Tag Archive: distribution

Warehousing Thoughts

March 11th, 2014
Warehousing is one of teh strongest links in the supply chain.

Warehousing is often overlooked for its simplicity, but it’s one of the strongest links in your supply chain.

By Lisa Anderson

Warehousing is an often overlooked area of the business.  We store and ship. How hard can it be? Well, there are plenty of ways to dramatically improve your warehousing service and efficiency.

1. The fundamentals – Every manufacturer has to do something in terms of warehousing and distribution, even if they cross-dock everything. One of the most overlooked keys to success is to look at the fundamentals.

2. Inventory record accuracy – Although a fundamental, I thought it deserved its own item due to the critical importance. It doesn’t matter how efficient your warehouse is IF you cannot find what you need when you need it.

3. Flow – Although you can go down the Toyota Production System or Lean path in terms of flow, if that sounds Greek to you, don’t despair. I’ve found flow to be uncommon common sense. Take a step back and observe how your product moves through the building. How does it flow? Does it make sense? Do you happen to drive in circles? Sounds silly but frequently occurs.

4. WMS light – One of my colleagues introduced me to this term, and I love it. In essence, whether or not you need a fancy software solution down-the-line to optimize your warehouse, there’s no reason to jump from crawling to running the marathon in a day. Which WMS (warehouse management system) tools can be of benefit to drive results? How do you make progress in that direction without having to jump full in to a complex WMS system? WMS light – focus on what makes sense with tools that support it.

5. Mixed mode – In today’s environment, you must understand your business. Is it pick and ship? Do you ship 1 piece at a time or in bulk? Do you support retail, distribution, etc.? In today’s world you might need to do 2 or 3 completely different processes. You must set your warehouse up to support each of them – and it’s unlikely to be the same setup for each.

 

 

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Manufacturing Management Success: Managing in 2014’s Complex World

March 6th, 2014
complexity in manufacturing

Complexity abounds in manufacturing management; can you rise to the challenge?

Complexity abounds!  Supply chains are extended. Risks must be mitigated. Rules and regulations are increasing. Talent is in short supply.  95% of business is outside the U.S. yet expanding internationally brings challenges and complexity. Customers are demanding more for less – with quicker turnaround times than ever before. We live in an information overloaded society and must be able to pull together the “right” information at the “right” time to make informed decisions. Thus, manufacturing management must rise to the challenge.

In manufacturing, I’ve found few “quick fixes”. Success almost always boils down to a day-to-day approach of combining continuous improvement with a touch of radical change from time to time. Unlike sales managers who might grab the elephant deal and be the “hero”, manufacturing managers must keep many balls in the air to navigate the daily grind while continually pushing for operational excellence and customer loyalty with exceptional customer service, just to remain in the game.  Thus, when you find the select few leaders who can successfully manage in today’s complex world, recruit them, retain them, and develop them.  A few of the keys to success to simplifying the complex to accelerate results include: 1) Lead by example.  2) Focus.  3) Metrics rule!

1. Lead by example: People are your #1 asset.  Look for folks who lead by example.  Begin with the company’s principles, vision and goals. Tie manufacturing’s goals to these. Communicate, communicate, and communicate. It is critical that people understand why the company’s vision is important (how the product or service helps humanity, customers, etc.) and how they fit into that big picture and add value to it.

Principles are not a “touchy feely” topic.  Only the best organizations communicate and live by core principles. Have you noticed that they become the successful ones? Culture is key. For example, is the company passionate about customer service? Integrity? Teamwork? Manufacturing management must lead by example. Do what you say you’ll do.  That alone can make you stand out in the crowd. In my experience, I’ve found that 80% of success begins with people.  Lead by example.

2. Focus: Focus alone can achieve wonders. Vast results follow. It sounds quite simple yet is rarely done. The day in the life of manufacturing management includes many conflicting priorities and fires to fight. Instead of jumping into the fray, it is essential to remain focused. Give me focus any day over expensive capital improvements. Undoubtedly, new levels of performance will be achieved.

For example, at one mid-market manufacturer, a team of operational experts succeeded in increasing production efficiencies by 20% through focus alone.At first, it seemed an impossible feat requiring many equipment upgrades, additional resources and complex analyses; however, after stepping back and creating a focused team, the results occurred within a three month timeframe with a focus on the basics – people and process.

3. Metrics Rule: The only way to win the race is if you know where you’re going and whether you are on track to get there. Again, simplify the complex. What 2 or 3 key metrics will tell you whether you are making progress? Ignore the rest.

