California Steel Industries and Whether Progress Follows Passion

November 10th, 2018

Recently, I went on a tour of California Steel Industries (CSI), the leading producer of steel in the western United States.  We walked through the steel mill and the pipe mill.  You’ll see a video of the steel manufacturing process below.

It is quite an interesting process.  However, as amazing as it is to see, what is even more impressive is the dedication and passion of the employees who took us on the tour.  What I thought was most impressive is how the team members enjoyed the culture.

 

 

CSI has never had a layoff although they have used their employees to not just fill temporary roles but also to perform all services during tough years.  This dedication shines through.  For example, the pipe mill supervisor had a lot of pride as he told us about his story and the fact that it is the newest pipe mill in the world yet it is housed in the oldest building at CSI.  Perhaps progress follows passion in CSI’s case….

One tip to implement this week:
Culture seems to be popping up at every turn lately (tours, Harvey Mudd executive roundtables, successful CEO feedback) as key to success.

Have you thought about your culture and the impact on your employees and progress?  For example, on a tour, would your employees talk to the process and leave it at that?  Or would they talk about how much they enjoy working there?  Perhaps we should all “take a tour” of our facilities and find out.

If culture is simply as my consulting mentor Alan Weiss defines it (that set of beliefs that govern behavior), it is quite simple.  The issue is that it isn’t easy to build.

How might we create that set of beliefs that govern behavior?  Perhaps we start by deciding what we are willing to stand up for – and not waver from when the “going gets tough”.

If your influencers start believing in your culture, it will spread.  The trick is the only way I’ve ever seen influencers believe is by gaining their trust and respect and showing them (not telling them) what your new culture supports.

Why not start by simply thinking about what beliefs you support currently (whether intentional or unintentional)?  Can you see the impact of these beliefs in your culture?  The first step to any progress is to fully understand where you are now.

 



Amazon, Uber, Netflix and More…..Disruption is Here to Stay!

November 7th, 2018

Although not an official theme, it was quite clear that disruption was the common theme at the Association for Supply Chain Management (ASCM/ APICS) Annual Conference.

From the keynote speaker, Marc Randolph, one of the founders of Netflix, to almost every executive and thought leader, disruption is top of mind.  Amazon has disrupted retail.  Netflix has disrupted television. Uber is disrupting the transportation industry.  Do you know what disruption is likely to impact your company – and career – next?

 

 

Certainly, Netflix is disrupting television and cable currently.  At its roots, it disrupted the video industry.  Blockbuster was a powerhouse when Netflix was getting started.  It was fascinating to hear that discussion!

Marc brought up an intriguing concept – how to disrupt yourself.  To give you the highlights, he discussed three items you need:
1) Tolerance for risk – You cannot wait for full information before you “move”.
2) An Idea – contrary to popular belief, it does not need to be big, new, complex or even good.
3) Confidence.

What Should We Consider and/or What Impacts Could Arise?
Marc’s advice is “right on”.  So, how might you go about it?  For our clients, manufacturing and supply chain organizations, disruption is commonplace.  The key question is how do you have any hope of getting ahead of this instead of being buried by the likes of Amazon and other disruptors?  The answer – create a resilient supply chain!

What IS The Supply Chain?
Let’s start by defining supply chain: your end-to-end supply chain, starting with your customers’ customers to your manufacturing and distribution operations to your suppliers’ suppliers and all connections in the middle such as transportation, systems, financials, processes, and most importantly, people.  This is quite the topic to create a resilient supply chain!

 

 

We find that the most successful executives start with their team.  I’ve yet to see happy customers with unhappy employees.  You better start there!

Each person in your business is integral to creating a resilient supply chain!  To learn more about creating a resilient team as well as the rest of your end-to-end supply chain, we are thrilled to introduce our new series, The Resilient Supply Chain: Navigating Disruption.  Achieving Peak Performance

We will be adding articles, videos, interviews/ Q&A with thought leaders and executives frequently so please save this link and join in on the discussion. We are always interested in feedback and requests.

 

 

 



My 5-City Cross-Country Trip & the Value of Collecting Good People

November 4th, 2018

 

When I was young, I had a doll collection of the nationalities of my family.  I no longer collect dolls, cats or mystery novels but I have upgraded to collecting “good people”.  Luckily, I have always appreciated “good people” and I’ve stayed in touch.

Over the years, I was amazed and thrilled how many benefits came from this way of looking at life and career.  Last week, I was on an 8-night, 5-stop, cross-country journey where I interacted with some of these “good people” and it made me think…..

 

 

 

 

 

 

 

 

 

 

I started in:
1) Arizona to see my Mom and family
2) Chicago for the Association for Supply Chain Management where I collaborated with
LMA Associates, clients, APICS Inland Empire global student case competition finalists from Harvey Mudd, a CSUSB professor and contingent of transportation-related business owners from China and met several new colleagues
3) New York to lead the
Society for Advancement of Consulting annual meeting with my business partner, Linda Popky
4) Atlanta to meet with Georgia Tech and
IEEP colleagues
5) Palm Springs to meet with Renaissance Executive Forums CEOs  

Although exhausted, it did make me think about this concept of “collecting good people”.  Do you collect good people?

One tip to implement this week:
FAR more important than collecting industry trends, company history, technical skills and anything else, GOOD PEOPLE are the most valuable.  You meet people in all walks of life from college to colleagues at a job to customers and suppliers you might interact with along the way to industry and trade groups you participate with and much more.  I’ve found that there are “good people” all along the way. Sometimes, it just takes recognizing them. As life changes, keep in touch. It is easier today than ever before with social media.

