Category: Future-proofing MFG & Supply Chain

Ramping Back Up

August 22nd, 2020

We are seeing business just beginning to ramp up. As said in our eBook, Future-Proofing Manufacturing & Supply Chain Post COVID-19, this is not an on/off switch. We should turn the dial carefully (as quickly as possible while accounting for the end-to-end supply chain). Every situation is different.  Yet, common concepts exist and preparation is required. A few highlights include:

  • Employee readiness: There are several rules and regulations in addition to considering your employees’ mindsets and readiness.
  • Customer readiness: Clearly, without predictable sales volume (at least to an 80/20 standpoint at a high level), it is impossible to know what to produce, purchase, store, prepare cash reserves etc.
  • Supplier readiness: Of course, no matter how ready our customers and employees, if our suppliers aren’t ready (and our suppliers’ suppliers), nothing will be accomplished.
  • Financial readiness: It sounds obvious but we also need the cash to operate our end-to-end supply chain successfully.
  • Risk tolerance: We are pushing clients to assess risk to make prudent decisions.  Yet, in order to be successful, they will have to take on additional risk. A no risk policy will result in bankruptcy!
  • Resiliency: Start the process of future-proofing your manufacturing and supply chain and make a commitment to continuously improve. Without this mindset, do not turn the dial.

Your most important job in the foreseeable future (minimally 9-12 months) will be to navigate this ramp up to the new un-normal, and even more critically, the most successful clients will take the bull by the horns and create their future.



The Future of Technology

August 20th, 2020

Technology is a tricky topic. On one hand, almost everyone has put technology and ERP implementations on hold due to concerns about COVID-19 impacts and to conserve cash. On the other hand, it is the best time to gain employees’ attention and focus on upgrading technology to scale the business, create a superior customer experience and deliver bottom line results.

Kellogg or Post?
As I said in my eBook, Future-Proofing Manufacturing & Supply Chain Post COVID-19, the Kellogg vs. Post story from the Great Depression provides an excellent example to ponder. In the 1920’s, Kellogg and Post dominated the market for cereal which was still a relatively new and untapped market. Post reigned in expenses and Kellogg doubled its ad budget and pushed its new cereal. Even as the economy hit bottom, Kellogg’s profits rose 30% and they become the dominant player.  Do you want to be Kellogg or Post? The morale to the story is NOT about dollars invested. It is about the opportunities of investing resources (which can be simply in the form of employees’ focus) in future success.

Which Technologies Provide Immediate and Long-Term Value?
Of course, the answer depends on your industry, company, current infrastructure, your customers’ evolving needs, your suppliers’ evolving needs and more. Why not perform a rapid assessment of what makes the most sense for your business and take one important step forward? As I said in my eBook, Newton’s Law is relevant. Objects in motion stay in motion whereas objects at rest will stay at rest. You must take steps forward, no matter how small.

Let’s highlight a few of the more likely technologies to provide immediate value and long-term value:

  1. Further utilize & expand your ERP system: No one uses 80% of their system.  Most organizations utilize only 20%. Find the next 1% that will yield a significant benefit to your customers or bottom line. Clients are gaining significant value from this simple step.
  2. B2B customer portal/ B2C e-commerce: No doubt about it. The ONLY growth area across the board is e-commerce. In addition, what could be more important than visibility of orders for your B2B customers? Delays will result in lost opportunity!
  3. Business Intelligence (BI): We are overloaded with data. The issue isn’t having data, it is making meaningful decisions and formulating plans based on the interpretation of data. BI will bring meaning to your data that translates into customer and profit opportunities.
  4. Artificial intelligence (AI) & Human Learning: In today’s environment, predictive capabilities produce VASTLY greater results than simply analysis and static plans. Demand planning/ forecasting, predictive maintenance, cash flow forecasting, and the automation of tasks are enhanced with AI.
  5. CRM: There has never been a time when understanding, staying in touch with and being on top of evolving customer needs has been more important.
  6. Digital Twins: Virtual replicas of physical devices that technology gurus can use to run simulations before actual devices are built and deployed. Read a fascinating article about the applications in logistics.
  7. Systems to gain efficiencies: WMS (warehouse management), TMS (transportation management), rate shopping, MPS (master production scheduling)/ MRP (material requirements planning)/Inventory planning, replenishment including VMI (vendor managed inventory) and more.
  8. 3D Printing/ Additive manufacturing – If you can produce a customized product on demand close to customers, you win in today’s Amazonian environment. Either way, it speeds up R&D.

