Communications Rule!

December 26th, 2013
Communications rule!

Too busy to communicate? Research reveals that communications skills are lacking in the manufacturing and distribution workers.

As much as we, in the supply chain business, know that communication is critical, we often ignore this key area. We are swamped with daily work, getting the month’s sales shipped out, learning the latest technical gadget etc., and our communications go by the wayside.  In my recent skills gap survey in combination with APICS Inland Empire chapter, we found communications skills to be lacking. So what are a few tips for communications success?

1. Repetition – In today’s information-overloaded society, we cannot pick up on all the information we receive. If you plan to be heard, you must repeat important messages. There are varying studies; however, the bottom line is repetition is essential.

2. Varied formats – Repetition alone can just be annoying. To be successful you must vary your communication mode. Do you write it? Speak it? Illustrate it in Power Point? Hold a group meeting? Post on the website?

3. Listen first – Successful communicators listen FAR more than they talk. Do you listen carefully to what people are saying? Do you let them know you are following along? Do you paraphrase? I’ve found people can think I’m a master communicator when I say 5 words – solely because I’ve listened.

4. Talk about the why’s – One of the keys to communication in the workplace is to explain WHY the topic should matter to the recipient.  WIIFM!  I find that when employees understand how they contribute to value, communication suddenly improves from the listener’s perspective.

5. Stick to the big picture – Don’t go into all sorts of details that will likely confuse meeting attendees. Stick to the big picture and impacts.  Pictures and graphics will help with this objective.

6. Be succinct:  Less is more.

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Project Priorities for Success

December 19th, 2013

To be successful in business, you must be able to pinpoint and act upon your company priorities.

As a business consultant and former VP of Operations who has led and participated in hundreds of logistics and supply chain projects, I have yet to find a company without project management challenges. Yet the organizations were dependent on project results occurring – often, results were built into budgets.  Thus, there is no room for error!  Can you afford weaker sales results?  Margins? Cash flow? New product development?  Undoubtedly, no!  Thus, you must pay attention to what will ensure success.

There are several ways to ensure success and achieve your projects’ projected bottom line business results; however, as with any solid management system, you have to start somewhere.  Thus, it makes sense to evaluate priorities.  In my experience, the top three priorities include: 1) Set the project up for success. 2) Plan. 3) Execute.

1. Set the project up for success: The first key to success is to define the project and put together the appropriate team. Although this sounds incredibly easy, it is often overlooked in importance. Has anyone been assigned to a project, not understanding the objectives of the project and the amount of time required for the project? Of course! This step will solve those issues.

The critical success factor is to define the project so that it can be clearly communicated to the project team and the organization. It doesn’t have to require a complex project charter that buries the team in paperwork. Instead, keep it simple – define in understandable terms what the project is about, what it will accomplish, and why the company chose to pursue the project. Make sure that the team fully understands the project and how their participation relates to the success of the project. And, finally, do not forget to communicate to the organization, as this is often an overlooked, yet fatal error – the organization will need to support the project with resources, information, etc.

2. Plan: The second key to success is to take the time to plan. I’ve found that although most companies have good intentions, they rarely take the time to plan. There is always something more important or another crisis that arises. Instead of allowing your project to be derailed, it is vital to take a step back and put together a plan.

It doesn’t have to be complex and time consuming. It doesn’t have to utilize the latest project management software and consider complex equations for calculating resource times. Again, keep it simple. A scratch piece of paper is ok, if it is understood and communicated. The most important point is to decide what steps need to be completed, in what order (if order is important), how long the steps will take if x number of resources are dedicated to the task, and which steps are dependent on which other steps. You will now be ahead of the majority of companies – you have a plan!

3. Execute: The third key to success is to execute the plan. In my experience, I’ve found this step to also be often overlooked since it seems simple now that the plan has been developed and the people assigned. Executives tend to lose interest once the project is turned over to the execution team; however, this is the opposite of what’s required for success. Even though it seems obvious, as conflicts arise, without senior leadership, the project will flounder.

Typically there are only a few critical steps required for success in the execution stage: 1) staying focused on the critical path, 2) follow-up and 3) communication. Instead of focusing on every step, focus almost exclusively on the critical path (the sequence of steps that must be completed on schedule for the entire project to be completed). This seemingly simple focus works wonders in keeping your project on track. Second, follow up on those critical steps. For example, instead of waiting for the time when a critical step is scheduled to start, begin focusing on the step in advance. Make sure the resources are available, ask questions of the task owners, review the plan for those steps, etc. Lastly, remember to constantly communicate progress, roadblocks, etc. With these few simple steps, I’ve yet to see a project management execution failure.

Since projects can have a substantial effect on your organization through increased productivity, profitability, cash flow and service, it pays to think about the three critical priorities to delivering project management success. No matter your role in a project, you can begin to implement these keys – and you’ll deliver bottom line results!

Is On-the-job Training Enough?

December 19th, 2013
Skills gaps manufacturing

On-the-job training is rarely enough! In a survey conducted by my firm, LMA Consulting Group Inc. in conjunction with the APICS-Inland Empire chapter, it was found that on-the-job training is the most frequent methodology used to train workers yet 87% of manufacturers and distributors surveyed are experiencing a skills gap.  What else can be done?

