Tag Archive: business

Supply Chain Heroes: How CFOs Can Help Save the World

March 25th, 2020

As Published in: Oracle/Modern Finance

Early this year, the largest asset-management company in the world made a bold announcement: It would start redirecting investments away from fossil fuels because of climate change. In his annual letter to CEOs, BlackRock CEO Larry Fink stated that “climate risk is investment risk,” and that risk is driving a fundamental reshaping of finance.

“Because capital markets pull future risk forward, we will see changes in capital allocation more quickly than we see changes to the climate itself,” he wrote. “In the near future—and sooner than most anticipate—there will be a significant reallocation of capital.”

For manufacturers, retailers, and others that move business or consumer goods, a reallocation of capital will require tighter alignment between the CFO and supply chain leaders. This is already happening among the leading-edge CFOs I meet because they recognize the end-to-end supply chain is driving customer experience, profit performance, and working-capital improvements.

As more companies start reshaping strategy in response to climate change risk, this CFO/supply chain alignment will become more critical to achieving business and environmental goals. In fact, CFOs could find themselves being the heroes of the next decade’s climate-change success stories.

Assessing the payoff for climate change initiatives

CFOs will need to be front-and-center to assess climate change initiatives related to packaging, material handling, transportation, and logistics because changes in these areas tend to have widespread impact.

For example, consumer packaged goods (CPG) companies are feeling the most pressure from climate change activism right now. Packaging is a big target for waste reduction but switching container sizes or materials can have direct and indirect cost implications. There’s a change in direct costs for replacement packaging, but material handling and transportation costs also could shift because of weight, storage, handling requirements, and other relevant factors.

Another example is investment in technology systems. For instance, buying products that are sustainably sourced and handled is important to a lot of consumers, and trust is essential for companies that want to differentiate themselves on this point. New blockchain applications are enabling this verification down to a granular level. While an ideal investment from a marketing point of view, what will the impact be on logistics? Will shipments slow down or speed up? How will the change affect fulfillment and customer satisfaction?

Cloud applications and other advanced technologies have made it easier to conduct real-time analysis and identify upstream and downstream impacts from business decisions like these. Such decisions will require collaboration and ongoing discussions between finance and supply chain leaders to meet all business requirements successfully.

Supply chain health and environmental health are linked

Even if a company isn’t a leader in climate change-reduction efforts, improving supply chain performance will naturally make operations more environmentally sustainable. I’ve seen this over and over again in my decades of working in supply chain management.

Supply chain services and assets are expensive and don’t usually generate cash, so they’re a frequent target of cost reduction. The outcomes of these cost-reduction efforts reduce environmental impact because fewer miles are traveled, inventory replenishes more often and doesn’t become obsolete, and there’s less material waste in damaged goods and over-packaging.

This might be an obvious example, but when you think about on-the-horizon innovations, such as biofuels made from landfill waste and autonomous vehicle and aircraft deliveries, you can see how supply chains could become proactive enablers of reducing climate impact.

Another reason for CFOs to focus on supply chain when developing an impact-reduction strategy is it could help recruit supply chain talent. We’re experiencing a shortage of supply chain professionals across manufacturing, retail, logistics, and a range of other companies. Having a solid stake in climate change-reduction efforts could help attract limited talent, especially Millennials. A recent survey found that 75 percent of Millennials said they would be willing to take a pay cut to work for a company that is environmentally responsible. And nearly 40 percent said they have chosen one company over another in the past because their choice had a better environmental record.

Millennials will comprise three-quarters of the workforce within six years—so statistically, companies with stellar environmental practices will be a top position to recruit talent.

Finance and supply chain: Teaming up for sustainable operations

First and foremost, CFOs want to be good stewards of business assets. For many companies, the supply chain is central to value creation. So, it’s not surprising that CFOs at these companies are paying closer attention to their supply chains from a cost point of view.

Now, climate change is raising risk in ways that require a rethinking of how to grow and protect those assets. As markets begin to respond and shift, supply chain leaders and CFOs will find themselves facing the challenge together.



Coronavirus: Resources for Businesses & Individuals

March 20th, 2020

What else could we be thinking about this week?!?!

Of course, the coronavirus is top of mind. I met with a group of top notch trusted advisors yesterday (via Zoom) and we shared resources. We had trusted advisors including CPAs, attorneys, HR consultants, bankers, insurance providers and many more. Because it was so valuable for each of us, I wanted to share these resources with you. Click here

We will continue to add links with valuable information in each section. For example, there are articles on FAQs for employers, working remotely, how to keep your sales team motivated and several more. We will continue to add articles as well.

Now that the basics are covered, I’ll also be adding manufacturing and supply chain specific articles and videos. Stay tuned here.

One Tip to Implement This Week:
Although the news is quite unsettling, the key is to follow the guidelines for social distancing, be extra careful but do NOT stop.

Some of our clients cannot keep up with the volume (for example, food processors/manufacturing).  Some have seen a quick slow down (for example, those supporting schools).  Others are concerned with the 90-120 day likely slooooow down from China (The latest reports show that China is back up to around 50%; yet, it depends on your unique situation as some are 70-80% and others much worse) and some are seeing a mixed bag.

No matter your situation, there are strategies you could use to move forward successfully. Spring into action!

Of primary focus is to get in touch with your supply chain. Talk with customers and suppliers. Don’t just stop there. Find out about your customers’ customers and your suppliers’ suppliers. Understand your landscape and put action plans in place. There was never a better time to extend a helping hand into your supply chain. We’ll talk about many more actions in a special series to be launched in the next few days but start here.

