Category: Supply Chain Management

Manufacturing is on the Move

August 17th, 2019

 

Reshoring was at record levels in 2018! Manufacturers are starting to return as they see the total costs of offshoring combined with the rising costs in China and improved competitiveness of the U.S.

According to an Industry Week article by Harry Moser, almost 1400 companies announced the return of 145,000 jobs in the last year. This trend was starting to occur prior to the tariffs. Now, the tariffs are expediting the return. Manufacturers are also realizing they can gain a competitive edge with rapid customization close to their customer base.

Additionally, even in commodity products, companies are reevaluating how to remain competitive and diversified. Hasbro is the latest company to look at diversifying away from China. According to Industry Week, Hasbro, the largest toy maker globally, said that it planned to move from 75% to 50% production in China by the end of 2020. They are looking at Vietnam and India.

There is a transformation occurring. Executives are more concerned about relying on any one source of production (China), and are diversifying. Intel is reviewing its global supply chain.  And, there are rumblings that Apple and Amazon are working on a plan B.

What Should We Consider and/or What Impacts Could Arise?
Speed and agility are critical to thrive in today’s marketplace. Start thinking about how you can radically reduce lead times while accelerating cash flow (reducing inventory levels) and increasing profitability. It is no easy task . Yet, it is what is required to thrive in today’s Amazon-impacted world. What can you do to get ahead of this curve?

Like the big dogs from the Industry Week article, should you be thinking about diversification? Or should you be re-shoring? Or should you buck the trend and offshore while everyone else is re-shoring? There are many companies who would be in far better shape if they had taken that approach 10-20 years ago when every Board member wanted to see an increase in outsourcing. There are no perfect answers except to be thinking about these impacts on your industry, your supply chain partners and on your company so that you can take a proactive stance instead of a reactive one. What will you do to successfully navigate these waters?

Certainly, re-shoring, near-shoring and diversifying are topics related to creating a resilient supply chain. If you are interested in an assessment of your situation, contact us. You’ll find more information on these types of topics on our resilient supply chain series.



Is Your ERP System Scalable?

August 14th, 2019

erp successSince we happen to be working on 3 or 4 ERP system projects concurrently, the topic of ERP is top of mind.

Let’s start by saying upfront that we turn down ERP selection project requests. Not everyone needs a new system. Perhaps a process upgrade and better utilization of your current system will sustain your business for 3-5 years. If so, why divert attention? On the other hand, waiting “too long” will quickly spiral into disaster. How do you know which of these is your situation?

An ERP upgrade is one of the most significant initiatives a company can undertake, and the statistics aren’t good. 80% fail to achieve the expected outcome! Yet, if your ERP system isn’t scalable, hiding your head in the sand will lead straight to unmitigated disaster. Thus, it’s best to be proactive, diligent and strategic when it comes to this topic.

Selecting a system isn’t something to delegate to your IT person. Instead, it is something you must “own”. After all, if your system will support your resources so that you can grow the business with the peace of mind that your system will enable a high level of customer service with additional customer-friendly capabilities (such as a customer portal), support your #1 asset (your employees and partners) behind the scenes and allow your business to scale with minimal if any investment of time and resources, it suddenly becomes quite relevant.

The 80/20 of success relates to just two items:

  • Your critical success factors – what is unique to your company or industry and/or what drives customer differentiation and profitability
  • Your design and implementation partners – although the focus typically goes to the software, as with business, the 80/20 of success is with people and partners.

Having an ERP system that supports your business objectives is another key component of creating a resilient supply chain. If you’d like a rapid assessment on whether your ERP system will support your growth and business objectives, contact us. And please check out our resilient supply chain webpage.



Do You Have a Resilient Supply Chain?

August 11th, 2019

supply chain strategyThere is extreme volatility in today’s end-to-end supply chain.  Are you keeping up with all the changes?  For example, think about the following:

  • Tariffs & trade impacts
  • Data & security breaches
  • The Amazon Effect
  • New technologies such as 3D printing
  • Natural disasters, port strikes and more

The Resilient Supply Chain
Instead of allowing each of these incidents to impact you, we must create a resilient supply chain.  Are you proactively thinking about these topics?

