Tag Archive: efficiencies

Let’s Manage Inventory for Our Customers

May 16th, 2019

inventory managementAmazon is propelling this age-old topic into a new realm. Since the CEO of the Ontario Airport Authority used the phrase “last mile” has become “last minute” on a panel I facilitated last year, I have shamelessly reapplied his brillant quote.

If customers don’t even know what they want, how can we? Interestingly, we have found that many customers, even the seemingly most confused and  volatile ones, have a pattern to their demand. If we take a holistic view of their demand and inventory planning processes from beginning to end and from high level to the minute detail, solutions emerge.     

One strategy that has proven quite effective is to “remove the middleman”, the customer himself. Instead, with access to demand information direct from the customers’ customer or end user, you can not only manage the extended supply chain inventory better for a happier customer but you also can improve margins, efficiencies and cash flow to boot.

In consumer products circles, this strategy often termed, vendor managed inventory is usually dictated by the “big guys”.  In aerospace, it is also expected but termed differently, customer based ordering, min max and other names. It is also common in healthcare as we won “supplier of the year” for two years in a row because of what we accomplished with VMI for Cardinal Healthcare when I was VP of Operations at PaperPak. We decided to make it a strategy for key customers at PaperPak, even though Cardinal is the only one who requested it. Should you consider a strategy like this to get ahead of your customers’ demand?  It is just another aspect in creating a resilient supply chain. Check out our series on the topic.

 



LMA’s 2018 Advocate Award and Recognition

August 25th, 2018

On the 10 year anniversary of my business, I recognized 10 people for 10 years as LMA Advocates – people who have gone over and beyond, resulting in LMA Consulting’s growth and success.  I truly appreciate their support, expertise, ideas and feedback. I would not be here today without them – and certainly not leading a growing and leading edge consulting practice that partners with manufacturers and supply chain organizations to create BOLD customer promises and profits.  

Ever since my 10-year bash, I’ve recognized one person each year on the anniversary of LMA Consulting.  Recently, on my 13-year anniversary, I announced Kelly Ford as our 2018 LMA Advocate.

 

Kelly Ford and I have worked together at three separate aerospace organizations and at least double or triple that in terms of projects. We have achieved significant results together (improved customer service levels to support business growth, expanded capacity and efficiencies, and right-sized inventory levels to maximize the use of cash and capital), and, most importantly, she orchestrated it so that we achieved these results while valuing and engaging people.

I find Kelly a pleasure.  It is not often that I find a client who is interested in continual improvement, is willing to try new ideas and stick with them as the inevitable obstacles arise and is so well-respected by her team. (So much so, that everyone pulls together to “make it happen” and has fun during the process.)  

One tip to implement this week:
Are you recognizing people who have been instrumental in your company’s growth and success?  Don’t think about this only in terms of direct relationships. For example, don’t just recognize the sales person who bagged the elephant. Instead, think about each person’s contribution to growth and success. Is there someone who is invisible working in the background (perhaps taken for granted) who makes it happen on a daily basis?

Also, don’t just think about sales and revenue growth. Although revenue is clearly relevant, expand your viewpoint – is there someone who “passes the ball” to your sales team?  Most likely – yes! Who has the best pass percentages? Since I went to UNC Chapel Hill (Tar Heels), I have become accustomed to winning at basketball. Solid players that pass are invaluable to the team.

Find the gems in your organization and recognize them.  Thank them in front of their peers. Tailor their ‘award’ to what is meaningful to them.  Perhaps your winner wants to be on a special project team or attend a training session. Why not make it meaningful and demonstrate your appreciation for the contribution to success?

And, Thank You, Kelly Ford!



Who Cares about Process Disciplines?

August 9th, 2016
process discipline

Increased margins and company growth are easier to reach when process disciplines are emphasized within an organization

Who cares about process disciplines? All executives say they care but few are willing to focus the efforts on instilling process disciplines. It seems like a less important topic than creating a new product, expanding into new markets or increasing margins; however, it is at the crux of success! No improvements can be made in inventory, service, efficiencies and the like without starting here.

When we see a client with excellent process disciplines, we typically see the following:

  1. Clear understanding of roles and responsibilities
  2. Clear understanding of the process steps and related system transactions that support the business.
  3. Clear understanding of the timing, sequencing and interaction among process steps and functional departments.

We’ve seen some clients with books of process documentation yet very little success with process disciplines. Of course, having a documented process is a good idea; however, that alone will get you nowhere. Instead, think about and communicate the importance of process disciplines. Support the documentation of “what makes sense”. And results will follow.

