Category: The Strongest Link in Supply Chain

The Global Logistics Landscape

February 15th, 2019

In the past two weeks, I attended the CSCMP State of Logistics event, am preparing for the Future of Supply Chain & Logistics reception event as part of the leadership team and have debriefed with LMA Associate, Elizabeth Warren who attended the State of the L.A. Port and the State of Long Beach Port events. To summarize, I’ll borrow from the Port of L.A.: “Busier, safer, greener”.

Still number 1 and 2 in the U.S., the ports of Los Angeles and Long Beach increased volume last year to 9.5 million TEUs (twenty-foot equivalent units) and 8.1 million TEUs respectively.  With the threat of tariffs, there was a surge of imports around the holidays, creating record-breaking days in both locations and the second busiest month in history at Long Beach.

Significant progress has been made in terms of air emissions. From 2005 to 2017, diesel particulate matter has decreased by 88%; nitrogen oxide has decreased by 56%; sulfur oxide decreased by 97%; and greenhouse gas by 18%. In terms of targets, there is a goal to reduce greenhouse gasses by 40% in 2030 and 80% in 2050. Certainly, California leads the way when it comes to green and sustainability.

Logistics is around 7.7% of GDP or $965 billion. It has increased around 20% since 2006 yet decreased as a percentage of GDP by 30%. In comparison to other countries, we are far lower with Japan the closest around 11% and China the furthest around 18%. E-commerce is increasing around 15% per year, and it carries high supply chain costs around 25-30% of e-commerce sales.

All modes of transportation were up (airfreight, rail, trucking)! With that said, trucking is 76% of transportation spend and is the 100 pound gorilla. Rates have been on the rise, capacity is tight and shippers have to be more proactive. There are lots of technologies being explored but no near-term, viable solutions to resolve the issues. Again, similar to the ports, there are countless conversations about sustainability.

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

Global logistics is relevant to GDP and to every business that produces, distributes and sells products. Whether an aerospace manufacturer with multiple outside service steps all requiring transportation or Walmart, requiring a supply chain sourced both locally and from afar as well as grocery delivery on the customer side, without logistics, business will cease.

In today’s Amazon-impacted marketplace where quick turnaround, short lead times and frequent order changes are the norm, re-thinking your manufacturing and extended supply chain footprint is becoming a necessity. Whether re-evaluating make vs. buy decisions, re-configuring sales channel structures or revising inventory fulfillment practices, logistics is one component that can no longer be an afterthought.  

In our view, those clients with a resilient supply chain will thrive in this new normal business environment.

To learn more about how to create a resilient supply chain to navigate disruption and achieve peak performance, check out our new series or contact us for customized expertise.



UGG Founder, the Amazon Effect in Healthcare & Why Demand is Key

February 8th, 2019

In listening to the UGG founder, Brian Smith talk through his trials and tribulations in developing the amazing UGG brand, a few themes emerged.

  1. Resilience in finding pivot points when obstacles emerged played a vital role in creating the UGG brand.  
  2. The benefit is what matters; not the product.
  3. Creating demand goes back to being a leader in the category when the market shifts.

What a great story!

Next, related to the demand theme, I spoke to the Professional Women in Healthcare (PWH) Orange County group about the Amazon Effect. As a former Executive of a healthcare manufacturer, it was fun to have an interactive discussion with these leaders. Interestingly, healthcare manufacturers and distributors are experiencing the same issues as aerospace, building products and food & beverage. How to keep up with demand (or preferably get ahead of it) while increasing profit and accelerating cash flow (not having a bunch of inventory tied up for no benefit) is the topic on everyone’s mind. Aligning demand and supply and related parties is the trick!

Demand emerges as a common theme. Therefore, I’d like to invite you to an executive lunch centered on the topic, “Increase Demand“. I am speaking on a panel of experts on driving demand in your business. Use early bird promo V25 for a 25% discount. Hope you’ll join us there.

What Should We Consider and/or What Impacts Could Arise?
Every client has a focus on demand. Typically, they are thinking about how to grow the business in a scalable, profitable way, which leads to a mountain of questions about forecasting and how to get in front of demand.

Interestingly, it ALL goes back to one place, the customer. Do you have a passion for your customers and creating a superior customer experience? If so, demand will grow. If not, it won’t. In watching countless organizations over the last 14 years in consulting, I’ve yet to see one that succeeded long-term without this essential ingredient. Have you?

If you have a passion for the customer as the CEO or General Manager, that is a great place to start. However, it is not enough. Your sales team is relevant but the most successful clients view the entire organization as the sales team with a passion for the customer. Ask a trusted colleague to visit your facility. They will be able to ‘feel’ whether there is a passion for the customer or not. Ask them.

If the most successful executives have a focus on demand, it is worth noting. Are you providing lip service to the customer or are you creating this view within your organization? There is also a tremendous amount of focus going into understanding demand with forecasting tools, analytics, artificial intelligence, and more. Do you have a clear path forward as it relates to demand? Of course, this topic also relates strongly to creating a resilient supply chain. Only the most successful companies predict and proactively engage customers to get ahead of demand.

