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Manufacturing Expert, Lisa Anderson, Sees Impacts of Artificial Intelligence on Manufacturing Profit, Inventory Levels and Cash

September 20th, 2019

Manufacturing Expert, Lisa Anderson, Sees Impacts of
Artificial Intelligence on Manufacturing Profit, Inventory Levels and Cash

CLAREMONT, CALIFORNIA – September 19, 2019 –  Manufacturing and Supply Chain Expert,  Lisa Anderson, MBA, CSCP, CLTD, president of LMA Consulting Group Inc., predicts that artificial intelligence (AI) and human learning will impact most aspects of manufacturing resulting in improved profits, inventory levels and cash.

“Our manufacturing clients have really embraced the power of AI since the first of the year.  From improved forecast accuracy impacting inventory levels to more openly working with changing customer needs and the overall customer experience, manufacturers are seeing the effects of using this data,” Ms. Anderson commented. LMA Consulting Group works with manufacturers and distributors on strategy and end-to-end supply chain transformation to maximize the customer experience and enable profitable, scalable, dramatic business growth.

“Despite the fact that manufacturing, especially in Inland Southern California continues to be strong, manufacturers need to be smart. By integrating AI with tried and true techniques such as SIOP (Sales, Inventory and Operations Planning) and taking advantage of predictive analytics and other human learning technologies in conjunction with ERP systems, manufacturers can become better at forecasting and exceeding customer expectations.  In fact, for every one percent improvement in forecast accuracy, there can be a seven percent improvement in inventory levels and therefore cashflow,” she said.

In an effort to support clients, Ms. Anderson is active with the Board of Directors of the Inland Empire Economic Partnership, where she represents the Logistics Council whose initiative is developing a consortium for logistics, supply chain and advanced manufacturing success. “AI and other forms of technology are transforming manufacturing as we know it. From reevaluating sourcing and enabling robots to predictive maintenance and shortened design times, AI offers up vast potential. Successful manufacturers are strengthening their hold. Supply chain and other manufacturing professionals are sharpening their skills to take advantage of these resources. It takes work, smart management and a strong team to be successful. A perfect storm for manufacturing success. The evidence is in the growth we see in Inland Southern California (also known as the Inland Empire),” she concluded.

About LMA Consulting Group – Lisa Anderson, MBA, CSCP, CLTD

Lisa Anderson is the founder and president of LMA Consulting Group, Inc., a consulting firm that specializes in manufacturing strategy and end-to-end supply chain transformation.  She focuses on maximizing the customer experience and enabling profitable, scalable, dramatic business growth. Ms. Anderson is a recognized Supply Chain thought leader by SelectHub, named a Top 40 B2B Tech Influencer by arketi group, 50 ERP Influencer by Washington-Frank, a top 46 most influential in Supply Chain by SAP and named a top woman influencer by Solutions Review. She recently published, I’ve Been Thinking, 101 strategies for creating bold customer promises and profits. A regular content contributor on topics including a superior customer experience with SIOP, advancing innovation and making the supply chain resilient, Ms. Anderson is regularly interviewed and quoted by publications such as Industry Week, tED magazine and the Wall Street Journal.  For information, to sign up for her Profit Through PeopleTM Newsletter or for a copy of her book, visit LMA-ConsultingGroup.com.
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Media Contact
Kathleen McEntee | Kathleen McEntee & Associates, Ltd. | p. (760) 262 – 4080 | KMcEntee@KMcEnteeAssoc.com   
                                                        



Survey says Automation Beats IoT

September 19th, 2019

According to Industry Week’s Tech survey, robots are hot! On the other hand, there is a bit of skepticism with IoT and wearables. In talking with mainly small and medium size manufacturers in answering the question of which technology is most important to your company’s success, AI/ automation came in at #1 by a long shot.  It was followed by data analytics software/ERP/MES and then additive/digital manufacturing.

The article discussed the fact that IoT has been quite successful at driving results but the larger companies are the ones pursuing it. Certainly, with our clients, the small and medium size clients have less resources and need to prioritize.  We are seeing the same set of priorities. With that said, there is a lot of interest in IoT as it relates to connecting equipment, vehicles and more.  However, it is a more complex topic with multiple vendors involved. It just hasn’t been rolled out in any significant way because manufacturers and distributors see more potential for customer and bottom line improvement with automation/AI, ERP systems and additive/digital manufacturing. Are you considering any of these options?