After 11 years of consulting and 15 years before that in organizational life, I can communicate with absolute certainty that those who emphasize process disciplines will be more successful in growing the business and increasing margins than those who don’t. If you’d like to talk over how process disciplines could be strengthened in your business, contact us.

 

Did you like this article? Continue reading on how to be the Strongest Link in your organization:

Bedrock Topic: Inventory Accuracy

The Significant Value of Processes

 



The 4Ps to Collaborative Customer Program Success

December 12th, 2013
When connecting people and process, think about using customer collaborative programs to link strategy with execution.

When connecting people and process, think about using customer collaborative programs to link strategy with execution.

Collaborative customer programs are becoming increasingly popular in today’s new normal business environment. Customers such as Cardinal Healthcare, Boeing, and the like are searching for ways to partner closely with suppliers in a way that will achieve a win-win result. There are numerous examples of these types of programs – of course, they are all termed something different such as VMI, consumption-based ordering, auto replenishment, forecast and replace, and the list goes on. Yet the end result is the same: improve service and efficiencies while decreasing lead times and inventory investment.

Why Bother with Customer Programs?

I’m a supply chain and operations consultant and former VP of Operations and Supply Chain for a mid-market manufacturer and have implemented numerous collaborative customer programs which have resulted in dramatic improvements in service, cash flow and cost. For example, during my tenure at PaperPak, an adult incontinence manufacturing company, we achieved the following successes with our #1 customer:

  • Recognized by #1 customer as “supplier of the year”
  • Increased sales
  • Became “part of the customers’ organization”
  • Doubled inventory turns
  • Improved customer service to 98%+
  • Reduced lead times and improved costs

Since then, I’ve partnered with several clients to achieve these types of results. Over time, several keys to success emerged: 1) People. 2) Partnerships. 3) Process 4) Provider

1. The first key to success is people
The right people are your #1 asset. First, senior leadership can make or break any collaborative program. As with any substantial undertaking that crosses functional lines, senior leadership must provide commitment and support, have a high level understanding of the value that can be achieved through the program and be able to explain the whys. Thus, the key resources’ individual goals are tied to the big picture and tools and support are provided. For example, in every customer program, there is some sort of upfront cost, inventory investment, resource investment, etc. (even if it provides a 20:1 return, an upfront investment / process change can be a hurdle); thus, if support doesn’t exist, the program would never get off the ground.

Second, the right planner is critical. I discovered this the hard way a while back. After putting the wrong person in the role, I quickly discovered the importance of finding the right person with the right skillsets for the position. This position requires a delicate balance of analytical skills, customer service skills, communication skills (as planners are always at the center of competing priorities), logistics skills, and financial skills.

2. The second key to success is partnerships
This is back to point #1 – the right people; however, this is in terms of the right people and partnerships with customers and suppliers. The definition of a partnership is simple – ‘win-win’. To create a successful collaborative program, it requires a close partnership with your customer. The ingredients for a successful partnership are trust, the ability to find and create win-win ideas, a focus on collaboration in terms of customer demand, goal setting and metrics scorecard reviews. The same holds true for your suppliers. View your customers and your suppliers as an extension of your company and supply chain. With a partnership, you should be able to turn 1 + 1 into 5, meaning your returns will be exponential over what you will achieve on your own.

3. The third key to success is process
To ensure flawless execution and customer service, process is king. Rigorously following the traditional plan, do, check, act model can yield significant results. It has been shown that although the majority of people spend the majority of their time on the “do” of plan, do, check, act model, the successful implementers spend a very small portion of time (10%) on “doing,” Instead, it is plan (70%), do (10%), check (15%), and act (5%). As this implies, follow-up/ audit is also essential for success – it is how metrics review, best practices and continual improvement is built into the process.

4. The fourth key to success is provider
Last but not least, the software tools and provider supports your people and process. For collaborative programs, this can include EDI (electronic data interchange), forecasting and VMI software tools. For example, I discovered that after utilizing multiple software suppliers and discovering the keys to success through trials and tribulations, it is apparent that bells and whistles do not = success. Instead, what really matters is the following: 1) a partnership approach, 2) the right combination of functionality, flexibility and cost and 3) forecast features.

After these fundamentals are in place, you can drive additional efficiencies and customer intimacy through continuing to focus on the 4 Ps. When connecting the people and process elements, think about using customer collaborative programs as a strategy to link strategy with execution. The benefits will continue to grow as the elements of customer collaboration are implemented throughout the supply chain. As you expand, your results will grow exponentially – increased customer partnerships and intimacy and improved margins and cash flow.