Tag Archive: business growth

The Million Dollar Project Manager

May 31st, 2017
million dollar project leader

Project managers drive initiative results yet they aren’t often treated with the respect nor given the support they need to thrive.

In our experience working with manufacturers and distributors from small, family-owned businesses to medium-sized, private equity backed companies to global large, complex organizations, projects account for 80% of the improvement. There are projects to improve efficiencies, reduce inventory, grow sales, expand into new regions, consolidate operations and the list goes on. Thus, if we must rely on projects for business growth and profitability, should we think about our project managers as million-dollar project managers?

Most likely the answer is yes. However, in our experience, project managers are not often treated with much respect. Oftentimes, they are seen as lower level resources responsible for executing initiatives, coordinating resources and reporting progress up the chain. But, is this how we should treat our resources who can have such a far-reaching impact?

Let’s think about the reach of project managers’ impact. There are several key points to consider:

  1. Impact on resources:Undoubtedly, the number one concern from all levels of leadership relates back to resources. There are “too many,” “not enough,” “not the right skills,” “not allocated properly” and so on. Thus, anyone who has a significant impact on resources should be considered valuable.
  2. Daily decisions on which tasks gain priority:Similar to the impact on resources, determining the priority of tasks is crucial. As a project manager, there is a constant need to prioritize among tasks, collaborate with departments, etc.
  3. Ingrained in the business:Project managers are in the “thick of things” on a daily basis. In order to complete tasks and achieve results, project managers are involved in a wide array of activities. They are familiar with what is working and what isn’t working in each department as it relates to project tasks. There are very few projects which are confined to a singular department.
  4. Communicate across the organization:In order to complete their tasks, the project manager must communicate and collaborate across departments and layers of the organization. Since high-quality resources are hard to come by, it is vital to keep communications in a positive light.
  5. Impact on profit:Certainly, almost every project relates back to profitability in some respect. Whether we are growing the business, increasing margins, automating key processes or improving efficiencies, there is a direct impact on profit.

So, since it is clear that project managers have a substantial impact on business success, it is wise to think about how to maximize their performance. As a metaphor, the million-dollar project manager is appealing since there is often million-dollar impacts. Thus, what should we do to ensure project managers are treated more like million-dollar project managers?

  1. Provide clarity of the big picture:Project managers will be more invested in their projects if they understand the impact on the organization. Make sure to provide clarity of the big picture and how they fit in.
  2. Give them discretion:There have been countless studies as to what is most successful in keeping valuable employees (like your million-dollar project managers), and the net conclusion is that employees want some ability to affect the outcome of their work. We must give them some level of discretion to make decisions and guide their projects within reasonable parameters.
  3. Recognize small wins:Managing projects can be a slog into details with little to show for it. Find small wins to celebrate. Make a big deal of the importance and tie it back to the project manager and their team.
  4. Support their decisions:There is nothing more important than supporting your project managers. Of course, providing constructive feedback is essential; however, when in the heat of the battle, it is vital to support your project manager’s decisions. Without this support at critical junctures, the project will suffer, and the project manager will become dismayed.
  5. Promote the project:Promoting the project throughout the organization can do quite a lot for its chances of success. How do you get resources to want to join your project team? Start by being attractive. This oftentimes goes back to how compelling the project seems. Make it so! Do you think the best leaders’ projects for improving margins happen to be more enticing than the average leaders’ projects of the same type? No; perception becomes a reality.

Since projects will have a substantial effect on your customer loyalty and bottom line – the two most critical aspects of any business – it is worthwhile taking a few steps back to think about the project managers driving these results. If you think about their impact, a million dollars might not be sufficient. Therefore, start thinking about your project managers as though they have a million-dollar impact and results will follow.

 

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ERP Project Success: How to Be Part of The 20%

November 2nd, 2016
ERP Success

More and more clients are pursuing ERP implementation projects as executives realize they need better tools to support business objectives – growth, service, margins, cash and the like.

When implemented well, ERP systems can support substantial business growth without the additional investment in resources. Certainly, as the minimum wage goes up and workers’ compensation and healthcare are such significant issues, it is something many executives are thinking about! However, ERP systems can do much more – they can help collaborate with customers and suppliers. Those with the best-extended supply chains will thrive in the end, and so it makes sense to take a look at upgrading ERP.

Thus, finding a way to successfully implement an ERP system is of paramount importance, yet the statistics dictate less than stellar performance. Typically, 80%+ of ERP system implementations fail to achieve the expected results. As experts in this space, we can attest that several of these are due to unrealistic expectations without the associated resources and efforts to ensure success; however, either way, ERP success can prove elusive.

Therefore, understanding how to give you a leg up with strategies for success can be vital. Ignore all the best practice mumbo-jumbo and focus on what will really matter:

1. It’s all about the people: As with almost every business success, ERP success is no different. It goes back to the leader – and the team. Have you assigned whoever is available to lead the project team? Or have you put thought into it? Have you freed him/her up from their regular activities or made sure he/she can dedicate the time required? Are you saving your “A” players for growing the business and your day-to-day responsibilities instead of ERP? Sound odd? Well, we come across this on a daily basis in our consulting business. How about the software supplier’s project team? Why should you be worried about them? You shouldn’t unless you are interested in success.