What Should We Consider and/or What Impacts Could Arise?
Since we work with clients that are small and medium closely-held organizations to private equity backed to multi-billion dollar enterprises, it is interesting to note what is in common across the board. Certainly, there is no doubt that almost every executive is at least thinking about automation and robots!

Are you keeping up on the latest thinking on the benefits of technology? We NEVER support technology for technology’s sake. In fact, it is a common mistake for clients to get carried away with the latest and greatest concepts and lose sight of the return to the customer experience and the bottom line. With that said, you have to be aware of what’s out there and be continually evaluating what might make sense for your business.

I just talked with a commercial banker about collaborating on a robotics education session. Why not seek out information and figure out which technology will align with your business strategy and objectives? Then, put together a trial to test the concept without a significant financial commitment. There are also resources to collaborate with to share in these learning opportunities.

For example, we are creating a consortium for advanced manufacturing and logistics excellence in the Inland Empire focused on just this topic. Also, our non-profit APICS Inland Empire group, which is a chapter of the Association for Supply Chain Management, provides symposiums, webinars and tours related to these types of topics. You’ll find more information on these types of topics on our resilient supply chain series.

 

 



Manufacturing Expert, Lisa Anderson, Presents 2019 LMA Advocate Award to Executive Peer Group Leader, Ronald Penland

September 16th, 2019

Manufacturing Expert, Lisa Anderson, Presents
2019 LMA Advocate Award to
Executive Peer Group Leader, Ronald Penland

CLAREMONT, CALIFORNIA – August 7, 2019 –  Manufacturing and Supply Chain Expert,  Lisa Anderson, MBA, CSCP, CLTD, president of LMA Consulting Group Inc., presented the 2019 LMA Advocate Award to Ronald Penland, President, Renaissance Executive Forums.

“It is a pleasure to recognize Ron Penland with our 2019 LMA Advocate Award.  Ron and I both work with manufacturers and distributors.  We have and continue to collaborate for the mutual benefit of our respective clients and are also part of several service organizations” Ms. Anderson commented. LMA Consulting Group works with manufacturers and distributors on strategy and end-to-end supply chain transformation to maximize the customer experience and enable profitable, scalable, dramatic business growth.

Business building, collaboration and experience is a hallmark of Ron Penland and his Renaissance Executive Forum groups.  “I really enjoy helping people grow their business.  From insights into managing the business, its growth and people to helping them find experts who can set a laser focus on a particular aspect of the business, I’m all about helping them grow.  Working with Lisa is always a pleasure.  She knows how manufacturers and distributors work and she is also aligned to help them maximize profits.  It’s an honor that she values our relationship” commented Mr. Penland.

Advocates, partners and centers of influence are key to LMA Consulting’s continued growth and success, as they work together to advance manufacturing and the global supply chain. “Over 14 years, I have learned that it takes more than hard work and intention to affect growth. It’s important for me to be connected with other professionals who can lend value to my clients and who can provide me with another perspective.  LMA Advocates help me do just that and more. I value Ron’s collaboration, as well as referrals for speaking engagements and client projects.  He is well-respected by his members who have received great value from his leadership.  I’m happy that he is also on my team” Ms. Anderson concluded.

About LMA Consulting Group – Lisa Anderson, MBA, CSCP, CLTD
Lisa Anderson is the founder and president of LMA Consulting Group, Inc., a consulting firm that specializes in manufacturing strategy and end-to-end supply chain transformation.  She focuses on maximizing the customer experience and enabling profitable, scalable, dramatic business growth. Ms. Anderson is a recognized Supply Chain thought leader by SelectHub, named a Top 40 B2B Tech Influencer by arketi group, 50 ERP Influencer by Washington-Frank, a top 46 most influential in Supply Chain by SAP and named a top woman influencer by Solutions Review. She recently published, I’ve Been Thinking, 101 strategies for creating bold customer promises and profits. A regular content contributor on topics including a superior customer experience with SIOP, advancing innovation and making the supply chain resilient, Ms. Anderson is regularly interviewed and quoted by publications such as Industry Week, tED magazine and the Wall Street Journal.  For information, to sign up for her Profit Through PeopleTM Newsletter or for a copy of her book, visit LMA-ConsultingGroup.com.
                                                                         # # #
Media Contact
Kathleen McEntee | Kathleen McEntee & Associates, Ltd. | p. (760) 262 – 4080 | KMcEntee@KMcEnteeAssoc.com   
                                                         

                                                                    
                                                         

 



Is there an ROI on a Forecasting System?