To learn more about these strategies, check out our new series:



Manufacturing Adds the Most Jobs in the New Year

February 1st, 2019

According to Industry Week, manufacturing employment increased almost 300,000 over the last year!  This is after increasing around 200,000 the year prior – more than a 40% increase. This is much more significant than the numbers alone convey because, according to the National Association of Manufacturers, for every $1 spent in manufacturing, $1.89 is added to the economy.  Manufacturing is hot and relevant.

Not only is manufacturing relevant to the economy, it is relevant to the customer experience.  Have you thought about how much more flexible you can be with your customers’ desires if you can manufacture on the fly? There won’t be a better time to ride this wave to success. Are you debating or jumping on?

What Should We Consider and/or What Impacts Could Arise?
Whether you are in manufacturing or related to manufacturing or impacted by manufacturing, you should pay attention. As manufacturing surges and takes on a new relevance in the economy and to your ability to provide a superior customer experience, you might have opportunities to grow and scale your business to new heights. Have you thought about how you’ll take advantage of these opportunities?  Will you be a follower or an innovator?

At a minimum, being informed about manufacturing and supply chain industries, latest trends and opportunities seems like a good idea.  Join an organization such as the Association for Supply Chain Management (ASCM/APICS) and participate with classes, tours and webinars, read articles on the topic (there are hundreds, if not thousands, in the archives), listen to experts, pick up the Wall Street Journal or attend an industry event. Why not kick off the New Year informed?  Being informed is part of what’s needed in creating a resilient supply chain. For additional strategies to create a resilient supply chain, check out our new series:



The News is Paying Attention to Manufacturing: Are You?

January 21st, 2019

It wasn’t too long ago that no one talked about manufacturing. In fact, people thought it had moved to China.  Now, we see it in the headlines frequently. A quick glance in just the past few weeks yields:

  • Airbus is pulling out all the stops to try to make their 800 plane target before year end
  • Durable goods orders rose .8% in November
  • Manufacturing is key to New York’s job creation of 27,000 in energy storage
  • Manufacturing is driving Vietnam’s decade-high growth
  • China’s industrial profits drop for the first time since 2015

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

If you are in manufacturing or relate to manufacturing, pay attention!  There is plenty of opportunity to grow and thrive in today’s business environment. What are you doing to take advantage of the vast potential? It might be that time to take a risk and speed by your competition. Who else will be able to customize and deliver rapidly with a superior customer experience if not you?

Are you searching for these opportunities?  If you create a resilient supply chain, you’ll have a far greater chance to “see” the opportunities as they arise AND you’ll be well-positioned to take advantage of them.  Very few companies predict well but the best ones are agile and navigate quickly and successfully to achieve peak performance while the rest fall by the wayside. For additional strategies to create a resilient supply chain, check out our new series:



Top Two Issues According to Wells Fargo Customers

January 18th, 2019

In listening to a Wells Fargo commercial banking executive’s speech, he mentioned that the two top issues as we head into 2019 according to clients are:  labor (shortages) and cyber-security. This isn’t surprising, given what our clients face. We cannot think of a client who isn’t experiencing some sort of talent shortage.  Luckily, the same is not true for cyber-security.  Yet, it is a relevant, pressing and serious topic. When it rains, it pours BIG TIME when it comes to cyber-security.  Are you proactively addressing these topics?

What Should We Consider and/or What Impacts Could Arise?
For talent and labor shortages, it is often more complex than our clients need “2 more people”.  Invariably, they might have the “right” number of people in total.  Yet. they may not have what they need.  One of the following is often the issue: 1) Skills aren’t allocated properly. 2) There isn’t enough of specific skills and more than needed in others.  3) Cross-training is lacking. 4) People are not working to their maximum (or even regular) potential.

One of the best places to start is to understand your situation.  Don’t think about whether you can afford it or where you’ll cut back to afford it.  Just start by understanding your situation. We often go into clients and find “hidden” talents. Actually,m it occurs more frequently than you’d think. The good news is that these “hidden” talents can often be reallocated for the benefit of the organization almost immediately – at least a lot quicker than hiring and assimilating new talent.  We also typically find people who are not working to regular, let alone, maximum potential. Why? Because they might be working in an area that doesn’t align with their best skills or they work for someone who is stifling their progress. Finding these hidden opportunities can avoid making new hires for the vast majority of clients.

Beyond talent, you had better protect your company from cyber-security threats.  It is as simple as “get an expert immediately if you aren’t already working with one”, no matter your organization’s size.  Small organizations are more likely to be attacked! I’m happy to refer you to a top notch organization. Contact me if you are interested.

Are you searching for these opportunities and addressing risks?  They will certainly create a more resilient organization. For additional strategies to create a resilient supply chain, check out our new series: