Category: Profit through People

Should We Listen to all the High Tech Talk?

January 22nd, 2020

Client Question
Should we pay attention to all this high tech talk? Certainly it seems like everyone and their brother is talking about artificial intelligence, the internet of things, and even the use of technologies such as virtual reality and autonomous vehicles. And this is aside from mundane topics such as ERP systems. And,  we need to function on a daily basis. We need to serve customers and deliver value to the bottom line.  And, we prefer to only get distracted when necessary.

The Answer
We have seen clients get carried away with the latest and greatest technology fads. Although it was an interesting personal education, it typically didn’t result in a return on investment. On the other hand, we have also seen clients ignoring technology that becomes vital to survival in their industry. After all, it is easy to do. When Sears used to be the Amazon of the age, no one thought they would be going out of business.

So, as usual, the answer is “it depends”. You must pay attention, learn about and invest in technology so that you can make a good decision on which to pursue and which to ignore for your go-forward business strategy. If it were easy, we would all be successful for 100 years running.  There are VERY few companies in this position. Do you have a position or a person who is dedicated or allocates part of his/her responsibilities to this role? If you don’t call it out, it will fall by the wayside. This should be similar in concept to an R&D/new product focus. Why should we focus only on new products and not new technologies?

Food For Thought
No two clients are alike. Some ask us this question and it is an obvious,: YES, you must invest to stay relevant and increase business value. For others, it is an emphatic, NO. Why waste resources on additional technology when we haven’t implemented or used the available systems capabilities that will move the business forward? As it seems to go in business, it is usually the best executives and CIOs who are on top of their technology road map who ask these questions. The rest won’t even invest enough to find out where they should prioritize limited funds so they don’t become the next Sears!

At a minimum, once you get to a certain size or complexity, the minimum you should do is upgrade your ERP system so that you have a modern technological backbone and can scale up quickly as needed. With that said, it is rarely enough if your goal is profitable growth.

If you’d like a technology and ERP systems assessment, please contact us. At a minimum, read our numerous articles and get started in evaluating your situation!

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Made in Vietnam?

January 19th, 2020

Vietnam has been the hot topic lately. After a visit recently, I saw first-hand the potential along with the challenges. Clients are definitely evaluating changing the source of supply to Vietnam. And the question is: should they? Or, alternatively, the question is: Are they moving fast enough?

Although there are infrastructure issues, the most successful clients are already ahead of the curve and seriously considering Vietnam. Of course, it is not best for all products and situations, just as China wasn’t best for all situations previously. If you are starting to see price increases in China and are concerned about the quality and reliability as China is struggling, it is definitely something to consider. Consider this fact – many Chinese companies are moving production to Vietnam.  Obviously there is something to be said for evaluating this source of supply.

Vietnam likes manufacturing and the United States. One of my proactive clients has been moving a significant portion of their supply from China to Vietnam over the last year. They started the process before the tariffs because they expected to save significantly with Vietnam production.  However, they really looked like heroes to their Board when they also beat the Chinese tariffs with the move.

This does NOT mean it will always make sense. We also have clients who outsourced to China a long time ago when it was the latest “fad”. In fact, the tide turned over the last several years.  The total cost of the product as well as the gains in customer satisfaction of sourcing closer to customer demand (typically in N.A.) makes a lot more sense.  Unfortunately for them, most of the companies in this situation haven’t changed supply yet due to capital and infrastructure costs and related efforts to move the source of supply. Yet it can be done. Our client reevaluated and started the transition to Vietnam. Recently, the tariffs are forcing several to re-think the China strategy, but is it “too late”? Are you going to wait for the next tariff scenario where you are on the defensive or are you gong to proactively reevaluate your entire strategy?