September 12th, 2019

A Client Question
Since forecasting can deliver significant benefits with increased levels of service, inventory turnover and margin improvement, the question that inevitably arises is whether it makes sense to purchase a forecasting or demand planning system. Of course, the answer is: “It depends”.

In one client situation, goods were manufactured in Mexico and purchased from Asia. Key customers were large retail outlets. Demand seemed to change daily.  Yet, lead times were in the months if the ‘right’ stock wasn’t in the ‘right’ place at the ‘right’ time. Of course, they could cover some small changes by adding freight costs but that isn’t a recipe for profit. Improving the forecast would improve their success. So, the question turned to whether a system would have a ROI.

The Answer
In their case, they could achieve a rapid return on investment by using a forecasting system. However, let me say upfront that more often than not, I do not recommend a system. It completely depends on whether it will drive the appropriate level of improvement and associated results or not. In this case, we could easily drive dramatic forecast accuracy improvement since we started out at such a low level of accuracy due to the business environment, industry and key customers. The people understood the importance of the providing forecast feedback and although the key customers didn’t have “good” forecasts to provide, they could provide data we could analyze. In these types of situations, we are able to reduce inventory by a minimum of 20%.  It should be noted, though, that results can be far greater.

Food For Thought
Although forecasting systems can be a great idea to drive service, inventory and margin improvement, they do not always provide a return. Take a step back to understand your industry from a forecasting point-of-view:

  • Is demand constantly changing?
  • Are you supporting small numbers of customer/location points with less than 25 items or is it 100 fold?
  • Are you able to gain key customer input and/or point-of-sale data?
  • Do you have anyone familiar with demand planning and forecasting to be able to make sense of what a system is telling you?
  • And, last but definitely not least, have you found the appropriate scale for your forecasting system?

Trying to kill a fly with an assault rifle is overkill. If you are interested in running your situation by us, contact us.

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Is Demand Planning/ Sales Forecasting Hype or Valuable?

September 9th, 2019

According to Gartner statistics,significant bottom line results can occur with just a 1% improvement in forecast accuracy. In fact, there are staggering improvements in lead time, inventory reduction and margins, so why not at least explore the idea? There are lots of worries expressed by clients and contacts:

  • We cannot predict what our customers will order!
  • Customers don’t even know what they will order! (And, in seeing these ordering patterns, I concur that this is often-times an accurate statement.)
  • Since we are using lean, our lean consultant told us we no longer need forecasts.
  • We are a small company and don’t have resources to focus on forecasting
  • And my favorite, “Why in the world would our significant sales team listen to you?”

I just have one question, if depending on the industry and study, a 1% improvement can lead to a 2.7% to 7% improvement in cash flow and minimally a few percentage points cost improvement in key categories such as freight, wouldn’t you be remiss if you didn’t consider your forecasting process? Of course you would be!

We have yet to run across a client that couldn’t improve the forecast, no matter how daunting the task seemed. Since the outcomes are substantial, it was worth the effort.  And, the effort was typically minimal compared to aligning the people on the forecast.

A few tricks of the trade in driving results with forecasting:

  1. Let your tool (whether Excel or a sophisticated system) do the work for you – From an 80/20 standpoint, there is no doubt that a simple tool will perform far better than even your best person. Develop your base.
  2. Focus on exceptions – On the other hand, your team is best equipped to provide insights and feedback on exceptions. Use their strengths.
  3. Drive results, not blame – Remember, the definition of a forecast is that it will be inaccurate. I’ve yet to run into a client with a perfect forecast. With that said, the three most impressive were across the board – a $100 million dollar facility of a multi-billion dollar aerospace organization with a manually generated forecast, a close to billion dollar consumer products company with a home grown system and smart people, and a rapidly growing <$10 million dollar manufacturer with an Excel-based system with smart, agile and process-oriented people. None of these folks ran around blaming anyone with forecast inaccuracy yet they all outperformed their competitors.

Perhaps it’s time to take a second look at your sales forecasting process. Who is responsible? How does it work? You never know what you’ll discover as you shine a flashlight on the process. If you’d like to discuss forecasting and demand planning further, contact us.

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