Tag Archive: decisions

The Resilient Supply Chain: Cross-Organizational Collaboration

January 4th, 2019

I’ve been coordinating a process involving several disparate players, ranging from multiple educational institutions who are not aligned with one another, government players (with many differing goals) and business partners (with a completely different set of needs).  Although there are others, these 3 core groups are more than enough!

Success will only come to those who find common ground with collaboration.  If collaboration was as easy as simple communication, everyone would do it. We would probably have a lot more happy customers and more profits to share with investors, employees and for reinvestment and giving back.

What should we think about if this is the outcome we wish to create?

  1.  Look for the win-win-win –  If someone wins and someone else loses, it isn’t a successful collaboration.  If you think hard enough, there is usually a way to turn a situation into more of a win-win-win with some shared give-and-take.
  2.  Think about positioning –  If your idea is presented in isolation, it has a much greater chance at failing than if it is presented in light of the bigger picture. Why is it important?  How can each person play a role? Does each person know how he/she fits in and provides value?
  3.  Value diversity – Each time I think “I don’t want to be on this person’s team because he/she is annoying or won’t add value”, I find that I am completely wrong (luckily these are just thoughts, not actions).  The best ideas come from the most unlikely places.  And, interesting suggestions that can lead to “big” ideas typically come from someone who is quite opposite and thinking about the situation from a different perspective.
  4.  Recognize progress of the team –  Who doesn’t want to be recognized with a pat on the back as progress is made?  The key to collaboration is not to say positive things about collaboration and then reward individual performance.  Instead, reward team progress, even if that progress is simply gaining an understanding of how much they do not agree with each other yet are willing to listen.  
  5.  Consensus isn’t needed – As much as collaboration can achieve dramatically better results than each superhero individual thinking on his/her own, consensus is overrated.  Set the expectations upfront of how collaboration works. Feedback and input is expected. Discussion and debate participation is mandatory. But consensus isn’t required for every decision.  Otherwise, you might get there eventually but your competition will be LONG gone. More importantly, determine how to collaborate and make decisions upfront.decisions

The importance of collaboration comes up more frequently than almost any other topic.  Since executives are collaborating with customers, suppliers, trusted advisors, other supply chain partners and even competitors, there is just no room for poor collaborators.  

If you’ll notice, many disruptors collaborate with strange partners. Perhaps this core skill is a key ingredient to success…. Or, think of it another way, how will anything get done without it?

 



E-Commerce Drives Industrial Space to New Heights

June 21st, 2018

Supply Chain Briefing

According to the Journal of Commerce, e-commerce is driving industrial space rents to new heights.  Our clients are definitely experiencing the same dilemma! There has been a 12.1% increase in rental rates since 2017, and the L.A. / Long Beach area has the lowest vacancy rate in the U.S. of 1.2%.  Ridiculously, the average price in L.A. was 60%+ higher than the U.S. average in the first quarter! And, stranger yet, e-commerce is driving class B space (not as desirable) to be snatched up. It is becoming the new class A!  Even Class C (even less desirable) is starting to sell like hotcakes.

Are you prepared for these Amazonian type disruptions?

 

What Should We Consider and/or What Impacts Could Arise?
First, are you thinking about the disruptors most likely to impact you?  For example, almost every manufacturer and distributor is certainly impacted by Amazon’s rapid delivery expectation.  Have you thought about what your customers expect from you? How about what is required to satisfy – or delight – them?  Undoubtedly, the bar has been raised.

Speed is a more apparent Amazon-related outcome.  Don’t stop there. In order to support rapid deliveries, what will be needed now?  Six months from now? A year from now? Currently, it has made proximity to the ports and customers of utmost importance.  What other impacts have arisen? In this case, e-commerce has changed our shipping and transportation expectations dramatically and permanently – we expect to receive only exactly what we need (whether 1 box or 1 piece) when we need it.  

This has created the need for e-commerce fulfillment operations.  Where would you prefer to locate your operation? Most likely as close to customers and your supply base as possible.  In this case, it means rates are going through the roof – if you can even get them. What can you do to proactively set up your supply chain to support these likely impacts?  And, are you building these estimates into your projections? How will you make effective decisions – can you bring your suppply chain into the process further?

Don’t delay any further….

 



What Should Manufacturers Be Thinking with Potential Tax Changes?

December 11th, 2017

There has certainly been a lot of conversation about the potential tax law changes!

 Michael Kouyoumdjian, managing shareholder of RP&B CPAs, did a great job of going through the potential changes and impacts to manufacturers and distributors in a discussion with trusted advisers who work with them everyday.  Of course the issue is that there is no way to know what will happen.  But, if we look at what is most likely to occur (that is part of the House and Senate bills), we can start thinking about down-the-line impacts.

 

 

Decreasing Tax Rates and Accelerating Expenses
The bottom line is that the tax rates for manufacturers and distributors will go down overall.  It has passed as a flat tax of 20% thus far.  However, it certainly has the potential to creep up.  It also appears that there will be an increase in the ability to expense asset purchases.  Of course, as one would expect, there are exceptions and offsets that will change this simplistic picture but these trends appear likely.  Are you thinking about what impacts these likely changes will have on your business?

What Should We Consider and/or What Impacts Could Arise?
As Michael said (and I completely concur), we should never run our businesses based on tax consequences. Instead, we should make good business decisions.  That doesn’t mean we shouldn’t be thinking about likely impacts so that we are ready to take advantage of opportunities and redeploy resources as makes sense to maximize growth and profitability.  As a general rule, it is likely businesses will increase their investments, so let’s start there.

Investing in Automation
Since there is also a BIG push on automation and robotics to maximize performance to increase profitability and locate manufacturing closer to the customer, it seems likely that one of the areas of investment will be in automation equipment.  Additionally, in order to maximize performance, we are seeing additional investment in systems and technologies to increase efficiencies, automate processes and collaborate with supply chain partners.  Thus, ERP, CRM, MRP, barcoding, artificial intelligence, IoT, and data analytics are likely to continue to surge in terms of interest and investment.  Also, if businesses can minimize the labor component and locate manufacturing closer to the customer, it wouldn’t be surprising if we saw an increase in re-shoring and U.S. manufacturing.  What will that do to your supply base, workforce etc.?

Have you begun planning for the impact of tax changes?