Think about the key cost drivers for the facility. Is the majority of your product cost based on materials? Labor? Freight? How important is cash flow? Why would you spend countless hours measuring production efficiency to get an idea of your labor utilization if your #1 cost driver is freight?  You might think, “Who would do that?”. If smart people such as Board of Directors who have successfully run many companies can make this mistake so can you. It’s easy to get sidetracked with what is popular, talked about in the news, what was important at a similar company.

Instead do a deep dive on the key metrics which will have the largest impact on your business success. Discuss during a daily meeting. Make progress visible.  Identify roadblocks to improvement. Identify internal best practices. Set goals, track progress & celebrate small wins.

Manufacturing has become complex. Those who simplify and focus will thrive amidst the chaos.  As manufacturing continues to gain momentum, those who are ready for success will grow their business and will attract top talent. Will it be you?

 

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The Resurgence of Manufacturing- It’s Up to You!

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Lisa Anderson - The Manufacturing Connector



The Resurgence of Manufacturing – it’s up to you!

February 20th, 2014
Resurgence of manufacturing is occurring if we choose to take hold of it!

Resurgence of manufacturing is occurring if we choose to take hold of it!

As I recently attended the Manufacturing Summit in the Inland Empire and have been preparing for my Association of Operations Management Inland Empire Chapter’s 2nd Annual Executive Panel & Networking Symposium entitled “The Resurgence of Manufacturing & Logistics in Southern CA”, it’s become readily apparent that resurgence is occurring if we choose to take hold of it!

As most manufacturers suffered during the recession and haven’t seen robust growth since, it seemed appropriate to discuss what my best clients and contacts are doing to jump on board the resurgence. There are a few key strategies they have in common: 1) Focusing on the export market. 2) Investing smartly. 3) Leveraging relationships.

1. Focusing on the export market: Undoubtedly, the manufacturers and distributors growing most rapidly have export business. It’s not required to grow yet it certainly jump-starts dramatic growth. For example, according to one manufacturer with export business, the last two months have been 30% higher than last year. Not too shabby!

While listening to an export panel at the Manufacturing Summit, I learned that significant growth is not uncommon especially with Made in the U.S.A. products. This is especially true in industries regulated by the government such as by FDA. International consumers are quite interested in these types of products as they can “count” on the quality.

As the vast majority of the world’s population resides outside of the United States, it only makes sense to expand internationally. There are programs designed to support companies interested in exporting; thus, the opportunity exists if we are interested in taking advantage of it. Sure, there are additional complexities; however, you can avoid issues with a bit of common sense and research.

2. Investing smartly: Certainly during the recession, I had trouble finding companies interested in investing – in anything. No ERP system upgrades. No capital equipment. And in several cases no cash outlays even with huge returns (like 10:1 or 15:1 returns on investment). However, I’ve found studies from ALL past recessions inclusive of the Great Depression that has proven the opposite – in essence, those companies that invest during these times of crisis leapfrog their competition.

Of course, if you took advantage of the recession to make smart investments when your competition didn’t, you’re likely growing rapidly in comparison. However, if you haven’t, all is not lost. I find that although my typical clients have more cash, they are still a bit reluctant to spend it in today’s environment of volatility. In general, they are starting to put their toe in the water; thus, if you’d like to join the resurgence, jump into the water for solid opportunities!

3. Leverage relationships: It might be hard to understand how relationships can be a key to success yet it has proven time and again to be so! In today’s new normal business environment, it is not nearly as simple to grow sales and increase profitability as it was during the boom years and when supply chains were less complex.

In my experience, those companies that partner with suppliers and customers to elevate the entire supply chain not only perform far better than the rest but they also generate additional revenues by virtue of a relationship-orientation. People purchase from those they respect, like and trust. How can they do that if they don’t know you? Or if their only interaction is when you try to negotiate with a win-lose approach? Additionally, as supply chains are increasingly complex with elevated levels of risk, who will you likely support when issues arise?

It is an opportune time to join the manufacturing resurgence. The good news is that it requires working smarter; not harder. Why not put a plan in place, rally your team around it and give it 120 days? You’ll be glad you did.

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7 Hot ERP Systems Trends

January 13th, 2014
Stay on top of hot ERP system trends to stay ahead of the competition.

Stay on top of hot ERP system trends to stay ahead of the competition.

Those who make a concerted effort to identify and leverage emerging trends outperform their counterparts. As I want to make sure my clients are at the forefront of this path, I pay attention to emerging trends among my best clients.

Anytime I’ve seen a common thread among the best, it has signaled a noteworthy change.

I’ve noticed that although executives are not completely comfortable with the current new normal business environment (as who knows what taxes, health care impacts or other items will be thrown into the mix tomorrow), they are starting to think about investing in select projects again – ones with a substantial return on investment and/or required to support their long-term strategy.

Thus, ERP system upgrades and new implementations are on the rise. Therefore, why not get ahead of the curve and think about the hot ERP trends. The top ones that pop to mind include: 1) The Amazon effect. 2) ERP in the Cloud. 3) Big data. 4) CRM. 5) Flexibility. 6) Mobility. 7) ERP for small business.

  1. The Amazon effect: Amazon has been making a splash everywhere you turn. There are distribution centers within a short proximity to key markets. Sunday deliveries. Reinvented publishing.  The bottom line is that customers expect 24/7 access and quicker delivery with exceptional service, and you must figure out how to make it happen! Thus, e-commerce is no longer a “nice-to-have”; instead, it is a “must-have” in your ERP system. Your customers will want to order, understand their order status and provide feedback at any time, any day of the week.
  2. ERP in the Cloud: People are becoming more comfortable with the idea of ERP in the cloud. There is less complexity, less work, less skills and often times less cost required while accessibility is increased and your ability to recover from a disaster is improved. The “big guys” like SAP and Oracle are going down this path and so they are seeing enough advantage to invest.
  3. Big data: Although big data is “old news,” it remains “new news” in terms of implementation and utilization. We are living in an information overloaded society, and so concepts like big data will be essential in making sense of it all. Business intelligence can be utilized to better understand customer trends and how to optimize inventory and margins – who wouldn’t consider this approach?
  4.  CRM: Since I’ve always focused part of my practice on ERP as it’s an essential tool for manufacturers and distributors, and I have a unique skill of zeroing in on connection points (which is cornerstone in selecting, designing and implementing systems), I’ve noticed that a particular connection point has arisen as a key contributor to bottom line business results – CRM (customer relationship management) functionality.  You must start with the customer to succeed; thus, better understanding your customer relationships is a great place to start (CRM).
  5. Flexibility: Old (often called legacy) systems are rarely flexible. To succeed in the fast pace of the new normal business environment, you must be flexible. Those who can introduce new products rapidly, adjust capacity rapidly, change items on the fly etc. will thrive. Your ERP system is the backbone.
  6. Mobility: Do you know anyone who doesn’t have a cell phone? Even my parents cannot remember how they survived without a cell phone. They don’t keep track of appointments, look up directions and utilize advanced functionality but they understand that it exists – and so they utilize their resources in those situations (call their kids). Being connected 24/7 requires mobility. It should be fundamental to your ERP system.
  7. ERP for Small Business: ERP is no longer just for medium to large size companies. In my recent experience with ERP selection projects, the cost is minimal vs. the automation and speed advantages it will provide to even a small business. Do customers care if you are small or big when they want an order status at 8 pm on a Sunday?

Of course, understanding these trends is a great first step; however, it is useless unless you put together a plan of action on what is noteworthy for your company and your situation. What will you do differently tomorrow? Many of the best inventions were invented by someone else long before the known inventor; however, they did not act upon the goldmine.

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What are the Benefits of SIOP?

January 7th, 2014
Companies that conduct effective Sales, Inventory and Operations Planning (SIOP) are able to balance supply with demand an exceed customer expectations.

Companies that conduct effective Sales, Inventory and Operations Planning (SIOP) are able to balance supply with demand and exceed customer expectations.

Sales, Inventory and Operations Planning (SIOP) is a process that manufacturers and distributors utilize to align supply with demand.

What are the key benefits?

•      Happy customers:  Lately, I’ve seen this objective rise in importance – customers want more for less NOW. Lead times must decrease! The SIOP process can have a direct impact on on-time-delivery percentages, past due dollars and lead times.

•      Increased margins:  One of the key benefits of aligning demand with supply is that it provides the opportunity to increase production efficiencies (because you have more time to plan effectively), increase logistics efficiencies (by having more time to optimize and through customer collaboration opportunities), reduce purchase spend (with a longer forecast, there is opportunity to develop contracts and collaborate with suppliers), and increase revenues (through customer partnerships).

•      More cash: By balancing demand with supply, you have more of the right items at the right place at the right time.  Thus, inventory levels can decline without negatively impacting service levels.  Thus, cash is freed up for better investments.

•      Improved teamwork: The SIOP process has also proven extremely effective in bringing cross-functional teams together to agree on one plan.  Although it doesn’t sound difficult, I’ve worked with countless companies that have multiple plans – one for Wall Street; one for sales, yet another one for production and potentially yet one more with new product development goals.  Once everyone is working from the same sheet of music, results follow and morale improves.

•        Increased revenues:  What else could you ask for to round out the benefits?  By collaborating with customers on their demand (and often on collaborative inventory programs), you become a dependable, more valuable partner.  I’ve seen volumes increase multiple times as a result.

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