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The Impact of the Volatility

January 27th, 2016

supply chainCertainly, you’d have to be hiding under a rock to not have heard about the wild swings in the global stock markets lately. Although we’ve definitely become more comfortable with volatility, it still can cause executives to take a step back and think. What if China’s slowdown affects manufacturers in the U.S. more than we realize? Should I be thinking about pulling back vs. a full court press on growth? Should I continue investing? What can I do about this wild foreign exchange market if I have suppliers and customers using different currencies?

Those executives who find a way to be comfortable with and leverage volatility will thrive! We might as well get used to it as it is the “new normal”.

One tip to implement this week:

In thinking about leveraging volatility, the first order of business is to not overreact to fluctuations. As hard as it might be to not react when you see money rushing out the door with currency exchange rates or some other factor, the key is to remain calm. Take a step back. Is this change some sort of reaction that will likely reverse itself? Or is it based in a fundamental change that will affect your business over the long haul? Dig into the changes that are most impactful to your business and determine if they will affect you over the long term. If not, don’t overreact. Instead, build flexibility into your work processes and business model. If so, put together a plan to proactively address the situation. Burying your head in the sand might seem like a good idea, but it isn’t! 

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…”

 



People Strategies to Kick Off the New Year

January 26th, 2016
people strategies

A motivated team can overcome some of the biggest business challenges a company can face.

People are your #1 asset. It makes imminent sense to kick off the New Year with this tenet in mind. How can you start with gusto?

Frequently, employees take off time near the end of the year, and so it can take time to get back into the swing of things. Don’t let your attention to your human resources take time off too. To shorten that cycle — and, most importantly, to empower and engage your people, think about leveraging some of the following strategies:

  1. Check in: Start the New Year by checking in with your employees. How are they doing? What are they working on? It’s interesting how often we find out that we didn’t know where our employees spend their time. Find out. Are they concerned about potential roadblocks? What would they most like to accomplish this year? Make it your priority to find out.
  2. Remind employees of the vision: You cannot emphasize the whys behind what your company does enough. Remind your employees of the vision. What does it mean to you? What does it mean for your customers? End users? In essence, remind everyone why what they are doing is worthwhile.
  3. Align on goals: I believe in quarterly goals with frequent check-ins. What lasts for a year unchanged anyway?  Not much! Your employees will ditch their cobweb goals with or without you. It is always better to align, discuss priorities, strategize on resources, etc. The bottom line is to make sure everyone has clarity and is involved in creating that clarity.
  4. Recognize successes: There’s no better time to recognize small wins than after the holidays. It jump starts success. Success builds on success.
  5. Communicate, communicate, and communicate:  In essence, the title says it all. Don’t expect people to fully absorb with one communication. Be repetitive. Vary the medium so that you don’t sound like a broken record or your mother. Collaborate on ways to communicate effectively. Involve the team in communication.    

Did you like this article? Continue reading on how to Profit Through People:

Empower Your People to GROW

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Interested in Growth? Beef Up Systems & Project Management

January 22nd, 2016
growth

If business is booming make sure your project management leadership has systems in place to support growth.

Companies are in growth. Every single client is growing – many quite dramatically while others a bit slower, yet growth just the same. Although rapid growth is exciting, it can also be challenging. Systems can provide the perfect tool to leverage for success – and project management is your ticket to ensure success.

Growth can be challenging for companies both large and small. Whether the client is still relatively small and concerned with cash flow or whether they are much larger and trying to purchase buildings and machines, growth will bring growing pains. Customers do not care what you have to do to service them, whether they are large or small. They expect you’ll have what they need where they need it and when they need it. For example, Amazon has next day, same day and Sunday deliveries as options. E-commerce capabilities and mobile-friendly apps are expectations for all types of companies. Thus, a solid systems infrastructure is not only valuable but a requirement for survival to support growth.

Similarly, larger companies also can benefit from systems. One of the best ways to gain new customers, develop and sell new items, and to expand your product line by cross-selling is to upgrade your capabilities. You’ll need to leverage systems to be successful and efficient with these endeavors. There are a few reasons why: 1) Volume. 2) Best practices. 3) Automation.

