Catch the Wave on Customer Collaboration

September 26th, 2012

Customer collaboration is always a good idea; however, leveraging customer collaboration during challenging economic times can be one of the keys to success.

1. Pick up the phone – some of the largest successes I’ve seen result from simple yet critical conversations. It can be as simple as calling a customer to discuss current business and to stay in touch.

2. Win-win – remember to look for win-win opportunities in your conversations / meetings with your customers. Two heads are typically better than one – take advantage of already existing relationships to find win-win opportunities to increase business/ profitability.

3. Watch trends – although elaborate forecasting programs can result in increased business and/or improved efficiencies throughout the supply chain, watching and proactively managing to a simple trend line can many times be just as effective.

4. Joint programs – there are many opportunities to develop programs with your customers to share freight/ transportation costs, improve service to your joint end customers (if applicable), collaborate on packaging opportunities, improve efficiencies, tightly manage inventory, etc.

5. Think about value – instead of focusing on selling, think about how to provide value to your customers. How can you add value to your customer’s business? Focus on providing value and you’ll likely end up with win-win results.

How Important is Leadership?

September 22nd, 2012

There’s nothing more important! It is proven day after day with my clients – those clients with exceptional leaders will outperform those with mediocre leaders every time. Over time, nothing else matters as the exceptional leaders will attract talent, leverage strengths, address weaknesses etc.

So, what should we do to become and/or remain better than the competition?

1. Continualy build our skills – do you belong to trade organizations? Do you have a mentor? Do you belong to any groups of peers? Do you read articles, magazines, books? Does anyone tell you the truth? Have you hired an advisor/ consultant? Go to a training program – this can range from an executive program to a leadership class…

2. Retain your exceptional leaders and leaders with good potential – what are you doing to make sure your best people stay? Do you know what’s important to them? Do not assume! What experiences and training opportunities can you provide them? Do you have a mentor program?

3. Attract top talent – is your company one that would attract top talent? If not, what can you do to change it?

Volatility in the new Norm

September 21st, 2012

In today’s new normal business environment, volatility is the new norm. Change is required to remain competitive or to become competitive. If you manage change better than your competition, you’ll have the opportunity to leapfrog the competition.

In the last several years, I’ve seen a multitude of examples of companies going through change – the implementation of a new enterprise-wide system, a company sale process, a company turnaround, double digit sales growth, business process change and improvement, etc. This trend is only increasing as Executives realize that change is not only a necessary evil but is also required to support continued and improved business results.

Based on my experience with multiple companies in multiple industries in managing change, I’ve uncovered a few secrets that apply to all of them in how to manage change while achieving positive results. Communication is the obvious path to success; however, the secret is in the communication process, material etc.

1. Explain the whys. This might sound obvious but it is often overlooked. Begin by communicating about the change – why is it required? What if we don’t change? Why is it important to the company goals? Once people understand why, they can accept the change. I’ve found that the opposite of the common thinking of “people don’t like change” to be true – so long as people understand the change and are communicated with proactively, they are typically fine with change – and many are even excited about it.

2. Communicate the plan. It doesn’t matter if you have a detailed plan; just communicate the basics – what is happening, what are the likely next steps, how will the change affect them, etc. Don’t worry about what you don’t know. Just tell them what you know and what you are able to communicate at this time, and let them know that you will communicate as you know more – and do what you say you will do. If it is a sensitive subject matter such as a company sale, communicate what you are able to tell them and let them know that there are elements of the process that you cannot share but that as you are able to share additional information, you will. The critical part is that they know that you will communicate what you can when you can – this avoids the large issue that arises when people with missing information fill in the gaps with what they think (and it is almost always much worse than reality – and it definitely results in significant roadblocks to success).

3. Listen. Provide a vehicle for people to communicate their concerns, ideas etc. You don’t have to have all the answers; just listen. Listening is an undervalued and underused skill – use it! You’ll be surprised by the results – the key is to truly listen. Don’t think about your next appointment or what you’ll have for dinner. Focus your attention on listening.

I’ve heard feedback that these secrets sound “too simple”. My response to that is “great” – I’ve found that it doesn’t matter if it is simple or complex. The result is what matters, and these secrets “work”. Why waste time with a complicated and hard to understand process if you can achieve the same results or better ones following a simple one?

