Tag Archive: alignment

The Value of Alignment: Sales, Operations & Finance

May 30th, 2019

Alignment might sound like a fluffy concept, but it delivers bottom line results. Our most successful clients have achieved the most substantial results from alignment. Although SIOP (Sales, Inventory, Operations Planning) gets a wrap as a technical topic, in our experience, it is the alignment portion of SIOP that delivers the bacon!

For example, in one client project, the Sales Leader was concerned about service levels. He knew that service was the differentiator in the marketplace, and if they didn’t have quick lead times and responsive customer service, it would negatively impact his ability to grow the business. On the other hand, planning knew that sales tended to come in dramatic spikes which were hard to predict in advance and so strategic inventory could make sense. Operations wasn’t too keen on inventory since they had a lean mentality with the view that inventory was ‘bad’, and they were concerned about capacity and staffing. Accounting set rules on overhead rates as a percentage of sales on a monthly basis which caused HR and Operations to hire and fire temps continually (and sometimes full-time resources). Overtime wasn’t used as a rule of thumb and was seen as costly by management, In fact, it was the only client we’ve ever worked with that didn’t use at least some percentage of overtime on a continual basis. And, of course, R&D created new products and had no idea about the volume and the impact on capacity and staffing. In essence, no one was on the same page!

We created a demand plan based on historical forecasts with sales input, confirmed the capacity and staffing levels required to meet that forecast and determined that if we level loaded the forecast over a quarter, we could create a win-win: improved service during the sales spikes with improved margins (lower temp turnover, improved efficiencies etc.). But it didn’t matter if we didn’t align the team. That was the 80/20 to creating success (and is ALWAYS the hardest part). Fast-forward 3-6 months down-the-road: We shortened service dips from the sales spikes, increased the service levels and reduced costs.

These types of client results are commonplace with alignment no matter your position in the supply chain or the world. Have you considered whether your teams are saying they are aligned or whether they are truly using the same playbook? It often will make the difference between a happy customer and a disgruntled one (which isn’t something anyone wants in today’s on-line era), let alone the profit impacts. If you are interested in an alignment assessment, please contact us.

 

Did you like this article?  Continue reading on this topic:

The Strongest Link in Your Supply Chain

SIOP: How Collaboration & Judgement Can Achieve Wonders

What’s Ahead for Supply Chain?



Case in Point – Are You Starting the New Year with Clarity?

March 22nd, 2018

As consultants, when we first start talking with clients at least 80% lack crisp clarity.  Often, this alone is a large cause of their under-performance or limitation vs. full potential.  Thus, why not take quick stock of your clarity of direction for 2018 as we head into working day #1?

It can be quite simple.  Forget about all the buzz words such as lean manufacturing, predictive analytics, SIOP (sales, inventory & operations planning), artificial intelligence and the like.  Although you know we talk about some of these as powerful concepts, they are JUST tools. Instead, think about where you are going and what you need to accomplish in 2018.

Start with what should be relatively simple – where are you going?  Hopefully you’ve thought about strategy. Remember, strategy is no longer a topic to address every 2-5 years.  Successful leaders think of it as a strategic sprint that has to be re-evaluated (rapidly yet effectively) at least once a year.  Of course, this leads to topics such as understanding your market, customers, and business differentiators, and so start with these topics at a minimum.

Once you have clarity of where you are going, the hard part starts – turning your strategy into reality.  You cannot be the only person with clarity for the New Year if you want to be successful. Is your executive team on board?  Are they communicating in alignment as of the first day of the New Year? In today’s Amazon-impacted environment, unless your leadership team is in lock step with clarity of direction early on, you’ll be left in the dust.  After all, if customers expect delivery same-day and powerful customer experiences, they aren’t expecting to wait for you to get your act together after returning from vacation.

Take a quick audit of your strategic clarity, fill any gaps and look for opportunities to fast-track progress.  Let me know how it goes.



Your Supply Chain Shortlist for 2018

January 3rd, 2018

supply chain strategy

 

As we head into a New Year, it makes sense to take stock and think about your supply chain shortlist.  To get you started, we’ve developed a list of questions to ponder:

  1.  Do you consider your supply chain from the holistic point-of-view?  From cradle to grave or product inception to customer reception?  If not, you are selling your business short!
  2.  If you were to draw your supply chain for a new hire, would you start with your customer, your supplier or somewhere in the middle?   Why?  Do you inherently see that as your priority?  
  3.  Have you thought about the power of high-tech AND high-touch in your supply chain?  Unless you are considering progressive technologies to deliver superior products and services at higher levels of profit, you’re sure to be left in the dust!  On the other hand, if you aren’t collaborating with your supply chain partners, you won’t even be in the game to start.
  4.  Have you considered the power of alignment (of demand and supply AND all your departments) while simultaneously considering the power of deliberate debate and misalignment? Find a way to constructively achieve both to maximize business value.
  5.  Have you considered why Southern California is the new center of manufacturing excellence for supply chains across the globe? Stay tuned for my new book, The Coming Power of Manufacturing to hear more about it.