  1. Systems will provide access to volume. Certainly, one of the key advantages of growth is the ability to leverage additional volume over the same or minimally larger infrastructure. This brings profit to the bottom line. A system does not care whether you perform 10 transactions (or calculations) or 10,000. A person does!
  2. Systems also provide the ability to leverage best practice processes. These processes can be embedded in the system. Unfortunately, I’ve seen clients (and people) who have the latest and greatest technology available to them yet they fail miserably. The reason this occurs is that they do not take the time to think through the optimal processes the system can utilize. One way to think about this is “garbage in, garbage out”. A system will only calculate errors faster if you don’t focus time and attention on your processes. How can you set up your daily, weekly and monthly routine to best support your business? Build these into your system, and your system will become invaluable to growth.
  3. Systems provide the opportunity to automate. There are countless opportunities to automate in every business. I’ve yet to walk into a new client without significant potential to take steps out of processes by having the computer perform steps and calculations within a set of guidelines. For example, instead of manually calculating what you need to purchase in order to meet your customers’ needs, an ERP system will figure that out for you and provide you with a recommended plan for review. Then, our job becomes managing exceptions and adding value instead of performing routine tasks.

SOLID PROJECT MANAGEMENT ENSURES SYSTEMS SUCCESS

As valuable as a system can be in supporting growth, it will be meaningless if not backed by solid project management. Certainly, I’ve seen more issues arise in implementing and leveraging systems than almost every other type of project. Thus, it is of utmost importance to focus on the critical project management techniques required to ensure systems success.

Reviewing those successful systems implementations, upgrades and projects to further leverage existing functionality, the vast majority have these tenets in place:

  1. A strong project leader – it must begin and end with leadership as my HR mentor used to say. Interestingly, the best projects with weak leaders fail whereas the weakest projects with strong leaders succeed.
  2. A well thought-out project plan with a clearly defined critical path and milestones – it is easy to get lost in system implementations; thus, simplifying the focus to the critical path is essential to success.
  3. Tracking mechanisms – it is too late to discover an issue once 50% of the project has elapsed. Instead, find ways to build checkpoints into the project plan. Make sure there are plenty of short tests so that you can rapidly discover issues and plans can be adjusted.
  4. Senior leadership support – similarly to project leadership, no matter how strong the team and plan, it will fail without executive support. Undoubtedly, a conflict will arise that will require support from senior leaders. Be prepared upfront for this need.

There are countless reasons to consider implementing a new system, upgrading your system or further leveraging your system to support growth. First and foremost, consider whether you want to grow by 5% per year using your current infrastructure and systems or whether you want to take advantage of opportunities as they arise. Many of my clients have opportunities to grow by 20%, 50%, and 100%.

Next, why not increase cash flow and maximize profit while growing the business? Since it is often a no-brainer to further leverage systems, make sure you are prepared for success. Beef up your project management and success will follow. 

Did you like this article? Continue reading on how to become a Systems Pragmatist:

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Uncommon Common Sense Project Management

 



System Strategies to Kick Off a New Year

January 19th, 2016
system strategies

Kick start your new year with business strategies that are more focused, faster and improve overall relationships. The 5P Accelerator is a new way to take a critical step toward success.

Since I work with clients ranging in size from small, family-owned businesses to multi-billion dollar corporations, industries ranging from aerospace to building products to value-add distribution and on topics ranging from growth to service level improvement to increasing business performance, I have the opportunity to see countless businesses — and what works and what doesn’t work.

It seems like a great time to share what is important as we head into a new year, new quarter or even new day. There is always opportunity to take that critical step towards success.