Last but not least, it is a stressful time for many and please try to remember with each interaction!



Do You Have a Network?

January 17th, 2020

 

Do you have a network of people you can go to for answers, help, introductions, and more? My network is not only very important to my business but it is also very important for my personal life. Starting with business, I can definitely say that LMA Consulting’s success is 100% due to my network, meaning my colleagues (former employers, groups, etc.), clients, family and friends.  If you aren’t paying attention to people, you might as well hang up your hat!

With that said, you MUST be genuine. I’ve seen people who seem to be connecting strictly for business or to “sell” something. They never do well over the long term. On the other hand, if you are well-respected and genuine, people will go the extra mile for you (just as you will for them). One of my best decisions early on in my career is that I “kept track of good people”. It is probably the best decision I made in building my business and creating an enjoyable career.

I’ve always believed it is key to both professional and personal success, but lately it has certainly proven true! A family member had a stroke, and several people in my network helped find the best care, navigate medical processes, and much more. A close friend needed help in navigating an unpleasant work situation, and several folks provided assistance and resources. A colleague got my aunt connected with the best breast cancer doctors in Boston (and had to go to her ex-husband to do it!), a few colleagues connected me with resources to resolve house issues, several colleagues have provided resources, referrals and information for family and friends related to finance, taxes, internships, jobs and more. I totally appreciate my network. Thanks to you all for being there!

One Tip to Implement This Week:
Why not take stock of your network? Don’t worry so much about who you can go to for issues. Instead, think about what you can do to provide value to the people in your network. Show them that you appreciate them. Why not start there? It is far more interesting to provide value than it is to receive value – although I am very grateful you exist when the need arises.

When I first started with a group of trusted advisors (ProVisors), I wondered how I would ever be able to help some of the professionals that didn’t relate to my focus in manufacturing and distribution/logistics. Over time, I realized that there are countless ways to provide value to people. Simply introducing connections where you think they might be able to provide value to one another is a great start. Why not think about one person and find a way to provide value. Start today!



Sequoia and the Power of Silence

August 8th, 2019

My best friend from high school and college was in town recently and we went to Sequoia National Park. First, I must say, what a ride to get to Sequoia on winding, mountainous roads! Once we arrived, we went to the ‘Trail of 100 Giants’, and it was impressive! These Sequoias were over 1500 years old, and gigantic. The largest tree has a diameter of 20 feet and is over 220 feet high.

Yet what stood out was the power of silence. You could hear the rustle of the wind in the trees. It sounded similar to sitting by the ocean. It certainly was a calming and humbling experience as the silence and the sounds of nature overpowered everything else.

Have you ever thought about the power of silence? Do you find it to be more effective than 1000 words? In a business setting, silence can speak volumes…

One tip to implement this week:
We all hear the advice to stop and listen.  Yet, how often are we thinking about silence? The most powerful speakers know the power of silence. The dramatic pause will emphasize just the right words. Certainly the best actors use this technique expertly, and we are putty in their hands!

Or have you thought about how not answering immediately answers the question? For example, at one client, I admit that after a particularly grumpy executive who didn’t want to support our project told me that he didn’t think consultants were valuable and didn’t want to talk to me to answer my questions, I was silent because I was thinking about how to respond that would be productive. Sometimes, it is better to be lucky than brilliant! In this case, since I didn’t respond quickly, he ended up filling the proverbial silence (since we weren’t communicating in person) and came back to me and agreed to do exactly what he just said he wouldn’t do. A light bulb went off that there is power in silence!

Silence is extremely valuable in negotiations. Have you noticed that whoever is silent gains the upper hand? That’s because we are typically uncomfortable with silence and rush to fill the gap. Next thing we know, we’ve given away more power and information than we intended, and we are behind in the negotiation. Yet I have to say, silence used as a manipulative strategy will not achieve your intended result. People will pick up on whether you are genuine or not.

Consider silence instead of a long response the next time you are going to open your mouth in a high stakes communication. Let me know how it turns out.



Dana Point and the Customers’ 1st Experience with Your Product or Service

August 2nd, 2019

Last week, I went to Dana Point for a good friend’s daughter’s wedding. It seemed like an opportunity for a mini-getaway.  So, I spent the night at the Marriott (pictured). Not only does Dana Point appear majestic with the view of the water, the lawn in front of this hotel provides a great first impression.

Your customers’ first impression can be very important. It gives them a “feeling” about your product or service. As my consulting mentor says, “Logic makes people think. Emotion makes them act.” In this case, it gave a calming and majestic feeling. Great for the end of a busy week!

What is the first impression of your product or service? Does it appear to be high quality? Or is your service welcoming and customer friendly? Mainly, is it what you would like it to be?

One tip to implement this week:
Start by taking a step back to think about your first impression. What would a customer experience? One idea is to ‘shop your business’. If you have a product, go to shipping to see what your next customer will receive as a first shipment.  Also, check on the carrier or truck to understand the delivery experience. Perhaps order your product for a family member (so your team doesn’t know it is for you), and see how it arrives. If your provide a service, call a customer upon your team’s first interaction.  Or go to the point of service and observe or test your service. Test your perceptions.

Once you gain an understanding of your first impression, consider ways to improve upon this first impression. Don’t just think about what you would want. Put your mind into your target customer’s experience.  What value could you add (that doesn’t have to cost anything) that they would appreciate and value? The clients that do this the best have a completely different relationship with their customers. It is worth pursuing if you’d like to increase your customer value and your bottom line!