Life Balance

November 17th, 2014

supply chain

I just finished a birthday celebration for my niece (in essence). My parents, my mom’s sisters, my uncles, my cousin, my brother and I got together for some great pizza (Spinato’s pizza in Scottsdale is my favorite!) to celebrate Mia’s birthday. She loved her American Girl doll with many changes of outfits….you cannot have too many! And my mom got cheesecake and cupcakes to top off the evening.

I find that it is too rare that families get together like they used to. Well, I don’t know how typical it used to be; however, we saw my grandparents at every birthday, holiday, etc. One of my aunts lived down the street for many years, and it was great fun growing up close enough to walk over. I remember she used to make pancakes in the shape of animals. Another aunt came by weekly when I was in high school to take my best friend and I to the movies. Another aunt had me over to play tennis etc. And my aunt from my dad’s side started me on a collection of dolls of my nationalities. My mom’s best friend who we also considered an aunt was always full of fun surprises when she came over – making bizarre foods, ice cream etc.  

Whether you spend time with family or just get away with friends, remembering the importance of life balance can be essential not only to personal fulfillment but also to creative success at work. 

One tip to implement this week:

As we head into the holiday season, think about how you can make sure life balance remains a priority. Pick up the phone and call a relative or friend you haven’t talked with in a while. Make time to let your family know you care. Compliment a co-worker. Smile. The “little things” can go a long way.

Looking for more ideas to keep your supply chain talent? Access more tips and resources on my blog. And keep connected by subscribing to my newsletter and email feed of “I’ve Been Thinking…”


Tips for Physical Inventory Success

November 13th, 2014
inventory management

Completing a physical inventory is a necessary part of inventory management because accuracy doesn’t just happen, it needs to be achieved.

Inventory accuracy is cornerstone to success. It is a bedrock topic to improving service levels, reducing lead times, increasing margins, improving efficiencies, reducing inventory levels….and the list goes on.  Although I recommend implementing cycle counting programs as a way to replace physical inventories, there are times when a physical inventory is a must. Thus, it is worth thinking about a few tips to successfully complete a physical inventory.

1. Prepare, prepare, and prepare: 80% of your success is in preparation. Organize the warehouse, clearly mark areas, label exceptions, complete and review system transactions, etc.

2. Stop/isolate movement: When you begin your physical count, stop all physical and system movements and transactions. This is a critical foundation – similar to building a house, if you start adding windows prior to finishing the walls, the house might begin to fall apart.

3. People and communication: Make sure the right people are in the right jobs for their skill sets. And, communicate, communicate, communicate. Make sure everyone has clear instructions, understands how to get questions answered, etc.

4. Manage the control desk: This is the term I’ll use for the team organizing and controlling the process – the Grand Central Station hub. Typically, this person/team keeps track of count sheets, makes sure everything “adds up”, answers questions and keeps the process moving.

5. Metrics/tracking progress: Putting the key metrics and vehicles in place to track progress is cornerstone to success. By reviewing these metrics, the leader can review progress, make adjustments as required and keep the process on track. Metrics also provide for a way to measure success.

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Bedrock Topic: Inventory Accuracy


Inventory Velocity

November 11th, 2014
inventory velocity

By implementing a SIOP process you’ll be in a better position to leverage your resources for a speedier inventory velocity.

Inventory velocity not only accelerates cash flow but it also can contribute to margin improvement. How do we turn inventory faster and keep our money in motion vs. stagnating in the back of our warehouse?

One of the best ways to keep your inventory moving is to put a SIOP (sometimes known as S&OP) process in place. The better picture you have of your demand plan, the better you’ll be able to align that with your master schedule, production plans, detailed schedules, purchase plans, capacity capability requirements, staffing and skill requirements, and sales plans. Aligning these people, processes and technologies with the overall business strategy while optimizing among competing priorities will drive inventory velocity.

For example, at Transtar Metals, we implemented a sales and operations planning process and drove rapid improvement in inventory velocity. In this case, the reduction in inventory levels not only freed up cash but it also was a contributing factor in a higher valuation for the business and ultimate sale.

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Strategy is “Easy”; Execution Distinguishes Leaders

November 6th, 2014
project management needs leaders

Projects can fizzle out just after the strategizing stage. Project management takes strong leaders to see it through.

It is interesting to sit back and watch as companies spend millions of dollars on strategy formulation, just to achieve minimal results due to poor execution. Yet, the process repeats constantly – more money is dumped into strategy formulation, 3 ring binders, fancy Power Point slides, etc. On the other hand, I’ve found that strategy doesn’t fail in formulation; it fails in execution.

So, why not focus the resources on execution? In my experience, it might be due to the fact that execution isn’t viewed as the exciting or “high-level manager” activity. Give me a company that is excellent at execution with an “ok” strategy anytime vs. a company with an awesome strategy with “ok” execution. This is the same reason that 70-80% of mergers and acquisitions fail to achieve the intended results – they typically fail in execution.

The key to successful execution is to align execution to strategy and keep that focus intact while also elevating the execution of the strategy as an executive priority.  So, what is the key to execution?  1) People 2) Process.