Operations Strategy

September 18th, 2012

I’ve been thinking a lot about this subject recently as I realized that the 80/20 of what I do for clients can fit into this category. Also, as my consulting strategy/ accountability partner says, it is an interesting paradox of strategy and execution which sums up what is essential for almost every client I meet.

Operations strategy doesn’t have to be complex. Actually most of the time, I help my clients develop an operations strategy that simplifies what they need to focus on in order to achieve their long term business strategy. For example, what’s most important in your industry or company? Is it customer loyalty? Lead times? R&D? And is your objective to provide a value to your middleman customer (if you have one)? Your end customer? Both? Can you do that while growing profitably? Have you thought about it?

Let’s say you have a strategy? Is it executable? Feasible? With current resources? Do you need to retain top talent? Hire new talent? Provide training? Experiences? Leverage ERP? How can you leverage existing assets?

There is a lot to think about in developing the optimal strategies – typically the best strategies are concise, simple, tie directly to your vision and are not created in a vacuum.

© Lisa Anderson 2012. All rights reserved

Top 3 Causes of Poor Inventory Management

September 14th, 2012

No matter why a client first calls, one of the challenges or areas of opportunity for significant gain stems back to inventory management. On the other hand, it isn’t too surprising as with manufacturers and distributors, a key to operational success is effective inventory management. Beyond that, it can also be a strategic opportunity with customer and supplier partnership programs.

Thus, I’ve had the opportunity to help multitudes of clients in a diverse group of industries with widely varying symptoms find ways to succeed with inventory management programs. As I was thinking about trends within my clients in preparation for sitting on a Distributors & Manufacturers panel, a few obvious trends emerged. The top 3 causes of poor inventory management include: 1) Culture miss-match. 2) Focus & skills miss-match. 3) An abundance of complexity.

1. Culture miss-match – There is no point in digging deep into how to reduce inventory levels while improving service levels from the traditional people, process and systems perspective if the culture dictates failure. I know it sounds strange as no executive would deliberately state that inventory and customer service are priorities while sabotaging success with incongruent cultural norms, yet it occurs frequently.

For example, one of my clients was dedicated to inventory management and even assigned an executive to focus on it yet had cultural norms in place that were in opposition to the strategic objective – the incentive systems were set up to encourage a P&L focus at the expense of inventory management. In another example, the executives had spent a bundle on a new ERP system to improve inventory management yet didn’t make progress due to cultural norms – even though metrics tracked inventory turns and service levels, 80%+ of the executives’ questions related to sales dollars.

To be successful, it is vital to begin with cultural norms. You don’t change a culture overnight but with focus, new examples and metrics, you can make an impact.

2. Focus & skills miss-match – I thought I’d continue with the next most frequent issue – the lack of focus and a skills miss-match. For example, if inventory is an important objective for your company, what does it tell the organization if you have a lower level position managing millions of dollars? As odd as this seems, it often occurs.

The skills required for inventory management can be a hard-to-find combination; however, it can mean the difference between success and failure. In my experience, the ideal person has not only a high level of analytical ability but also effective communication skills. Undoubtedly, planning and purchasing folks are in the middle of competing objectives (purchase price, production efficiencies, cash flow, sales requests etc.); thus, strong communication skills are a must! Do you have the right focus and people in place?

3. An abundance of complexity – If there is a common theme in not only inventory management mistakes but also in operational / supply chain mistakes, it is an overload of unnecessary complexity. Throw it out!

For example, trying to use the latest and greatest bells and whistles in your ERP system often times leads to chaos and confusion when a simple report or spreadsheet utilizing base ERP data would deliver 20 times the results. It isn’t that the system is “broken”; however, setting up and maintaining the variables in order to leverage full functionality are often times not only cost prohibitive but also beyond the skills of the people tasked to the job.

On the other hand, getting caught up in the latest concepts like lean seems like a no-brainer; however, unless you have the culture, people processes and systems to figure out how to implement effectively, you can end up with a much larger disaster than ever imagined (proven by a few of the companies I’ve worked with). Instead, think about what’s important, prioritize and simplify.

Last but not least, don’t get caught up in too much detail and forget the big picture. What is the demand? Pick up the phone and talk with your key customers.

I’ve decided that inventory management never goes out of style. As in football, if you don’t block and tackle effectively, you’re not going to be in the game.