  1. Agility– Instead of seeing agile as an IT or project management concept, we should be thinking about how to incorporate agility into every step / every piece of our end-to-end supply chain.  If a customer changes his mind, are we flexible enough to handle it?
  2. Speed – Is your supply chain set up for speed?  Customers are unwilling to wait.  I’ve found that I’m unwilling to wait anymore.  If I wait for a trusted advisor, service provider, subcontractor or even a client, it delays LMA Consulting. For us to be on the leading edge with clients, we must be ahead of the curve; not waiting for something that will be obsolete before we get it!  That is one thing we appreciate about our webmaster; he is speedy and understands priorities which is how we are able to announce a major content upgrade (thanks Scott).
  3. Predictive – In today’s complex world, we must also be predictive so that we are prepared from an 80/20 standpoint for the most likely unexpected events, trends and bumps in the road.  Thinking three steps ahead can go a long way in creating resilience.
  4. Collaborative – One of key components to creating a resilient supply chain with multiple partners is to collaborate.  There is no time to establish relationships and find ways to navigate volatility together if you haven’t already set a collaborative tone.
  5. Adaptive team – No doubt; the core to resilience is having an adaptive team where each members understands where he/she is headed and feels empowered to handle obstacles as they arise.

Have you thought about each interrelated partner, piece or parameter in your end-to-end supply chain?  How can you set it up to be resilient?



Manufacturing and Distribution Expert, Lisa Anderson, Confirms Inventory, Cost and Logistics Pressures in Supply Chain

July 12th, 2019

CLAREMONT, CA,  July 9, 2019 –  Manufacturing and Supply Chain Expert Lisa Anderson, MBA, CSCP, CLTD, president of LMA Consulting Group Inc. confirms that supply chain resiliency requires acute attention to inventory and cost pressures for manufacturers and distributors.  As predicted in her 2019 forecast, “Manufacturing & Supply Chain in the New Normal”, ever-changing customer needs, increased expectations, tight labor and transportation challenges are the ‘new normal’ and key issues for manufacturing and the supply chain.

Economic volatility and what Ms. Anderson calls the Amazon Effect – high customer expectations requiring rapid deliveries, accessibility and flexible, customized service – is putting pressure on costs and inventory levels.

“It’s like the perfect storm, tariffs, last minute changes, rapid delivery requirements and increased customer demands are challenging the supply chain. In turn, inventory levels are increasing.  Add in elevated labor and logistics costs and it gets tougher and tougher to control costs,” Ms. Anderson explains.

The result is an increased focus on improving inventory turns to accelerate cash flow, as well as an emphasis on re-shoring and near-sourcing.

“Aligning sales forecasts with operational capabilities is critical for manufacturers to thrive. In our 14 years of consulting, sales, inventory and operations planning (SIOP) has consistently delivered the strongest increase in business value. Leveraging best practices in demand planning and better aligning sales forecasts with operational capabilities will drive significant improvements in customer performance and the bottom line,” she says.

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. As a result of her work with manufacturers and distributors and financial knowledge of factors affecting the bottom line, Ms. Anderson has been appointed by the Logistics Council of the Inland Empire Economic Partnership (IEEP) to lead the effort to develop a consortium for logistics, supply chain and advanced manufacturing success.

“Inland Southern California leads California in job creation and manufacturing growth. We are in an ideal situation to become a global leader in logistics, advanced manufacturing and export excellence. I’m very excited to be spearheading the effort with the IEEP to create a Consortium of Excellence to support the future of the industry and accelerate regional growth,” she says.

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 has been named a Top 40 B2B Tech Influencer by arketi group, a 50 ERP Influencer by Washington-Frank, ranked in the 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, an inspiring collection of 101 strategies for creating bold customer promises and profits. A regular content contributor on topics including providing 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   
                                                         

 



Blockchain Service Has Gone Mainstream

June 11th, 2019

 

Although according to most experts, blockchain hasn’t lived up to its promise yet especially in comparison with IoT, robotics and more, it has just gone mainstream. Of course, who else but Amazon has just made blockchain service platform generally available. Undoubtedly, that will disrupt many of the techies running around to be the first at blockchain! With that said, big names such as IBM have poured a lot of resources into blockchain, so it is likely to go somewhere. For example, IBM and Syniverse just completed a pilot program for roaming solutions using blockchain technology.  And, IBM has interesting projects going with Nestle, Volkswagen, and Albertsons (the world’s 2nd largest grocery chain).

Have you thought about how blockchain might impact your industry?

What Should We Consider and/or What Impacts Could Arise?
There has been a lot of hoopla about blockchain for several years although progress has been slower than many other technologies. Regardless of how popular, it is important to understand key technologies that might impact your industry or your supply chain partners. Certainly, in blockchain’s case, it is relevant to industries where a chain-of-custody might be needed such as food. That is why two of the companies mentioned above relate to food, Nestle and Albertsons. Yet it doesn’t matter if you relate to food or another blockchain-related industry, it is quite likely your industry or your supply chain will be impacted in some way. For example, you might use the same supplier or transportation system.

The bottom line is to stay abreast of what might impact your industry, company, customers, suppliers and related geographies. Thinking ahead will enable you to take advantage of opportunities and successfully navigate around barriers. You’ll find more information on these types of topics on our resilient supply chain series.