Category: Eagle Eye Strategic Focus

Coronavirus & Economic Impacts

April 1st, 2020

After concern about health and safety is worry about the economy and our livelihood. Thus, we thought we’d address this topic with the latest information by the experts….and a few of our thoughts thrown in for good measure.

According to the economic update by the Inland Empire Economic Partnership, “When Will We See the Light at the End of the Tunnel?“, we are headed into a recession (not surprisingly), but all hope is not lost! In essence, the report talks about two scenarios.

  1. Optimistic scenario: It assumes a decline in infections by early April with the virus under control by June, passing of the stimulus package, existing medications adopted to treat the serious effects and a vaccine ready within a year. In this case, we’ll go into a recession but the economy will start turning up in the 4th quarter or at least by the first quarter of 2021. It will be a V shaped downturn.
  2. Pessimistic scenario: In essence, the assumptions above do not come true, and the vaccine takes 18 months to develop. Certainly, the outlook isn’t as rosy with this scenario, and there won’t be a recovery in 2020.

We all hope the optimistic scenario is the likely outcome. As the report states, the Wall Street Journal surveyed 34 professional economists and categorized them into “pessimistic”, “baseline” and “optimistic”, and the IEEP “optimistic” outcome is more in line with the Wall Street Journal “pessimistic” outcome, and so this signals hope.

As it relates to businesses, non-critical businesses are certainly going to struggle until the coronavirus is under control. In several states, these non-critical businesses are shutdown. In some cases, employees have been let go; others furloughed; some are working remotely if feasible and some are finding creative ways to keep the business running or are changing directions as best as possible. Clearly unemployment claims are surging.

With that said, more opportunities are born during recessions than any other times so keep your eyes open. For example, perhaps you can tweak your products so that you can supply some critical products during this period. Or, perhaps you can develop a new product that can launch as soon as businesses are re-opened. Or have you thought about a new service that could make you stand out from the crowd as businesses start to ramp up? Or how about stealing top talent? I just love the story of a CEO of one of my clients. He hired a talented engineer during the Great Recession when he was let go and no one else was hiring, and that resource helped him excel to first in his market following the recession.

For those businesses considered critical, the picture is a bit brighter. For example, I am working with a food bar manufacturer, and people are stockpiling food bars. Thus, volume has spiked for food bars sold through grocery stores and Costco. In their case, it has trailed off for weight management bars and so they have a mixed bag. Certainly, toilet paper manufacturers cannot keep store shelves stocked! Medical products are also in high demand.

The $2 trillion dollar stimulus package was signed into law. There is assistance for individuals, businesses and workers. We are continuing to post resources to explain the benefits. I thought this article did a good job in describing the stimulus benefits (thanks CLA), and there is loan availability and forgiveness included as well. Stay tuned for updates on our coronavirus resources webpage.

Stay tuned with our coronavirus resources webpage. We will continue to add the latest economic forecasts, stock market analyses and more. However, instead of fretting about the future, take a step back (after all, you are probably in lockdown) and think about how you should reposition your business for the future. It is an opportune time to rethink strategy. If you’d like help to discuss further, please contact us.

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Eagle Eye Strategic Focus



Future-Proofing Your Skills Gap

February 17th, 2020

Since talent has become a strategic topic for any executive who wishes to thrive in 2020 and beyond, it should top of mind for every manufacturing and distribution business owner or executive. Have you put time aside to think about this critical topic with your top team? If not, stop now and do it!

We have recently re-surveyed manufacturing and distribution executives, hiring managers, and related trusted advisors.  There is unanimous agreement that the skills gap remains. We also talked with business owners and executives from a wide range of manufacturing and distribution industries.

Talent is a hot topic for several critical reasons:

  1. Demographics – As baby boomers retire, it is leaving a gap in experience and expertise. It is a struggle to absorb or replace adequately.
  2. Technology – With the increase in technology required to run our businesses while providing not only a superior customer experience to grow but also with high levels of profitability and working capital, having talent with the skills to maximize the use of technology is essential. It is also changing the makeup of the talent required.
  3. Skilled Trades – There is a significant gap in the skilled trades such as CNC operators. There hasn’t been enough focus on the high school and community college career path into the sector. Those that find a way to bridge this gap have a leg up on the competition.
  4. Leaders – Whether high-tech or low-tech, leaders play a pivotal role in performance. It is FAR too often we see executives trade down to save money instead of looking at the return on investment over a multi-year period!
  5. Complexity – We live in a global, complex world with increasing rules and regulations to navigate.