For example, we’ve been involved in several ERP selection projects lately and have stayed involved to ensure the process designs would support business objectives in the best way possible, and, unfortunately, we can convey countless examples of the 80% that run into issues with people. For example, in one case, the project leader was on top of things – truly much better than the average project leader for the size company yet the project still struggled due to people issues. The software supplier ran into trouble with their project manager. You never know what can go wrong and so it’s smart to remember to keep your eye on the importance of people.

2. Focus on design: The reason we often stay involved with the design process is that this is one of the critical success factors to ensuring ERP implementation success. The quandary is that this type of role requires a broad and diverse skillset, rarely found in project managers.

The skills required include a broad, cross-functional process expertise, an understanding of database design, an understanding of down-the-line impacts of typical system transactions, an understanding of report writing/ programming and the ability to communicate effectively and bridge the gap between the technical and application resources. In our experience, we run across this type of resource 5% of the time in our clients. On the other hand, we run across this type of skillset perhaps 30% of the time with the ERP resources; however, the really bad news is that even though the capability exists 30% of the time, it is used perhaps 10% of the time. The ERP supplier does not want to dictate the design as it will be “their solution” instead of the “client’s solution”, and it is a trick to communicate effectively enough such that the client believes it is their idea or is accepting of the information.

Is it any wonder ERP projects fail miserably?

3. Focus on what could go wrong: It is often rather difficult to keep the ERP project team positive and moving forward because they are causing disruption to the day-to-day success of the business and pushing the envelope with new ideas (sometimes perceived to be threatening or ill-conceived) and process changes which might or might not be accompanied by organizational changes (another key issue with ERP success). Thus, no one wants to create more havoc by deliberately creating tension, thus, forcing practice when mistakes are made and transactions go awry is overlooked. However, this is exactly what must occur to ensure success. Deliberately try to screw up the system when testing. It is not to be a “naysayer” (which can sometimes be the perception) but it is to make sure the team knows how to back out of bad situations. It is far better to “break” the system in test than with your #1 customer!

We cannot tell you how much nonsense we’ve heard about “system XYZ” is set up to perform best practices and so the team just doesn’t want to deal with change. In 95% of the situations, this statement isn’t true. Instead, forget about all the hoopla about best practices and focus on these 3 keys to success; results will follow.

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M&A is on the Rise

July 28th, 2016

supply chain

A few weeks ago, I attended a ProVisors ODAM (Ontario-region based distributors and manufacturers group ­— don’t you love the name?!) session on the current state of the M&A market in Southern California — and specifically in the Inland Empire for manufacturers and distributors. The bottom line is that it remains a good time for M&A.

However, what I see frequently is business owners who think about M&A “too late” — if you want to sell for top dollar, you must start strategizing YEARS in advance. It can make a significant difference to the multiple of EBITDA (earnings before interest, taxes and depreciation) or revenue earned. For example, in the first quarter of 2016, the low multiple for EBITDA was 9.6 and the high end was 11.0. If you have even just a few million in EBITDA, this difference is interesting. And, this doesn’t get into the fact that if you have the right advisors and are proactively thinking about these concepts, you can significantly raise the multiple over the top end. There are countless examples.

Even if you don’t plan to sell, shouldn’t you be interested in increasing the value of your business for an ESOP (employee stock ownership plan), to recognize your top talent and to reinvest in business growth? There is something to be said for acting as though you will sell no matter your plans. When I was VP of Operations, we went through a preparation for sale process, and it was invaluable in understanding the business and profit drivers — something we should have dug into regardless of any potential sale!

One tip to implement this week:

So, I bet you are wondering what could possibly be done with M&A in a week. You wouldn’t be alone; however, you have to start sometime.  Why not this week?  If you are a business owner or executive of a privately held company, think about your long-term plans — what do you want to do with the business eventually?  Or what can you do to help realize these plans? I’m sure there are countless activities. Pick one that you think is particularly important and start there. Gather your team and talk about it.

If you are in a public company, the key is to think about stock value. Almost all of the same initiatives are important to increasing the value of your stock. Pick one and start.

If you are not in a leadership position, don’t despair. Do you know what the plans are within your organization? If not, find out. Ask questions. Find out how you can contribute. If you are in the loop, find a way that you can contribute to increasing the value of the company and start doing it. Run it by your manager if you need resources and to keep him/her in the loop. But, who is going to stop you from increasing value? To increase value, you have to provide better service, discover new markets, increase profitability, find ways to automate, etc. Aren’t they all “no-brainers”?