Read our eBook, Future-ProofingiManufacturing & Supply Chain Post COVID-19 to read more about technology as it relates to successfully emerging and thriving post-COVID-19. Explore these concepts further as you start thinking through your technology roadmap.

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The Rise of E-Commerce & WMS Popularity During the Pandemic

Systems Pragmatist



Why SIOP is Critical to Thriving During & Post COVID

August 12th, 2020

COVID-19 has disrupted every business. Some are growing far faster than supply can keep up, while others have dropped like a rocket. Still, others have almost identical dollar volume yet double the number of orders at half the order size, creating significant disruption in warehousing, shipping and transportation. And yet others might have less severe changes in volume with certain customers thriving and others dormant – all creating mix disruption.

The supply side is no different. Previously reliable suppliers can be suspect at best. Previously high-quality, low-cost suppliers have skyrocketing costs as airfreight is required to keep customers’ satisfied. Risks have increased dramatically with the uncertainty of cash flow and long-term ‘institutions’ of the industry are disappearing overnight. With this high level of disruption across both demand and supply, misalignment has run rampant, costs are increasing and customers are frustrated.

SIOP (Sales, Inventory Operations Planning) Cuts through the Disruption
You know the story. The busier we get, the less we have time for improvement yet we spend double or triple the time to achieve the same outcome because we can’t set aside the time required to start or maintain an improved process. I’ve been there and am familiar with the excuses! With that said, STOP and look around you. You are on a hamster wheel with no end in sight. Implementing SIOP, even if simplified to what is achievable under current conditions, cuts through the disruption to stabilize your supply chain.

What is SIOP?
Quite simply, SIOP is about finding a way within your environment to realign demand with supply. You have to start with demand or you will forever chase your tail. To simplify the best practices across industries (aerospace and defense, building and construction products, food and beverage, healthcare products), geographies, company sizes that apply to manufacturing, supply chain, logistics and service organizations with supplies, you should focus on these keys:

  1. Proactive management of demand: Talk with customers.  Find out about your customers’ customers and every customer type within your channel until you get to the end customer (consumer, business using your product, patient). Ask about and observe evolving customer needs. Review historical trends.  And, put a stake in the ground with a starting point forecast. Outcome: typically 12-18 month rolling forecast
  2. Proactive management of internal supply: Talk with your internal teams. Understand changing capacity and staffing levels (manufacturing, warehousing). Realign temporary and contract assistance.  Understand your resiliency to changing demand (overtime, increasing staffing, efficiency improvements, maintenance and engineering support, etc.). Realign with R&D/product development requirements and your support resources. Outcome: typically a capacity plan (production, storage), high-level staffing plan and key decision plan (make versus buy, product/customer transitions, machinery and equipment plans) for at least as long as your longest lead item – 12-18 months.
  3. Proactive management of supply partners: Talk with suppliers. Find out about your suppliers’ suppliers capabilities, their likelihood to meet schedules, ability to meet cash flow needs and risk of shutdown (whether temporary due to COVID-19 or another disruption or permanent (going out of business)). Outcome: typically a sourcing and supply plan by key suppliers/ commodities for at least as long as your longest lead item – 12-18 months.
  4. Proactive management of your logistics network partners: Talk with transportation partners, brokers, 3PL/ 4PL partners and understand the extended supply chain, potential risks, possible options as disruptions occur, etc. Outcome: typically a logistics network and goods movement plan for at least as long as your longest lead item – 12-18 months.
  5. Take stock of inventory: Do you have strategic stock of critical items? Items without a robust backup supplier? Items in countries of higher risk of shutdown? Are you so busy running in circles that your slow moving and obsolete is expiring under your nose? Outcome: typically an inventory investment plan for 12-18 months.

Pre-COVID-19, clients went through a SIOP cycle with a monthly cadence. The typical processes included:

  1. Demand review meeting
  2. Supply review meeting
  3. Alignment of demand and supply (not always requiring a meeting)
  4. Inventory review meeting (often incorporated into the supply meeting)
  5. Executive SIOP review meeting (in some cases, quarterly made sense)

During COVID-19, we have taken these same concepts and adjusted to changing conditions. No two clients are alike in what makes sense to rapidly realign demand and supply and maintain this alignment.  Yet, there is one item in common across the board:

A weekly alignment on just the critical customers, internal resources, suppliers, logistics network partners and review of inventory

Read more about SIOP and related concepts in our eBook, Future-Proofing Manufacturing & Supply Chain Post COVID-19. If you’d like a rapid assessment and recommendations for your situation, please contact us.