Certainly part of what you’ll need to evaluate is your working capital requirements. How does China compare with Vietnam? Both require an extended supply chain. Generally speaking, the longer lead times to cross the ocean carry working capital requirements. As customers become more demanding, you’ll need to consider inventory as a key component to your sourcing decisions. Pick up some tips and strategies in our recent article ” Inventory Management as Fashionable as Automated Intelligence for Distributors” for ACHR News.

Getting ahead of the curve might be the only avenue to success. When looking at China vs. Vietnam, it is quite clear that China is significantly larger and has far more manufacturing capability.  Yet, those early to Vietnam won’t have to worry about this particular issue.  And, of course Vietnam is racing to catch up.

Whether you have sourcing in China, Vietnam or neither, the underlying point is essential. Are you constantly revisiting your supply chain strategy? If not, you’ll likely be left following your competitors. Instead, consider future-proofing your manufacturing and supply chain business. Stay tuned and read more about it.

If you are interested in discussing a supply chain assessment, please contact us.

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Do You Have a Network?

January 17th, 2020

 

Do you have a network of people you can go to for answers, help, introductions, and more? My network is not only very important to my business but it is also very important for my personal life. Starting with business, I can definitely say that LMA Consulting’s success is 100% due to my network, meaning my colleagues (former employers, groups, etc.), clients, family and friends.  If you aren’t paying attention to people, you might as well hang up your hat!

With that said, you MUST be genuine. I’ve seen people who seem to be connecting strictly for business or to “sell” something. They never do well over the long term. On the other hand, if you are well-respected and genuine, people will go the extra mile for you (just as you will for them). One of my best decisions early on in my career is that I “kept track of good people”. It is probably the best decision I made in building my business and creating an enjoyable career.

I’ve always believed it is key to both professional and personal success, but lately it has certainly proven true! A family member had a stroke, and several people in my network helped find the best care, navigate medical processes, and much more. A close friend needed help in navigating an unpleasant work situation, and several folks provided assistance and resources. A colleague got my aunt connected with the best breast cancer doctors in Boston (and had to go to her ex-husband to do it!), a few colleagues connected me with resources to resolve house issues, several colleagues have provided resources, referrals and information for family and friends related to finance, taxes, internships, jobs and more. I totally appreciate my network. Thanks to you all for being there!

One Tip to Implement This Week:
Why not take stock of your network? Don’t worry so much about who you can go to for issues. Instead, think about what you can do to provide value to the people in your network. Show them that you appreciate them. Why not start there? It is far more interesting to provide value than it is to receive value – although I am very grateful you exist when the need arises.

When I first started with a group of trusted advisors (ProVisors), I wondered how I would ever be able to help some of the professionals that didn’t relate to my focus in manufacturing and distribution/logistics. Over time, I realized that there are countless ways to provide value to people. Simply introducing connections where you think they might be able to provide value to one another is a great start. Why not think about one person and find a way to provide value. Start today!



SIOP for Revenue Growth & Predictability

January 16th, 2020

We have received quite a few calls lately with the underlying theme of revenue growth and predictability. And, it got us thinking: Doesn’t every executive want revenue predictability and growth? Certainly the successful ones do!

If your revenue is difficult to predict from week-to-week, month-to-month and year-to-year, it might be time to think about how to design and implement a SIOP (sales, inventory and operations planning) process that will deliver these results for your business.

Similar to lean, the SIOP methodology alone is useless. Perhaps worse than useless because it might get your hopes up. On the other hand, if you think through how to design and implement the process so that it “works” in your business and supports your bottom line results, it might put you over that stretch target of revenue growth, profitability, or working capital effectiveness. At a minimum, it will align your resources and bring clarity and predictability to the situation so that you know which levers to push or pull to drive results.

How does SIOP enable revenue predictability?