From a systems standpoint, here a few of the top strategies/areas to consider as a next step in driving business success:

  1. Leverage what you have – Even though I dedicate a portion of my practice to selecting the “right” system to best meet business objectives, I find that 80% of the time, the current system (almost no matter how bad it seems) can be further leveraged to drive results. There are two situations I can think of where the client was extremely system challenged but we found a few ways to improve upon processes, even in the worst of cases. Start by thinking about what is most important to your business. Then dig into the areas of the system that could support that critical business process. It can be as simple as that.
  2. Upgrade when it makes sense – As I said earlier, every business can be improved with its current system; however, there is a limit. If you are in a high-growth mode and leveraging a system geared to small business, you’ll begin to run into the wall in terms of capabilities. It might be time to upgrade. If you have gone through a merger or acquisition, it is likely you’ll need to consider upgrading to have a common platform. If you have a highly customized system to support your business with limited growth potential without continuing down the customization path, it is likely time to consider upgrading. If you want to make a leap forward with your technology and are using an outdated system that has weak support and might be bought up by the next software giant to come along, it might be time to consider an upgrade.
  3. Select the “right” system to drive business results – I have helped many clients select the best system to meet their business objectives the last several years. It can be a dog-eat-dog world with radically different estimates and smooth-talking salespeople; however, there are also great suppliers selling highly functional and flexible systems to bring your business to the next level of performance. The bottom line is that it boils down to how well the software options support your critical business factors (which should be a short list; not 100 items) and how well the software suppliers will partner with you for success. Implementation will cost more than software and it will cost more than you expect to do it well, yet it will deliver substantial results after things smooth out.
  4. CRM – In today’s Amazon-impacted marketplace, service is of critical importance. My clients are expected to deliver faster, provide more options, suggest value-additions, be available 24/7 — and the list goes on. CRM software can help you keep track of your relationships, potential business and provide extra value to your customers.
  5. Warehouse automation – As e-commerce continues to grow in importance around the globe, many manufacturers and distributors must rise to the occasion. It isn’t as easy as using the same processes that work effectively for your regular business. E-commerce drives significant differences to warehouse operations if you want to be able to provide the level of service consumers have become accustomed to at the price they are willing to pay. These changes are driving significant investments in different equipment and technology for those companies with heavy e-commerce business. Bring in experts. Do your research. It will make or break success.
  6. SIOP functionality – More and more of my clients are further leveraging their planning, capacity planning, demand planning/forecasting, MPS/MRP and advanced planning systems to better align demand and supply for improved service levels, reduced lead times, improved margins, accelerated cash flow and to support growth.

Think about which of these might benefit your business. Leveraging systems is one way to grow without adding overhead and it will improve your business performance by utilizing an already-existing asset in most cases. Give it a try. Contact me for support with these strategies and/or to let me know how it goes. Sharing success stories and even failures can propel you to success.

Did you like this article? Continue reading on how to become a Systems Pragmatist:

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The Impact of China’s Slowdown

January 18th, 2016

supply chainIt is somewhat of a coincidence that I’ve heard a few presentations about China recently (thanks to international attorney and China guru John Tulac as one of these experts) which synced up with the stock market plunge in China — and in the U.S. (and thus globally). Of course, that has also spurred on other conversations about China. The bottom line is that manufacturers and distributors should be weary and on alert.

It is very likely that if you are a small to mid-size business, the quality you receive from China will suffer eventually. It is less likely to affect companies like Apple but it is very likely to affect the rest. Lowering quality levels is one potential impact of the slowdown. It is also possible that suppliers could go out of business if their owners lose a bundle in the stock market. There could be many impacts……the key is to be on the alert and thinking ahead of time about your specific supply chain and potential impacts.

 
One tip to implement this week:

As one of my consulting colleagues said, this is no surprise. He had been warning his clients for years about this outcome. With that said, it is easy to be lulled into thinking the present will continue into the future. Instead, before it is too late, take action. Start by making sure you have solid relationships with your supply chain partners. You’re less likely to be impacted if you have good relationships. Next, no matter how great your relationships, you should have backup suppliers, backup plans and metrics to track progress. You’ll want to catch issues early.

The most successful supply chain partnerships I’ve seen are when you are upfront with all supply chain partners. This means you cannot keep a backup that you never use until you are desperate. It also means you cannot pretend as though you don’t have a backup. Solid supply chain partners understand the value of having a strong supply chain and monitoring its health. Take steps to make it so!

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…”