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Trump and Trade

January 31st, 2017

Well, you’d have to be living under a rock to have not heard all the controversy about Trump and trade. Tariffs, restrictions and general chaos….

Currently, the U.S. trades significant volumes with China, Mexico and a whole host of other countries as we live in a global economy. For example, in looking up trade balances with China for 2016, the U.S. exported $104,149 (in millions) and imported $423,431 (in millions). Thus, what is all this hoopla about and what should supply chain leaders be thinking?

global trade

What Should We Consider and/or What Impacts Could Arise?

Although it is easy to get caught up in all the emotion and politics, the bottom line is that we aren’t going to flip the import/export numbers with China (as an example). Will it change in some respect? Of course; it would regardless. Will the trade figures change substantially this year? No. Will companies re-evaluate their insourcing, near-sourcing and outsourcing decisions as costs change with tariff adjustments? Yes.

We are headed into volatile times; however, this is not abnormal in supply chain circles. Who can predict hurricanes? No one. Yet hurricanes and natural disasters affect the supply chain every day. Those who are successful will find a way to adjust with changing times and will become more agile in their responsiveness to changing circumstances. And they will figure out what is most important to their business and focus solely on those factors while building agility into the rest.

What is most likely to occur is that Trump will re-evaluate trade deals and re-negotiate. If we took a step back and looked at our trade agreements, what makes sense? How can we keep businesses flowing yet improve the deal? If you are interested in getting in front of the curve, consider these factors for just those areas most critical to your success.

 



Innovation

January 30th, 2017

I am the Chair of the Innovation Awards of the Manufacturers’ Summit for the Inland Empire, and we have been quite busy preparing for this Friday’s summit (see below). It is important to encourage innovation for the obvious reason that if we do not innovate, we will stand still. And, if we are standing still, we end up moving backwards while our competition passes us. What have you innovated lately?

One tip to implement this week:

Innovation is certainly not something to accomplish in a week; however, it is definitely something to start this week. My best clients innovate by inspiring and rewarding creativity. The executives provide a vision of the future and encourage employees and partners to innovate. As my consulting mentor says, innovation is applied creativity. I bet you have a LOT more innovators (or potential innovators) at your company than you realize.

Are you creating a culture of innovation in your company, department or just with your colleagues? Start by encouraging thinking and testing of ideas. Find areas where you’ve already innovated and apply for next year’s awards. Make sure your employees and colleagues are recognized for their successes!

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…”

 



70% of Manufacturing Execs Say Near-Sourcing Will Increase

January 26th, 2017
near-sourcing and insourcing

70% of manufacturing executives state near-sourcing will increase according to LMA Consulting Group Research.

Lisa Anderson MBA, CSCP, president of LMA Consulting Group, conducted a proprietary research study to better understand outsourcing, near-sourcing and insourcing trends for U. S.-based manufacturers. Pending further analysis, Anderson reports on a preliminary finding that shows that 70% of responding executives expect near-sourcing to increase within the next five years. Survey data was collected from August to October 2016, and the U. S. presidential election may have an impact on this trend toward near-sourcing.

“I’ve seen that manufacturers were already considering insourcing to the U.S. and near-sourcing options to Mexico and other closely located countries because of the Amazon effect – the need for rapid response to customer needs. Thus, the industry was already moving in that direction prior to the U.S. presidential election. However, since tariffs are likely to increase and bad publicity could easily occur, the impact will probably steer some of those companies towards the U.S. instead of Mexico.

“In addition to the Amazon effect, I’ve witnessed a number of companies who poorly planned their outsourcing and off-shoring efforts,” shares Lisa Anderson. “They now have experience and data to make better decisions. Since the total cost of importing non-commodity products from Asia is equalizing with what can be achieved in the U.S. or Mexico, near-sourcing becomes a no-brainer when the customer and cash impacts are added to the cost equation. It is also far easier and more successful to communicate and manage when manufacturing is closer to the markets served.”

This is the third major research study conducted by LMA Consulting Group which included a Skills Gap Study and The Amazon Effect research project. With an uptick in manufacturing and continued concerns of the lack of skilled resources to fill new manufacturing jobs, Anderson is initiating a new Skills Gap Survey to assess the necessary skillsets for manufacturing positions. The data will be used to uncover new issues as well as compare and contrast results from 2013. Take the survey here or copy and paste this link into your browser http://ow.ly/pMcw308apzo.

To receive the final report or participate in an Anderson-led webinar on outsourcing, near-sourcing and insourcing, enroll here or cut and paste this link into your browser http://ow.ly/7kF8308agJQ.

 



Leadership – Making You Feel Important

January 25th, 2017
leadership

As a leader, knowing how to treat people so that they feel important and a part of your company’s success builds a reliable team that will go the extra mile to deliver results.

Of course we talk about leadership more than anything else as it is #1 to business success. Thus, we are always looking for strategies and tips for success. One of our clients clearly prioritizes us — it is clear we are one of her top priorities. How often do you feel that way?

We happened to work with her in more than one company, and it was clear that her team appreciated her leadership style. People quite opposite in personality (who probably wouldn’t agree upon much) seemed to enjoy working with her. Of course, no one is perfect (including her) but she had this particular quality down pat — she knew how to treat people. Do you?

 

So, what are you doing to make your employees, peers, managers, trusted advisors and the like feel important? First, regardless of the fact that it is certainly a nicer way to live your daily work life, it will deliver results. Will you go the extra mile for someone who is rather grumpy and doesn’t seem to appreciate what you do or for someone that makes you feel important?  

Some of the strategies I’ve seen that achieve this goal include the following:

  • Ask for their opinion.
  • Show up to scheduled meetings (sounds really silly but is a BIG deal).
  • Don’t say you have an open door policy and then keep looking at the clock when they show up at 4:50pm.
  • Find out what is important to the person and tailor projects to his/her interest.
  • Appreciate him/her when everything isn’t going perfectly.
  • Take the time to review goals and performance at least quarterly (no matter what crisis is going on).
  • Promote them and their projects to the rest of the organization.
  • Ask how you can help.

Which of these will you start using tomorrow? There is NO reason to wait to make people feel important — after all, people are our #1 asset.

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

Leadership Will Make or Break Success

Leadership Qualities 

 



TPP is Dead …. How Will it Affect Our Ports?

January 24th, 2017

On Trump’s first full day in office, he backed out of TPP, as expected — and promised. The concept behind this Trans-Pacific Partnership was to deepen economic ties among countries that border the Pacific Ocean. Will this have an effect on trade?

At the same time, I just so happened to go on a tour of LA Port on Friday (see my APICS colleagues pictured below as we sail past a container ship). Southern California’s ports bring in 40% of U.S. imports, and so we are the “big daddy” of the ports. Thus, any trade changes will affect our ports in some way. The question is how…..

Southern California ports

 

What Should We Consider and/or What Impacts Could Arise?

Certainly, since the ports and trade are tied together, it makes sense that some sort of change will occur; however, I don’t think it will be noteworthy. Since the Southern CA ports are able to accept big ships (which isn’t that common) and they are located in a prime spot for trade, the impact will not be substantial near-term.

Of course, the prices and tariffs will be impacted; however, for commodity items, it will still make sense to bring them in from lower labor cost countries. For non-commodity items, we’ll see a resurgence of manufacturing and automation/use of technology take place in North America. We will need to be more nimble and agile — including our “big daddy” ports if we wish to be competitive.

Are you prepared to leverage additional technology to remain competitive? And do you know how your partners will be impacted? If you are not incorporating those likely impacts into your strategy, you will be left in the dust for those who are thinking ahead.