Tag Archive: demand

Manufacturing Expert, Lisa Anderson, Notes Workforce Talent and Suppliers are Critical to Stabilizing the Supply Chain

August 24th, 2020

CLAREMONT, CALIFORNIA – August 24, 2020 –  Manufacturing and Supply Chain Expert,  Lisa Anderson, MBA, CSCP, CLTD, president of LMA Consulting Group Inc., tells companies to recognize  workforce talents and take time to partner with the right suppliers. LMA Consulting Group works with manufacturers and distributors on strategy and end-to-end supply chain transformation to maximize the customer experience and enable profitable, scalable, dramatic business growth.

“Stabilizing the supply chain has been critical these last few months for manufacturers and distributors.  This has been necessary to minimize volatility and keep goods flowing, in turn, fulfilling customer expectations. Customers understand that these are different times, but they will be patient only so long.  That is why it is critical to get the supply chain stabilized,” Ms. Anderson explained.

In past communications, Ms. Anderson has suggested understanding demand by connecting with both the customer and the customers’ customers.  She has also discussed realigning demand with supply through the SIOP process (Sales, Inventory and Operations Planning). Yet, the most critical component in solving problems, disruptions or even expansion of the supply chain is a company’s talent. “I often ask our clients who in the organization, which disciplines and levels, is involved in the SIOP process and collaboration with customers and suppliers. If the answer is simply Supply Chain or Operations, they are missing out on solutions that their talent can bring to the table, and even more concerning is the potential loss of talent due to the lack of involvement in meaningful activities. I also ask about the depth of talent and cross-functional capabilities within a discipline. This is telling, especially when complex solutions are required to satisfy key customer requirements or resolve a situation within the supply chain.  And, one of my final questions lies in the determining the kinds of relationships the company has with suppliers.  Employees and suppliers can create new solutions or products and be champions of an organization,” she continued.

With high levels of ambiguity and volatility, the leader’s role is more important than ever. Ms. Anderson suggests three ways to immediately leverage talent to stabilize the supply chain. “Talent is key to stabilizing the supply chain. 1) Get your salespeople and your customers involved in the forecasting process. Sales tends to be on the outskirts of demand and supply. They need to be as involved and accountable in the demand planning and fulfillment phase as they are in generating orders. 2). To stabilize internal operations, fill gaps and keep teams focused on the customer while maximizing efficiency, formal and informal leaders must monitor progress, adjust plans and stay on top of morale, training and developmental needs. 3) Do not assume the past will repeat. Deep dive into critical supplier relationships and future viability. Make sure you have the right supplier partners, not simply the least costly vendors, and track progress frequently. And, make sure you do not have all of your eggs in one supplier basket” she concluded.

Ms. Anderson recently released a short video, What’s Happening in Manufacturing & Supply Chain: Consider Your Top Talent. Ms. Anderson has also released, Future-Proofing Manufacturing & the Supply Chain Post COVID-19, an eBook that provides practical go-forward insights, advice and experiential value.

 About LMA Consulting Group – Lisa Anderson, MBA, CSCP, CLTD

Lisa Anderson is the founder and president of LMA Consulting Group, Inc., a consulting firm that specializes in manufacturing strategy and end-to-end supply chain transformation.  She focuses on maximizing the customer experience and enabling profitable, scalable, dramatic business growth. Ms. Anderson is a recognized Supply Chain thought leader by SelectHub, named a Top 40 B2B Tech Influencer by arketi group, 50 ERP Influencer by Washington-Frank, a top 46 most influential in Supply Chain by SAP and named a top woman influencer by Solutions Review. She recently published, I’ve Been Thinking, 101 strategies for creating bold customer promises and profits. A regular content contributor on topics including a superior customer experience with SIOP, advancing innovation and making the supply chain resilient, Ms. Anderson is regularly interviewed and quoted by publications such as Industry Week, tED magazine and the Wall Street Journal.  For information, to sign up for her Profit Through PeopleTM Newsletter or for a copy of her book, visit LMA-ConsultingGroup.com.                                       