 

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Future-Proofing Your Supply Chain

Eagle Eye Strategic Focus



People are on the Move

August 9th, 2020

Do You Know If Your Best People are Looking for a New Job?
You better believe it! There is a trend across clients and colleagues that the best people are on the move! COVID-19 has disrupted the landscape. Whenever multiple clients experience similar situations, we take note. There is no doubt that the pandemic has spurred smart clients to hire top talent and top talent to look for new opportunities. In the last few weeks alone, several clients and colleagues have lost valued talent.

Why is Talent Leaving?
From what we’ve observed, there are three key reasons.

  1. COVID-19 inspired reevaluation of life and career – COVID-19 has made people rethink their life. If life is short, are we doing what we want or are we simply going through the motions? This is a tricky one, as they are leaving for the greener pastures of retirement, new industries, 180 degree changes in job functionality and more.
  2. Evolving conditions associated with COVID-19 & the likely future – If virtual is here to stay (at least partially), it changes everything. Commutes are less relevant if we only go into the office one or two days a week or once a month in some cases. Why not move to the virtual dream job?
  3. Frustration with current conditions: Interestingly, #1 and #2 are entirely new conditions from COVID-19 whereas #3 has long been an issue. People leave people, not companies. People also leave frustrating circumstances where they don’t think they’ll have an impact on the future. COVID-19 has inspired less patience in top talent.

What Can You Do?
Talk to your people. It has never been more important. Do NOT postpone a quarterly performance check-in conversation for an urgent board request. If you aren’t talking with your people, they will start talking to other potential managers who appreciate their talents.

Create a vision for the future.  Make sure each employee knows how he/she fits into that future. Be excited about the opportunities and involve your team in creating that future.

Provide resources, education and training, mentoring and opportunities for advancement. If you don’t, you will be searching for replacements. Tailor it to each person and his/her desired career path.

The Bottom Line: Keeping your top talent will no longer be easy. Put immediate focus on this critical topic.

Listen to our video on top talent and read our eBook, Future-Proofing Manufacturing & Supply Chain Post COVID-19 to gain additional insights on talent, leadership, HR and more.

Please send your feedback, stories and ideas. We believe manufacturers have a unique opportunity for growth and success if they innovate and focus on the opportunities during COVID-19. To achieve this potential, you have to start by keeping your star performers.

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Your People During the Coronavirus Pandemic
Profit Through People



Manufacturing Expert, Lisa Anderson, Forecasts U.S. Manufacturing Resurgence COVID-19 Showcased Technology and Innovation as Key Contributors

June 30th, 2020

CLAREMONT, CALIFORNIA – June 30, 2020 –  Manufacturing and Supply Chain Expert,  Lisa Anderson, MBA, CSCP, CLTD, president of LMA Consulting Group Inc., forecasts a resurgence of manufacturing in the U.S.  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.

“The COVID-19 pandemic turned the supply chain on end.  It forced manufacturers to rethink their strategy, their products and their future.  Those who took the time to identify opportunities and used this unique circumstance to leverage technology and innovate are already seeing results. Innovation has always been the key driver to manufacturing success.  We are now seeing it pay off, and, it’s just the beginning,” stated Ms. Anderson.

Innovation has opened not only new product possibilities for manufacturers, but also new relationships for cost reductions and improving the customer experience.  From suppliers and 3-D printing to transportation options due to reshoring, manufacturers have an abundance of opportunity for differentiation and growth.

“China has fallen from favor not only due to COVID-19 and the supply chain disruption, but also because of the arduous policies they implemented early in the year which essentially removed all protections of intellectual property and patents. There has been talk about doing more business with Mexico, but Mexico is best at assembly,” she said.  Manufacturing shifted to China and other countries due to high labor costs in the U.S.  Technology and robotics have leveled U.S. manufacturing costs.  “It clearly comes down to innovation and leveraging technology. U.S. manufacturers are strong and smart.  Sometimes it just takes an extra push or, in this case, an event to force out-of-the-box thinking,” she concluded.

Ms. Anderson recently recorded another video in her What’s Happening in Manufacturing & the Supply Chain series highlighting Reshoring.

 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