  1. Demand plan: It starts with a demand plan. Once you align all sorts of disparate inputs to your sales forecast (within your organization, with your customers and supply chain, with the market and with your data and information), you will have the best view of your demand plan feasible.
  2. Supply plan: Since you align your demand plan with your supply plans (staffing, overtime, machinery, equipment, storage, supply base), you are much better equipped to deliver the demand plan with high levels of customer service and profitability.
  3. Metrics: SIOP incorporates the monthly review of key metrics related to demand and supply, so all relevant parties remain aligned on critical data points and progress.
  4. Continuous feedback: Since there are weekly activities with a monthly cadence, as business conditions change, any relevant and noteworthy changes and nuances are naturally incorporated into the plans and visible to all relevant parties.
  5. It’s about people; not data: As the EVP of Operations at Fender Guitar says in our interview below, it is all about the people. Although clients typically worry about syncing up data sources (which has to be a part of the process), the most important part of the process is to align people. Once Sales, Marketing, Business Development, Customers, R&D/New Product Introduction, Operations, Finance, and Suppliers are aligned, suddenly all the data concerns disappear.

 

As executives are concerned about potential recessions, impacts of global volatility, the Skills Gap and the Amazon Effect, future-proofing their manufacturing operations and extended supply chain is on their mind. SIOP is one way to future-proof your business so that it remains predictable while minimizing risk and maximizing outcomes.

Why not consider a SIOP assessment to fully understand your potential? Following the assessment, conduct a pilot SIOP process to see the what benefits emerge.  The value will become clear. If you’d like assistance to stack the deck in your favor with this process, please contact us.

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NOW is the Time to Invest in Employees

January 13th, 2020

Are you investing in your employees? If you have employees who want to do a good job but who don’t have the tools and skills to accomplish this goal, you’ll end up with frustrated employees who are not engaged. What percentage of your employees do you think are in this position? In our client experience, 70% of employees fall in this category!

Frustrated and not actively engaged employees do not deliver results. Not only are you wasting incredible talent, but you have unhappy employees to boot. There are countless statistics that tell us the dramatic impact of unhappy employees. According to a SHRM article, highly engaged employees were 5 times less likely to have a safety incident. In a separate example, increased employee engagement at Caterpillar saved the company millions in decreased attrition, absenteeism and overtime. It is certainly noteworthy!

According to our featured interview with the EVP of Operations at Fender Guitar, investing in employees in all seasons is key to success. Listen to our interview and how many of the core takeaways relate to investing in employees. It should give us pause to re-think our focus on all sorts of programs that don’t seem to deliver results. Instead, we should focus on our employees.

So, what are some ways we can invest in employees? Here are a few we’ve seen to deliver exceptional value:

  1. Gratitude – A simple thank you can go a long way!
  2. Specific feedback – Although all managers seem to fear providing feedback, the best employees value constructive feedback as well as genuine and specific positive feedback.
  3. Assign a mentor – This can bring meaningful and profound change and results. People learn by watching examples and trying new ideas with immediate feedback. That is what mentoring is all about when done well!
  4. Training programs – Building skills and gaining fundamental concepts are the essential building blocks of success. For example, for supply chain and operations professionals, the Association for Supply Chain Management’s APICS certificiations are best in class.
  5. Special programs for the “best of the best” – Instead of investing in our under performing employees by default, why not take the proactive approach and put together a special program with special experiences and training opportunities for your stars?
  6. Opportunities to try new approaches – One of the most important pieces to invest in employees is to allow employees to try new ideas. We must expect failure in our quest for success. Thus, it will require an investment of time, resources and potentially resolving the consequences of failures along the way.
  7. Celebrate success – Lastly, we should celebrate progress and success. As obvious as this seems, it isn’t commonplace.

Investing in employees is the best way to future-proof your manufacturing and supply chain. In fact, it is also the best way to future-proof your technology road map. Perhaps it is time to re-think your approach to investing in employees AND automation. These are not separate concepts as robots and autonomous vehicles will not work separately from human capital and talent. The most successful executives understand that the secret to success is how to invest strategically into both.

If you’d like an assessment of where you should invest (time, resources, money) to maximize your employee engagement and your business value, contact us if you’d like to assess your situation.

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