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Kathleen McEntee | Kathleen McEntee & Associates, Ltd. | p. (760) 262 – 4080 | KMcEntee@KMcEnteeAssoc.com



Why SIOP is Critical to Thriving During & Post COVID

August 12th, 2020

COVID-19 has disrupted every business. Some are growing far faster than supply can keep up, while others have dropped like a rocket. Still, others have almost identical dollar volume yet double the number of orders at half the order size, creating significant disruption in warehousing, shipping and transportation. And yet others might have less severe changes in volume with certain customers thriving and others dormant – all creating mix disruption.

The supply side is no different. Previously reliable suppliers can be suspect at best. Previously high-quality, low-cost suppliers have skyrocketing costs as airfreight is required to keep customers’ satisfied. Risks have increased dramatically with the uncertainty of cash flow and long-term ‘institutions’ of the industry are disappearing overnight. With this high level of disruption across both demand and supply, misalignment has run rampant, costs are increasing and customers are frustrated.

SIOP (Sales, Inventory Operations Planning) Cuts through the Disruption
You know the story. The busier we get, the less we have time for improvement yet we spend double or triple the time to achieve the same outcome because we can’t set aside the time required to start or maintain an improved process. I’ve been there and am familiar with the excuses! With that said, STOP and look around you. You are on a hamster wheel with no end in sight. Implementing SIOP, even if simplified to what is achievable under current conditions, cuts through the disruption to stabilize your supply chain.

What is SIOP?
Quite simply, SIOP is about finding a way within your environment to realign demand with supply. You have to start with demand or you will forever chase your tail. To simplify the best practices across industries (aerospace and defense, building and construction products, food and beverage, healthcare products), geographies, company sizes that apply to manufacturing, supply chain, logistics and service organizations with supplies, you should focus on these keys:

  1. Proactive management of demand: Talk with customers.  Find out about your customers’ customers and every customer type within your channel until you get to the end customer (consumer, business using your product, patient). Ask about and observe evolving customer needs. Review historical trends.  And, put a stake in the ground with a starting point forecast. Outcome: typically 12-18 month rolling forecast
  2. Proactive management of internal supply: Talk with your internal teams. Understand changing capacity and staffing levels (manufacturing, warehousing). Realign temporary and contract assistance.  Understand your resiliency to changing demand (overtime, increasing staffing, efficiency improvements, maintenance and engineering support, etc.). Realign with R&D/product development requirements and your support resources. Outcome: typically a capacity plan (production, storage), high-level staffing plan and key decision plan (make versus buy, product/customer transitions, machinery and equipment plans) for at least as long as your longest lead item – 12-18 months.
  3. Proactive management of supply partners: Talk with suppliers. Find out about your suppliers’ suppliers capabilities, their likelihood to meet schedules, ability to meet cash flow needs and risk of shutdown (whether temporary due to COVID-19 or another disruption or permanent (going out of business)). Outcome: typically a sourcing and supply plan by key suppliers/ commodities for at least as long as your longest lead item – 12-18 months.
  4. Proactive management of your logistics network partners: Talk with transportation partners, brokers, 3PL/ 4PL partners and understand the extended supply chain, potential risks, possible options as disruptions occur, etc. Outcome: typically a logistics network and goods movement plan for at least as long as your longest lead item – 12-18 months.
  5. Take stock of inventory: Do you have strategic stock of critical items? Items without a robust backup supplier? Items in countries of higher risk of shutdown? Are you so busy running in circles that your slow moving and obsolete is expiring under your nose? Outcome: typically an inventory investment plan for 12-18 months.

