Manufacturers and Distributors Feel The Amazon Effect

September 30th, 2015

APICS 2015 Lisa Anderson

My clients and colleagues know that I frequently talk about the value of people and especially engaged employees. I even have a newsletter, Profit through PeopleSM sharing tips about how to leverage all aspects of your organization to improve overall company performance. Why stress people so much? Because they are going to be critical to you and your company in raising the bar so that you can meet, and more importantly surpass an entirely new and elevated set of customer expectations, what I call The Amazon Effect.  I define The Amazon Effect as:

The pressure put on companies to provide superior customer service, rapid deliveries, and higher accessibility to products/services is known as the Amazon Effect. Achievement of these factors can lead to higher growth, more loyal customers and opportunities for margin improvement, but not meeting these ‘Amazonian’ standards can quickly lead to a company’s downfall. Think of this as a game of poker, the ante to just get in the game is 24/7 service, easy-to-use ecommerce Website, same / next day shipping and easy return processes.

It’s not enough to just survive any longer, businesses need to thrive. My research tells us that customers want products and services delivered immediately (24 hour turnaround is no longer sufficient) with a 24/7 viewpoint, increased levels of customization, and extra mile service. Manufacturers need to create a ‘sweet spot’ of people, processes, plans, profit drivers and priorities to create a customer service edge.

Attending APICS 2015 in Las Vegas, October 5-7, 2015?

Plan on joining my session entitled Priming Your Supply Chain for The Amazon Effect on Tues., Oct. 6 at 8:00 a.m. at the Mirage Hotel in Las Vegas, Nevada. Ideal for attendees from manufacturing, operations, distribution and supply chain, I will be sharing key strategies on where and how to make improvements to stay competitive and relevant to customers. I will also share case studies on how companies were able to re-focus their energies on a more customer-centric operation netting more sales at higher yields.

Learn more about APICS 2015 or register for my session.

Can’t Make the APICS 2015 Conference?

I am  currently working on a book entitled “The Amazon Effect” detailing the business roadmap to thriving in an ultra-competitive marketplace. I share with readers how to make meaningful business transformations to focus on customer service, improve planning with SIOP and ERP, leverage technology and profit through the people in your organization and supply chain. Sign-up in advance for “The Amazon Effect” and I will notify you when it is released.

Learn more about The Amazon Effect with these other articles:

Slashing Lead Times to Counter the ‘Amazon Effect’

The Amazon Effect: Which Came First? Service or Product Offering?

The Amazon Effect: Create a Customer Service Edge


Are You Ready for Q4?

September 25th, 2015
end of year planning

It’s time to plan the rest of the year to ensure a smooth ending to 2015 and interrupted service to customers.

The years seem to fly by faster and faster, don’t they? As we head into Q4, it is important to think about whether you are ready for calendar year-end (which coincides with many fiscal year-ends) and the holiday season? Customers no longer find it acceptable for you to be MIA during the holidays.  24/7 accessibility is somewhat the norm. Thus, it is good to prepare. A few items to think about:

  1. Holiday vacation schedules – do you know who will be gone and when? Make sure you have a plan with enough resources to support your business during the holidays.
  2. Tax planning – have you thought about how you can save taxes with year-end strategies? Ask an advisor for ideas. It is too late after the year ends!
  3. Your customers’ year-end – find out about your customers’ year end. Is there something that would help them be successful? Can you add it into your plans?
  4. Inventory planning – what inventory level do want to achieve? Re-evaluate sales forecasts, sales orders and the rest of demand. Adjust purchase orders and transfer orders as needed.
  5. Capital planning – how are your capital plans progressing? Do you need to make adjustments to complete in the current year or to extend to the next year?

Think about what is important to your business and evaluate what should be done in preparation for Q4. You’ll be ahead of the curve.

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The Good and Bad of Using Temps, Contractors and Consultants

September 22nd, 2015

When facing short-term staffing challenges, supplement your needs with temps, contractors or consultants. To be successful, be clear on the purpose and staff accordingly.

I find that almost every one of my clients and prospective clients are growing significantly. One complication of growth is to find, upgrade and keep your people. One way to supplement your resources short-term is to hire temps, contractors and consultants.

Each has a different purpose. Temps typically fill in for manufacturing and distribution resource gaps.  For example, if you need assemblers for your operation or machine operators, temps can be a great solution. Contractors and consultants can often be confused; however, I see contractors as highly-skilled resources that typically assist with specific tasks such as programming whereas consultants typically are looking at broad topics and providing recommendations for improvement. Contractors are more likely to fill in for missing positions or specific projects. As a consultant, I find that I typically provide design expertise for strategy, organizations, processes and systems and often fill the advisory and mentor role in implementing the designs.

Many of my clients use temps to fill short-term resource needs to cover spikes in demand, to cover dramatic swings of seasonality, and to support growth early in the cycle. The issue is that it is never as simple as it seems it should be. Certainly, hiring a temp is a great way to test out resources for full-time jobs. It is also a good way to find people with the required prerequisites intact rapidly; however, it doesn’t mean that training can be skipped. Ideally your temp agency is screening candidates to speed up the process and potentially is providing some level of training; however, some sort of training will be required on-the-job. Don’t forget to account for this need.

Temps should not be viewed as long-term resources. They have no loyalty by definition as they fill in for gaps at various companies. You also are not typically providing the same level of training and support to temps vs. full-time resources. Therefore, if you expect to keep temps long-term, you’ll want to transition them into full-time employees for optimal results. That way, efficiencies and quality will be built into the process.