In my former career as a VP of Operations for a mid-market manufacturer, we frequently utilized on-the-job training as it seems to be low-cost and quick to implement; however, it is not as it appears.  In my experience in working with multiple clients across many industries and geographies, I’ve found that the majority of on-the-job training can loosely be termed training.  It’s easy to fall into that trap as it seems the easiest way to get employees up-to-speed with existing resources; however, no one has extra time to train properly and it is rarely planned effectively.  I’ve fallen into that trap too so I know it’s easy to do; however, it is unacceptable – you spend more time, resources and money “trying to save money” than if you invested wisely.

Instead, what I’ve found to be effective is a smart combination of a pre-planned on-the-job training and development programs for those items which need to be integrated into the process with other education options.  To determine which training and education options to use, it is vital to take a step back and determine which types of skills and behaviors need to be developed for each employee.  Only then can the “right” comprehensive program be established.  Some folks need technical concept training – in these cases, APICS classes or community college technical training can be a great value.  However, they’d be useless for someone who knows what to do but who is unable to communicate it to his/her boss.  In that case, a communications class might be in order or a mentor type process could be preferred which could be something like Toastmasters.

Partnering with potential training partners is a smart move in today’s new normal business environment.  It would be rare for every situation to require one type of training program – or every employee to learn in the same way.  Thus, it makes sense to build relationships with several training options including groups such as APICS, community colleges and extended education partners, higher education partners (they are branching out more and more with projects to partner with the community), self-study programs etc.

The complete Manufacturing and Distribution Skills Gap report will be available in December.  To automatically receive the free report when it is available, register here.

Employers that offer training and education are more likely to retain top employees – will you jump on board or be left in the dust?

The 4Ps to Collaborative Customer Program Success

December 12th, 2013
When connecting people and process, think about using customer collaborative programs to link strategy with execution.

When connecting people and process, think about using customer collaborative programs to link strategy with execution.

Collaborative customer programs are becoming increasingly popular in today’s new normal business environment. Customers such as Cardinal Healthcare, Boeing, and the like are searching for ways to partner closely with suppliers in a way that will achieve a win-win result. There are numerous examples of these types of programs – of course, they are all termed something different such as VMI, consumption-based ordering, auto replenishment, forecast and replace, and the list goes on. Yet the end result is the same: improve service and efficiencies while decreasing lead times and inventory investment.

Why Bother with Customer Programs?

I’m a supply chain and operations consultant and former VP of Operations and Supply Chain for a mid-market manufacturer and have implemented numerous collaborative customer programs which have resulted in dramatic improvements in service, cash flow and cost. For example, during my tenure at PaperPak, an adult incontinence manufacturing company, we achieved the following successes with our #1 customer:

  • Recognized by #1 customer as “supplier of the year”
  • Increased sales
  • Became “part of the customers’ organization”
  • Doubled inventory turns
  • Improved customer service to 98%+
  • Reduced lead times and improved costs

Since then, I’ve partnered with several clients to achieve these types of results. Over time, several keys to success emerged: 1) People. 2) Partnerships. 3) Process 4) Provider

1. The first key to success is people
The right people are your #1 asset. First, senior leadership can make or break any collaborative program. As with any substantial undertaking that crosses functional lines, senior leadership must provide commitment and support, have a high level understanding of the value that can be achieved through the program and be able to explain the whys. Thus, the key resources’ individual goals are tied to the big picture and tools and support are provided. For example, in every customer program, there is some sort of upfront cost, inventory investment, resource investment, etc. (even if it provides a 20:1 return, an upfront investment / process change can be a hurdle); thus, if support doesn’t exist, the program would never get off the ground.

Second, the right planner is critical. I discovered this the hard way a while back. After putting the wrong person in the role, I quickly discovered the importance of finding the right person with the right skillsets for the position. This position requires a delicate balance of analytical skills, customer service skills, communication skills (as planners are always at the center of competing priorities), logistics skills, and financial skills.

2. The second key to success is partnerships
This is back to point #1 – the right people; however, this is in terms of the right people and partnerships with customers and suppliers. The definition of a partnership is simple – ‘win-win’. To create a successful collaborative program, it requires a close partnership with your customer. The ingredients for a successful partnership are trust, the ability to find and create win-win ideas, a focus on collaboration in terms of customer demand, goal setting and metrics scorecard reviews. The same holds true for your suppliers. View your customers and your suppliers as an extension of your company and supply chain. With a partnership, you should be able to turn 1 + 1 into 5, meaning your returns will be exponential over what you will achieve on your own.

3. The third key to success is process
To ensure flawless execution and customer service, process is king. Rigorously following the traditional plan, do, check, act model can yield significant results. It has been shown that although the majority of people spend the majority of their time on the “do” of plan, do, check, act model, the successful implementers spend a very small portion of time (10%) on “doing,” Instead, it is plan (70%), do (10%), check (15%), and act (5%). As this implies, follow-up/ audit is also essential for success – it is how metrics review, best practices and continual improvement is built into the process.

