation in your market segment.

We find that there is significant change occurring across the board. Perhaps the reason some companies are vertically integrating is to do what Amazon cannot do completely at this point: take control over the complete supply chain. Amazon seems to be pursuing this strategy as well when it comes to transportation infrastructure although last mile delivery is quite the challenge. If you’d like to get an assessment of your business and profit opportunities as it relates to the Amazon Effect, please contact us.

 

Did you like this article?  Continue reading on this topic:

UGG Founder, the Amazon Effect in Healthcare & Why Demand is Key

The Resilient Supply Chain: What If You Sell More?

 

2019 Predictions Document

Find out how pricing relates to 2019’s predictions. If you missed our 2019 Predictions Document, download yours here:

 

 

Do You Have a Resilient Supply Chain?

Do you have a resilient supply chain? In today’s disruption-intensive business environment, a resilient supply chain is a “must”!

Find out how to navigate disruption and achieve peak performance.

Check out our new video & articles series