Looking for more ideas to keep your supply chain connected? Access more tips and resources on my blog. And keep connected by subscribing to my newsletter and email feed of “I’ve Been Thinking…”



Involve Your Supply Chain for SIOP Success

May 18th, 2016
Involve your supply chain for SIOP success

For greater success with your SIOP process reach out to your extended supply chain for collaborative ordering, product development opportunities, and logistics improvements.

The best SIOP (Sales, Inventory & Operations Planning) processes that deliver significant returns on investment involve the extended supply chain. Since SIOP is about how to align demand with supply – and align all the process owners and executives on one page, it has far reaching implications beyond any one project, person or result.

I find the most successful SIOP processes deliver the optimal combination of:

  • Business growth backed by operational readiness
  • Improved customer service levels
  • Accelerated cash flow
  • Increased margins

Thus, it is a worth-while endeavor for any business as not only a way to stay competitive but it is also a strategic process to grow the business and rise above your competitors with elevated business performance.

Although a certain level of success can be achieved within the “walls” of your company, far greater success will be achieved by involving your supply chain. Talk with your customers about demand. Consider collaborative ordering processes with them as you’ll gain a greater insight into your supply chain that can be utilized to achieve a win-win!  Find out which products are strategic and think through pricing and costing. Partner with suppliers to develop improved materials, to design products, to collaborate on inventory and ordering and more.  Go beyond the norm and tie your customers and suppliers together in a win-win-win endeavor. And, consider other supply chain and business partners – transportation providers, trusted advisors and the like.  Find a way to make 1+1=16.

If you’d like to learn more about how to implement these types of advanced SIOP techniques in your organization, our proprietary model, 4 EXCEL has proven effective.  Contact me to discuss further.

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Customer Collaboration on Orders = RESULTS

 

 



Is Your Supply Chain Ready for Growth?

August 11th, 2015
growth readiness

When faced with double digit growth, many businesses are stunted because they haven’t prepared their supply chain for growth.

Several of my clients are in the aerospace industry. In that industry, supply chain readiness audits are commonplace. These are especially prevalent today as growth in that market is substantial. Companies must be prepared for significant growth to support the doubling of the world’s fleet in the next 20 years to give their customers comfort in their long-term viability.

Although this is especially prevalent in aerospace, I’m finding double digit growth widespread in the marketplace today. Manufacturing is making a comeback. How ready is your supply chain? There are several aspects that should be reviewed to make sure growth will be seamless. A few of the top ones include: 1) Capacity readiness. 2) Staffing readiness. 3) Supplier readiness. 4) Financial readiness. 5) Process readiness. 6) Systems readiness. 7) Network readiness.

1. Capacity readiness: What is your projected demand? Turn that demand into machine hours. Do you have enough machine capacity to support it? Make sure you look out into the future long enough to cover growth with plenty of time to research, order, install and ramp up your machine(s) successfully.

2. Staffing readiness: Similar to capacity readiness, it is also imperative to review staffing. What does your demand plan say when converted into people needed? How many do you need to hire? What support positions are required? Do you need to fill gaps with temps or contractors? What skills are needed? This will also lead to cross-training and skills development. Neither can be accomplished overnight; however if you start months and years in advance, you’ll be successful.

3. Supplier readiness: Once you know what you’ll need to produce and outsource, you’ll know what supplier support will be needed. Are your suppliers ready to grow at the rate required? Do they even know about your growth expectations? Will you need additional suppliers? Will you need to partner with your supplier to create new materials/ products?

4. Financial readiness: Growth requires cash. It seems like such a great problem to have; however, growth causes far more complications than contractions. Although unpleasant, it is easy to figure out how to cut back yet it is not so easy to be prepared for growth. Have you figured out what your capacity, staffing, supplier support and other infrastructure requirements will be? Do you have the cash to support the ramp up? You will have to pay before you get paid. Cash flow planning is essential.

5. Process readiness: Doing more of what you’ve been doing is rarely sufficient. Instead, consider process improvements. Will lean principles improve your ability to grow quicker? Will SIOP (sales, inventory, and operations planning) support your growth? Are your foundational processes sufficient to support double digit growth? Are there opportunities to be more efficient and/or create customer loyalty? How about customer collaboration programs?

6. Systems readiness: One of the best ways to support growth without adding significant overhead is to leverage systems. Most companies use 20% of their ERP systems at most; consider how to increase that percentage in the “right” functionality to support your business. Is there additional technology that could provide a massive return on investment and support your growth? Keep updated on technology trends and pick those that will fit with your strategy and help deliver results.

7. Network readiness: Remember to think about your entire supply chain network. Are you producing the right products in the right facilities at the right time? Is there an opportunity to re-balance and improve your ability to grow profitably? Where are your customers and suppliers in relation to your facilities? What types of transportation and distribution nodes do you utilize? What lead time should your network support? There are many considerations to think about when evaluating your network.

Although evaluating your supply chain readiness is paramount to support growth, there is no reason to wait for your customers to request an audit. Integrate supply chain readiness into your yearly strategy review process. This way you’ll be in front of your customers and ready for unexpected opportunities. Imagine the possibilities to grow quicker and larger!  

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