How can we future-proof talent? There are a few priorities we should pursue immediately.

  1. Think Ahead: Don’t hire, retain and train for what is needed today. Instead, focus on where you’ll need to be in one year to thrive.
  2. Partner: If you need skilled trades, technology savvy resources and the like, consider partnerships. Successful executives have set up programs with local community colleges, partnered with trade associations such as the Association for Supply Chain Management (APICS – listen to the video below), collaborated with a makerspace academy such as Vocademy, brought in trsuted advisors, collaborated with competitors and more.
  3. Evaluate Technology: Evaluate which technology will provide a return on investment and spur profitable growth. There is no need to chase shiny objects but you should think prudently about how to accelerate success.
  4. Mentor: There is little better than establishing a mentoring process. Although training can be effective, people learn quickest through behavioral change modeling and feedback.
  5. Be attractive: You are in competition for your talent – both retaining top talent as well as finding new talent.

Proactively addressing this Skills Gap and future-proofing your manufacturing operations and extended supply chain is cornerstone to growth plans.

Lately, we’ve seen an increase in interest for an organizational structure and talent assessment to ensure the organization is shored up to deliver performance plans. If you’d like assistance in evaluating your readiness to meet business objectives, please contact us.

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The Strategic Use of Data

December 13th, 2019

Have you thought about the strategic use of data? If not, you are missing a HUGE opportunity. Even in the most fundamental of businesses, having the ‘right’ data at the ‘right’ time in the ‘right’ place can not only enable quicker, more effective decision making but it can transform your business model.

Listen to David Libatique, Deputy Executive Director of Stakeholder Engagement of the Port of Los Angeles talk about the strategic value of data in the video below (thanks to APICS Inland Empire Chapter for the footage from the Executive Panel and Networking Symposium).

This topic is not just related to the vast amount of data the ports could capture (although that could be pure gold to those stakeholders), but data in general. Every client has a system of some sort. Small clients might still be on QuickBooks or are looking for the best “starter ERP” for their situation whereas others require complex ERP for process manufacturing or configure-to-order environments. That system contains vast data that can “collect dust” in the ‘data warehouse’ or be put to good use to drive business value. Which are you doing?

Do not get overwhelmed by data overload! There is no doubt that 80% of clients have voluminous amounts of data that can employ multiple people in creating reports on a daily, weekly and monthly basis. We are definitely not advocating for this end result. In our experience, whether a $5 million dollar family-owned business or a multi-billion dollar enterprise, the strategic use of data is typically not on the radar. Oddly, the big companies might not be the report mavens whereas the small might not be as nimble as we’d think! Almost every client can improve when it comes to the strategic use of data.

Instead of getting lost in the data maze, perhaps we should consider a few questions:

  1. Where do you want your company to go?
  2. Are you assessing the ‘right’ data to know if your strategy holds water?
  3. Are you going in the right direction? How can you tell?
  4. Have you thought about your data source(s)?
  5. Do your sales people have “data at their fingertips” to ensure profitable growth?

Data isn’t going to lose its power. It has been several years since I heard the CEO of SAP, Bill McDermott speak about the value of data especially as it relates to customers. Nothing has changed. In fact, most ERP systems tout the critical importance of data and several have hired what they call “data scientists” to gain a competitive advantage in the marketplace. Will you evaluate your strategic use of data? Then go beyond your internal borders and expand to your customers, suppliers, transportation partners and you might just see a vastly expanded value in the strategic use of data. If you’d like assistance navigating this process, please contact us.

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Manufacturing Month & Interview with an Innovation Award Winner

October 25th, 2019

October is manufacturing month. We would be remiss if we didn’t highlight the power of manufacturing on our jobs, economy and quality of life.

Manufacturing is powerful in its influence and often overlooked.