1. People: As my HR mentor says, “the ‘right’ people are your #1 asset”. In my experience, I’ve found that if the right people are in place, the execution of the strategy succeeds. It is as simple as that. Why? The right people fully understand the strategy – they ask questions, find out how it fits in with current processes, what it requires vs. current skill sets, roles, etc.

Once they understand the strategy and end state, they help the employees, customers, suppliers, and any other key parties understand the end state, why it is important to the company, how they fit in, etc. I’ve found that once people understand where they are going, why they are going there, how they fit in, and how they provide value to the vision, a successful execution follows. Who better to figure out the details of how to get to the vision end state than the people deeply involved in the day-to-day work required to achieve it? I’ve also found that company culture is a key to success, as the cultures that value people and see people as a #1 asset vs. a number, are the ones that will be better equipped to execute strategy successfully.

2. Process: Next, process is a close-linked second. People execute with processes. It is key that well thought out processes, systems and plans are utilized in execution. Otherwise, chaos ensues. For example, I worked with a team to reduce manufacturing waste in two, completely separate plant environments within the same company – one entrepreneurial with limited process knowledge and one highly process driven yet inflexible.

At first, the environment with limited processes had bouts of chaos – it is hard to figure out the cause of manufacturing issues if you have no systematic way of analyzing the situation. On the other hand, the highly process-oriented environment had significant issues in running a product typically run in the other plant, due to a lack of people with the skill sets and knowledge in the entrepreneurial aspects of running the product line. After a bit of trial and error and debate about people vs. process, we found that the “winning formula” was to value the right people/team (it was especially helpful to bring the two cultures together to leverage the best of both) “and” to value processes – develop standardized processes, document and measure, perform root cause analysis, adjust and start again. By combining the best people and solid processes, we were able to achieve significant waste reductions, which flowed straight to the bottom line.

By focusing on people and process vs. debating the fine points of strategy (in essence, go with the 80/20 of strategy formulation), you are much more likely to have a successful strategy execution. And, even if it isn’t as exciting as debating the fine points of strategy, it is what will give your company a leg up on the competition, which is becoming more and more critical in the current, global business environment.

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Collaboration Platform: Valuing Team Input

November 4th, 2014

Collaboration along the supply chain injects a steady flow of new ideas and solutions — key drivers in the quest for bottom line results.

At the APICS 2014 International Conference, one of the keynote speakers was a futurist.  He talked about the importance of a collaborative platform.  I say – finally! I still remember one of my colleagues who questioned me about my articles about collaboration; not because he didn’t agree (as he is the collaboration guru in purchasing and supplier management) but because he wondered if I had clients who actually believed in collaboration.

Collaboration will drive bottom line business results. If you look at collaboration as a way to combine 1+1 = 99, you’ll achieve dramatic improvements and happier employees and supply chain partners.

For example, at PaperPak, we collaborated with customers and suppliers in order to design new materials and new products that achieved a “win-win-win” – better product performance for the customer, better cost structure for us, and an innovative new material for our supplier. It led to over a million dollars in savings.

There are a few strategies to ensure success with collaboration:  1) Avoid being a know-it-all 2) Seek out diversity.  3) Look for the “and”.

1. Avoid being a know-it-all: Lately I’ve been working on several different projects.  It’s interesting how much more successful the project results are for those projects where the leader believes in collaboration than those where the leader “thinks he/she knows”.  Even good, smart people fall into the trap of thinking they already know and devaluing input from those who might be in lower positions. A key to the dramatic results I help clients achieve is to listen for and find those people with good ideas who are being ignored. Unfortunately, it is easy to do in the vast majority of clients.

For example, I remember one medium-sized manufacturing client who wanted to fire one of their only experts with knowledge on a few topic areas because his value seemed unclear. Luckily I convinced them to keep him, and he went on to be an integral team member on one of our improvement projects that delivered not only critical customer performance improvement but also millions of dollars of margin improvement.

2. Seek out diversity:  Look for people with different strengths to collaborate with. It might be more natural to look for people more similar to you and who you prefer to spend time with; however, if you find folks who can add value in areas where you are weak and vice-versa, you’ll deliver substantial results.

For example, in a middle-market, value-add distributor client, we developed a cross-functional team with participants from all sites. There were several different personalities and strengths in the room; however, the result was a 30% reduction in inventory levels which freed up millions of dollars of cash.

3. Look for the “and”:  One of the best ways to create a collaborative environment is to provide typically “either” “or” situations and ask the group to look for a way to achieve both.  I find that stretch goals spur out-of-the-box thinking and interactive discussion.

For example, on several client projects, I’ve helped my clients find ways to reduce inventory levels by millions of dollars while improving service.  Typically, this can be thought of as an either-or equation as if you have inventory to cover potential sales, you will likely increase service levels; however, we created an “and” by freeing up cash and improving our service levels by having the “right” inventory in place.

Collaboration is no longer a fluffy concept; it will drive accelerated cash flow, improved margins and business value and sales growth.

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