Conceptually, the same holds true with contractors. They fill short-term gaps and can be a valuable way to test out potential employees if growth dictates the need for additional long-term assistance. With consultants, occasionally I’ve filled responsibilities for a role temporarily; however, never full-time. If full-time is required, hire a contractor interested in transitioning into a full-time employee. Typically consultants design improvements with specific objectives, measures and value for the organization, support the implementation from an advisory/mentoring standpoint and move to the next project/objective. This can be invaluable in shoring up talent rapidly without having to hire it upfront. 

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The Pope & Visionary Leaders

September 21st, 2015

supply chainAs the pope heads to the U.S. for the first time, there will be significant buzz and conversation. Pope Francis is certainly making a splash with almost every move. From what I see, non-Catholics and Catholics alike are interested in what he’ll do next – and seem to respect his vision. There’s no doubt he has created a stir not seen in quite some time – if ever.  He has a far better chance of his vision taking hold than any Pope I’ve seen – be a visionary, and people will follow.

One tip to implement this week:

There is no way to become a visionary in a week; however, you certainly can take steps to lead you toward this path. Start by not being afraid to stand out from the crowd. The Pope is the first Pope to live outside of the palace in the Vatican and turn tradition on its head. What do you feel passionate about that will help your company, department or team succeed? Be willing to stand out from the crowd in a respectful manner.

Think about options to gain attention. I often see that the most talented people have NO voice. Be willing to speak up and ask the tough question or suggest a radical alternative. Just think before you speak – how might you phrase it so that it is productive? Put yourself in the other person’s shoes. How would you want someone to bring this up to you?

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


Project Execution Paramount for Success

September 17th, 2015
project execution

Teamwork, focus and hard work are elements needed for successful project execution but the quality of leadership determines the outcome.

Even though I typically am called into clients to help elevate business performance derived through topics such as preparing for growth, improving service levels, reducing lead times and dramatically improving inventory turns, my technical expertise on those topics rarely if ever relate to why the preponderance of my business is repeat business. My best clients call me back because I partner with them on execution. People are engaged, and results follow.

When I look at the most important factors in success execution, I can boil it down to these four: 1) Leadership & Culture. 2) Focus. 3) Exemplars 4) Follow-up

1. Leadership & Culture: Have you ever seen a successful company over the long-term with weak leaders? Never! Solid execution requires exceptional leadership – no exceptions.

What does this entail? Leaders must start by communicating where the company is headed. Explaining the vision is the cornerstone to success. Discuss its importance and how each team and individual employee can add value and contribute to the vision. Next, collaborative goals must be established. It should not be a dictation of goals or left completely to the employee; instead a collaborative process is optimal. Performance management systems should be in place. Immediate feedback (both positive and constructive) is a must. Training, development, and career paths should be a natural part of the performance management discussion. Leaders must ignore the temptation to focus on inputs (# of hours worked, tasks and activities); instead focus on outputs. Help employees develop plans, gain resources and overcome roadblocks to achieving the results. Celebrate success.

Culture shouldn’t be an afterthought unless you’d prefer failure. What set of beliefs govern behavior? What does your culture support? Does your culture appreciate collaboration or individualism? For example, are you compensated and rewarded for team contributions or individual contributions even if at the expense of the team? Do leaders say one thing and do another? Don’t bother executing until your leadership and culture are in sync with your goals.

2. Focus: It’s amazing what focus alone can accomplish. For example, a few of my clients have suffered for years with persistent problems. Of course, they tried many alternatives to resolve the issue and were frustrated. After we were able to resolve the problem by working together, they often said that although they thought my technical skills would help to resolve the problem, it had little to do with it. Instead, focus was the secret weapon.

Once executives focus on a select few root causes, seemingly insurmountable roadblocks disappear. The interesting thing about this is that it is as simple as it sounds, but it is not as easy to implement as it sounds. Why? Designing and improving processes and leveraging systems and technology will require focus; however, aligning people takes an exaggerated focus. How do we align disparate functions and people with conflicting goals and managers with a common focus? Go back to point #1

3. Exemplars: Another secret ingredient to execution success is to identify exemplars. Who are the influence leaders in the organization? Who sets an example that others will follow? They’ll come from unexpected places and positions throughout the organization, and so keep an eye out for those people who others call or ask for advice after the meeting. Look for those who are not typically visible because they do not have issues. Ask people who they would be comfortable talking with if they wanted further clarification on a particular topic. You’ll find them.
Bring the exemplars into the fold. Ask them to try the new program or process. Incorporate their feedback. Ask for their support. Empower them. Soon the rest will follow.

4. Follow-up: I’m fondly known as a pit terrier when it comes to follow-up. We can attribute or blame this on my mom! However, it is a key reason for my success; I cannot count the times I’ve succeeded through determination alone. If you’re interested in execution success, follow-up isn’t an option.

A few tips from the pit terrier gene pool: 1) Start with a solid plan. 2) Ruthlessly identify priorities. 3) Ask questions about the priorities. 4) Listen. 5) Do not shy away from roadblocks and conflicts. 6) Continually improve your communication & presentation style as it’s essential in handling conflicts. 7) Be upfront and trustworthy. 8) Track metrics but only focus on the key ones. 10) Be vigilant.

Execution is essential in today’s new normal business environment. Improving business performance can be a constant struggle. Thus, what could be more important than being known as a rare person or company who consistently delivers results in a collaborative and engaging manner? 

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