Here are a few statistics from the National Association of Manufacturers to put the power of manufacturing in the proper light:

  1. Manufacturers contributed $2.8 trillion to the U.S. economy
  2. For every $1 spent in manufacturing, another $1.82 is added.
  3. The majority of manufacturing firms are quite small yet there are 12.82 million manufacturing workers in the U.S.
  4. Manufacturing workers earn almost $85k annually
  5. 92% of manufacturing employees are eligible for health insurance
  6. Over the the next decade, 4.6 million manufacturing jobs will be needed.
  7. Over the past 28 years, U.S. manufactured good exports have quadrupled
  8. Manufacturing in the U.S. would be the 8th largest economy in the world.
  9. Manufacturers perform 64% of all private-sector R&D
  10. Foreign direct investment in U.S. manufacturing exceeded $1.6 trillion.

We are excited about the future of manufacturing in the U.S. and in the Inland Southern California area. In fact, according to a Brookings study, it is one of the top two recommendations to create a consortium for advanced manufacturing excellence. We are working with the Inland Empire Economic Partnership, more than 10 local universities and community colleges, and partner organizations and exporters to bring this to a reality! We are currently seeking CEO and manufacturing executive involvement from an advisory capacity. If you are interested, please contact us.

To illustrate one success in manufacturing, we thought we’d highlight my interview with Ingram Micro after they won the Manufacturing Council of the Inland Empire‘s Innovation Award in Process & Resource Efficiency. As Innovation Awards Chair, it was an exciting day to see such innovation and success in the Inland Empire! In this interview, I had a great conversation with Ismael Reyes Jr, Lean Leader II and process expert, as well as Cindy Baughman, Senior Process Manager and finance guru at the Manufacturing Summit to explore further what they achieved with 33 lean projects, a $1 million dollars of savings and more. Watch the video.

In alignment with what we see with our clients, the 80/20 of success boils down to people and leadership combined with the appropriate process improvements to drive dramatic improvement to performance to customers and the bottom line. If you are interested in discussing a rapid assessment of what can be achieved in your organization, please contact us.

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The Amazon Effect Won’t Die!

October 4th, 2019

We have been writing countless articles about the Amazon Effect for many years as customers have the upper hand. In essence, if you cannot provide rapid, customized service with easy returns and ‘extra value’, you will be left in the dust. The needs aren’t going away. If anything, Amazon continues to raise the bar. Several companies such as FedEx, Walmart and others have announced same day and next day delivery. Target is redesigning stores and pick up areas so that customers can conveniently pick up purchases same day. Walmart is evaluating delivering groceries inside a customers’ home while they are at work. And, Costco has established a chicken farm to grow, slaughter and distribute chickens in an effort to eliminate the middle man for quicker, cost effective deliveries. However, this isn’t just about B2C and traditional e-commerce companies typically in industries such as consumer products and food and beverage. B2B companies expect Amazon-like service as well! Behind every B2B company is a person who expects B2C customer service.

Executives are still intrigued by the Amazon Effect. The reason executives still care is because it is getting harder and harder to remain competitive and profitable. For example, at the Manufacturing Summit, we recorded a series of videos from an Amazon Effect panel talking about these issues. Countless CEOs are expressing concerns about how to navigate these troubled waters. On the other hand, there are a few who are taking advantage of the situation to stand out from the crowd by becoming the disruptor instead of the disruptee. Which are you?

The Amazon Effect also teaches us that innovation is cornerstone to success. Not only does Amazon continually innovate and test new ideas, but some of these new concepts ‘stick’. As the founder of Netflix said, it isn’t that you set out to get the idea for Netflix and it is success all the way. The reason we are still talking about 3M and the famous sticky pad innovation is that it doesn’t happen that often, and 3M sets aside time and money for innovation as a part of their culture. Thus, we must get comfortable with trial and error. Of course, the error part is the problem. No one likes failure. Yet, it is just a part of the process. In fact, if you aren’t failing, you won’t succeed. Even Amazon fails. They test new markets, are willing to lose money and shut down programs. We just don’t hear about them as often as we hear about the latest and greatest new service or drone delivery! Are we really pushing the envelope far enough?

Have you thought about whether you have a culture that supports innovation? Check out our video series on innovation to gain some ideas. Gather your team to brainstorm out of the box ideas. Ask an expert to poke holes. Deliberately stimulate debate and organize trials. In essence, why not encourage maverick behavior within reasonable guide posts so that you set your team up for a “win”?

If you are interested in an Amazon Effect assessment with ideas to break from the mold, check out our free resources and/or contact us.

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