4. The fourth key to success is provider
Last but not least, the software tools and provider supports your people and process. For collaborative programs, this can include EDI (electronic data interchange), forecasting and VMI software tools. For example, I discovered that after utilizing multiple software suppliers and discovering the keys to success through trials and tribulations, it is apparent that bells and whistles do not = success. Instead, what really matters is the following: 1) a partnership approach, 2) the right combination of functionality, flexibility and cost and 3) forecast features.

After these fundamentals are in place, you can drive additional efficiencies and customer intimacy through continuing to focus on the 4 Ps. When connecting the people and process elements, think about using customer collaborative programs as a strategy to link strategy with execution. The benefits will continue to grow as the elements of customer collaboration are implemented throughout the supply chain. As you expand, your results will grow exponentially – increased customer partnerships and intimacy and improved margins and cash flow.

Hot Supply Chain Trends

December 10th, 2013
Noticing hot supply chain trends first is a great way to leverage emerging trends and stay ahead of the competition.

Noticing hot supply chain trends first is a great way to leverage emerging trends and stay ahead of the competition.

An often overlooked secret to success is to be a front-runner in identifying and leveraging emerging trends. Since I work with manufacturers and distributors from small to large and local to global, it behooves me to pay attention to what is in common among my best clients. Undoubtedly, those who jump on the “right” opportunities leave the competition in the dust.

Supply chain has been gaining momentum in executive suites around the globe. According to PwC’s Global Supply Chain Survey (2013), when organizations focus on supply chain excellence, they can achieve 70% higher performance. Thus, paying attention to the emerging supply chain trends can be not only interesting but also can result in increased business performance. The top few include: 1) Demand driven. 2) The Amazon effect. 3) Collaboration remains cornerstone. 4) Leverage supply chain technology. 5) The skills gap.

1. Demand Driven: Over the last few years, demand driven supply chains have been gaining popularity. But what does it really mean? I’ve found the essence to be simple – start with your customers’ demand.

Throughout my 20+ year career as a global business consultant and as a VP of Operations & Supply Chain, I’ve been responsible for, involved with or partnering with clients to improve demand and supply planning results, and so this topic happens to be in my sweet spot. Undoubtedly, demand driven supply chains are the wave of the future.

It can start off as simple as thinking through historical forecasts and expand in complexity and collaboration from there. The best companies are providing demand data from deeper in their supply chain and working on collaborative planning programs such as auto replenishment, vendor managed inventory and collaborative ordering programs. It doesn’t have to be complex – start by picking up the phone to talk with your customers.

2.  The Amazon effect: I spoke on a panel earlier this year entitled the Amazon effect, and it has become a term thrown around in conversations. Amazon’s plans are to have a distribution center within 5 miles of most major U.S. cities – a game changer! And, didn’t we just hear that Amazon and the US Postal service have teamed up to deliver on Sundays! They are taking service and e-commerce to the next level.

Customers expect to be able to shop 24/7 and gain exceptional service along the way. Manufacturers and distributors better get on the bus before it passes them by! How can we set up our warehouses to handle bulk, piece parts, etc.? What technology do we need to ensure full integration so that we can achieve shortened lead times? If there is one item in common among all the executives I work with, it’s that no one has time. We must take time out of the equation, just like Amazon is doing.

3.  Collaboration remains cornerstone: An often overlooked secret to success is to collaborate. Start in your company – do you partner with other functions in your organization? Simple programs like S&OP (sales and operations planning) create a process of collaboration and yield substantial results. How about internal best practices?

Beyond internal opportunities, we have the ones most discussed at manufacturing and distribution conferences – supply chain collaboration programs. Imagine what can be achieved by partnering with customers and suppliers. I’ve seen collaborative R&D programs yield margin improvement and increased sales; collaborative planning programs yield substantial cash flow increases in combination with efficiency improvements; and the list goes on.

4.  Leverage supply chain technology: Although one of my service lines is to help clients select the optimal system that aligns with their business objectives, I am not a fan of technology for technology’s sake. I often see clients get tied up in a maze of complication while accomplishing nothing – or worse, service declines which is the kiss of death.

On the other hand, the clients who carefully select the appropriate technology to support their business objectives and leverage the core functionality to dramatically improve results are able to leapfrog the rest. Technology is an enabler. For example, consider the following popular technologies which can achieve significant leverage if utilized strategically – e-commerce, CRM software (customer relationship management), advanced planning systems, warehouse management systems and supporting technology etc.

5.  The skills gap: My APICS (the leading professional association for supply chain and operations management) chapter recently hosted a symposium on the skills gap as it is prevalent with the manufacturing and distribution companies in the area. As supply chains have become complex (extended in length while considering items such as risk, technology etc.), it has become harder and harder to find top talent.

Especially as the skills gap worsens as folks continue to leave jobs for greener pastures for the first time since the recession and as the baby boomer generation begins to retire, those companies who are ahead of this critical issue will thrive.

Observing supply chain trends is important but it is bedrock to success to develop strategies and plans to utilize this information in a way that will help your business succeed. Do you have a team in place to think about how to leverage the top supply chain trends?

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Supply Chain Strategy: Formula for Success