Pre-COVID-19, clients went through a SIOP cycle with a monthly cadence. The typical processes included:

  1. Demand review meeting
  2. Supply review meeting
  3. Alignment of demand and supply (not always requiring a meeting)
  4. Inventory review meeting (often incorporated into the supply meeting)
  5. Executive SIOP review meeting (in some cases, quarterly made sense)

During COVID-19, we have taken these same concepts and adjusted to changing conditions. No two clients are alike in what makes sense to rapidly realign demand and supply and maintain this alignment.  Yet, there is one item in common across the board:

A weekly alignment on just the critical customers, internal resources, suppliers, logistics network partners and review of inventory

Read more about SIOP and related concepts in our eBook, Future-Proofing Manufacturing & Supply Chain Post COVID-19. If you’d like a rapid assessment and recommendations for your situation, please contact us.

 

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What’s Going on in the Food Industry?

July 13th, 2020

After receiving a call from a CBS affiliate asking about what’s going on in the food industry, we thought it would make for an interesting deep dive. In addition, we have been working with companies from farm to table and from machinery equipment to logistics/food service distribution and grocery.  The coronavirus impacts have been vastly different. Whether you are related to food and beverage or not, you undoubtedly have some sort of connection or impact throughout your end-to-end supply chain. At a minimum, the concepts are the same, so take note.

Are you supporting grocery or hospitality?
The answer provides a night versus day response. Of course, grocery saw the largest increase in history early on during the coronavirus lockdown. People hoarded groceries, consumption increased (after all, virtually all consumption occurred at home), and manufacturers and distributors couldn’t keep up. Grocery sales saw an unprecedented uptick early on during COVID-19.  It has leveled out to be a slight increase. Due to a surge in coronavirus cases at meat packing plants, there was a lot of concern about a shortage of meat but it didn’t materialize in any substantial way.

On the other hand, companies that supply hospitality and restaurants saw a dramatic drop. One of my supply chain colleagues went to her local restaurant and brokered a deal for what she couldn’t find at the grocery store. Supply chains were completely out of whack. Channels weren’t agile, packaging was different and demand and supply were completely out of alignment! Clients and colleagues that served restaurants and the hospitality industry saw volumes go to 0 overnight. Let’s hope they had a diversified customer base. However, even if completely dependent on hospitality, the agile and proactive quickly turned left and found new opportunities.

Is Your Customer Base Diversified?
Customers with a diversified customer base have fared better than the rest. For example, our clients supported each of these types of customers:

  1. Grocery – Clearly, this segment was largely up
  2. Big box stores – Again, these stores at least kept operating. Volumes were down slightly but carried on.
  3. E-commerce – The one unanimous HOT SPOT across the board.
  4. Healthcare – Definitely down. No one was going to the doctor or saw medical professionals unless they had COVID-19
  5. Weight & body building – Again, down since no one was going to the gym.
  6. Starbucks & fast food – At first, these were down but they quickly recovered, depending on the product sold. For example, if it was a food product consumed in the store (not typically in the drive through), sales dropped.
  7. Restaurants & hospitality – DOWN, DOWN, DOWN

The Misalignment of Demand & Supply
By NO means could our clients assume their customers’ history would be a good indication of the future. In fact, in many cases, their customer supplied radically different customers.  So, it was really the customer’s customer that had to be understood. Getting in touch with our extended supply chain to better understand demand was a good start. Staying on top of changing and evolving needs was critical. Extending help to customers went a long way. The bottom line is to get on top of demand to the best degree feasible.

Of course, the supply base is experiencing the same level of unprecedented volatility. Thus, getting on top of supply is also essential. All-in-all, getting on top of demand and supply and continually re-aligning, readjusting, and addressing gaps (retooling, creating partnerships, repackaging and other innovations) minimized the level of supply chain shortages.

What is the Status of the Food Industry?
Supply chains are more local and somewhat resilient which helped clients adjust more quickly to the changing conditions. Also, several clients reduced the number of variations offered to better manage the process and/or to address a supply issue proactively. It seems to have been a successful approach. The bottom line is that there weren’t noteworthy shortages beyond the first few weeks of panic buying.

What Should We Do?
Smart and innovative clients are thinking ahead and taking the opportunity to evaluate..