When I first started on Linked In, I found the daughter of my first boss from Coca-Cola in order to re-connect with my first boss as well as her daughter (as we worked together briefly near the end).  I am really glad I did as they are definitely in the “good people” category. Other “good people” have become LMA Associates. Others have become clients.  And, others have become trusted colleagues and so on.  

No matter what happens in the future, wouldn’t you rather keep in touch with the “good people” throughout your life? It certainly makes it richer!

 



The Resilient Supply Chain: Are You the Disrupted or the Disruptor?

November 1st, 2018

At the Association for Supply Chain Management’s (ASCM/APICS) International Conference, almost every presenter mentioned disruption.  It is prevalent in today’s Amazonian, technology-ridden environment.  

Similarly, after attending APICS, I flew to lead the annual meeting for the Society for the Advancement of Consulting. During the first lunch, my colleagues spent the entire time discussing disruption.  One (a former Apple executive) lives it daily and coaches executives on disruption.  Another is a leadership expert who sees the significance and is writing a book on disruptors.  Interesting!

In the interim, we have dealt with a few client challenges – guess what?  You got it. They relate to disruption! And last but not least, the next leg of my trip was entirely about disruption.  Technology has the potential to vastly impact manufacturing and distribution jobs, so it makes a lot of sense to find a proactive approach instead of playing the victim.  

According to a proactive CPA partner, artificial intelligence (AI) is going to transform the industry.  According to a healthcare expert, it has vast potential to disrupt the healthcare industry. Gartner thinks 33% of all occupations will be performed by smart robots by 2025.  Forrester Research says AI will take over up to 16% of jobs in the U.S. And, if that wasn’t shocking enough, Google thinks                                                                     robots will achieve human intelligence levels by 2029.  

So, do you want to be the disrupted or the disruptor? We choose disruptor!

Since I had lunch with two disruption experts, I asked the critical question:  Can we learn to become a disruptor? The great news is that it is possible! Start paying attention to disruptors.  What do they do differently? What would you like to emulate? You don’t have to do exactly what they do. Find your own path but look for commonalities.  One of our colleagues is writing a book on this exact subject. When it comes out, we’ll pass it along.

In the interim, start asking a few questions….

 



The Resilient Supply Chain: Does Supplier Negotiation Work?

October 29th, 2018

In today’s Amazonian environment, it is quite clear that the customer’s experience is #1.  It doesn’t matter what issues you have.  If you cannot make sure that your product or service is delivered on-time with a value-add at a reasonable price, you will lose the business.  

The Squeeze
In talking with a group of aerospace CEOs who are being squeezed between the Tier 1/2 suppliers (those who supply Boeing and Airbus with plane ready parts) and their suppliers who are metals suppliers (mills/metals service centers) and outside processors, it is a tough position to hold!  However, just as Mirna Elnar, CEO of Acrua Spas said in our supply chain resiliency video series, there is always a solution when you think innovation.

The Win-Win
In this example, many of the suggested solutions from executives and procurement resources alike were to find opportunities to redesign/improve the product and process to achieve a “win” for the Tier 1/2 suppliers (improved manufacturability with better efficiencies and/or less scrap, less materials while maintaining specs/ performance, having the “right” inventory in the “right” place at the “right” time etc.) while also achieving a “win” for the CEO (better margins/ better cash flow) and ideally a “win” for their suppliers (more predictable demand, etc.).  A win-win-win is achievable if you look hard enough.

A Dose of Reality
This relates to a situation I found myself in while VP of Operations & Supply Chain for a mid-market manufacturer.  We found private-equity backers and were able to make cash flow by the “skin of our teeth”. We even were able to convince suppliers to take a haircut.  So far, so good. Then, oil and gas prices rose which impacted 70% of our material cost which impacted 70% of overall cost. NOT good. Also, we found that our product lines were all mixed up (which ones cost less to produce vs. the sales price for various customer segments) because we had recently merged three companies into one.  Also NOT good.

Our customers were a bit angry about service issues that arose when we cut over to a new system and merged the three businesses into one.  Also NOT good. And the largest segment of the business hadn’t updated products in years because they planned to sell and were desperate need of an upgrade to grow sales.  A fact but also NOT good. Lastly, our product is light but fluffy (which makes it larger in size) which carries a high transportation cost. NOT good either. But we had good suppliers and an innovative and committed team.  GOOD! So, how did we turn this into a “win-win-win”?

We decided to kick off a redesign project to find a way to straighten out the product tiers, improve performance of the product, reduce the cost of the product and reduce the freight cost associated with the product to boot.  A bit of a tall order? Yes, but a challenge as well!

We were successful in achieving ALL of these objectives by turning supplier negotiation on its head.  Instead of demanding price concessions, we partnered, provided upfront information on our objectives (including cost reduction objectives), collaborated on the design of new/improved materials, redesigned products and packaging, collaborated with customers to make sure we aligned with their needs and priorities, collaborated with equipment suppliers to put it all together and turned supplier negotiation into customer collaboration. 

The Result? We achieved a win for our customers, our business (and therefore our private-equity backers) as well as our suppliers.  There are too many people to thank but a quick shout out to Bill Weber, Keith White and Rick Finlayson seems appropriate.

Are you stuck in thinking about cost concessions or are you looking for the “win-win-win”?