  1. Customer preferences: Think about changing customer preferences and consumer buying behaviors to develop and/or adjust products and services to meet evolving customer needs and to fill gaps.
  2. Technology: Implement key technologies to better support improved operational efficiencies and a superior customer experience.
  3. Predictive Analytics: Design and build analytical models and dashboards to use understand how to better predict customer behavior and manage operational cost. Business intelligence, predictive analytics and artificial intelligence/ machine learning is offering great promise.

Interestingly, although this feedback was geared to food and beverage, the same types of situations were prevalent in other industries as well. In aerospace and defense, commercial aerospace took a nose dive while defense stayed constant. In building products, if your products supported at home improvement projects, demand was up whereas commercial real estate for retail is in sorry shape. In healthcare, if you are in PPE, you cannot keep up.  Whereas if you are in any field not directly related to coronavirus (such as elective surgery, cancer or a primary physician), you were twiddling your thumbs.

Who are your customers? Are you diversified? What risks exist? Evaluate your extended supply chain and future-proof your manufacturing operations and end-to-end supply chain. Check out our eBook and contact us if you’d like to brainstorm these concepts further.

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The Future of Manufacturing & Supply Chain

June 17th, 2020

It is a very exciting time for those of us passionate about manufacturing and supply chain. Undoubtedly, we have never worked harder proactively managing the unprecedented demand and supply volatility, and so appreciate your supply chain resources. I am hearing that they are taking off for better opportunities, and you won’t want to lose your best talent during what will be a lengthy and supply chain intensive COVID-19 recovery!

As manufacturing increasingly returns to the U.S., as consumers and businesses expect a superior, customized, rapid delivery of products and services, as technological advances become commonplace, as the general public sees the value of essential businesses and the diversity of manufacturing and supply chain, it will be a great ride! Are you shaping your future or waiting for it to happen to you? Join me in a webinar to hear more.

One Tip to Implement This Week:

Simply start thinking about the future of manufacturing and supply chain in your industry, your region, and as they relate to technological advances and innovation. Bring your team together to get them thinking about the future, new ideas, and how to proactively position your company for success. A LOT can be accomplished simply by refocusing attention to thinking proactively, creatively and with a focus on the future. Will there be opportunities to pick up new business, design new products and open new markets as firms want to bring manufacturing capability back to the U.S. and closer to customers? What do your customers need that they haven’t thought about yet that would help them be more successful?

 

 Listen to a panel discussion with manufacturing executives related to the electronics industry on the Future in Manufacturing panel to stimulate ideas and flip through my eBook, Future-Proofing Manufacturing & Supply Chain Post COVID-19 to gain new insights to get the ball rolling. We have also launched a rapid Future-Proofing Manufacturing & Supply Chain assessment if you’d like assistance in thinking through your particular situation. Contact us if you are interested. Stay safe and healthy.



Demand & Supply Are Out of Whack!

April 27th, 2020

Demand and supply are out of whack to say the least. Manufacturers that supply toilet paper, food, healthcare products and other essential goods are seeing a surge in demand whereas those that don’t are seeing demand plummet. China was under lock down previously (causing a delay in the pipeline), and they are now operating around 80-90%; however, now we are under lock down. Retail sales are non-existent, and so the warehouses are full of the wrong products. Thus, inventory and transportation assets are typically in the wrong place at the wrong time in the wrong quantity. Watch my webinar on just this topic to learn more…

What Should We Consider and/or What Impacts Could Arise? It will not be business as usual as you ramp back up. Be vigilant in staying on top of what is happening and how quickly you can turn the dial to ramp back up. If you go too fast, you could get your supply chain further out of whack and anger customers. On the other hand, if you ramp up too slowly, not only will you lose money but you will also see your competition speed by. Instead, be proactive prior to the end of the shutdown to start things in motion, pay close attention to what’s happening and adjust accordingly. Stay tuned for my eBook,  Future-Proofing Manufacturing & Supply Chain Post COVID-19 

Please share your stories, challenges, ideas and successes. Contact us and please join in our free webinar series and listen to our archives.