Tag Archive: lead times

Big Grocery Chains Ramping Up Pressure on Food Suppliers

January 23rd, 2018

According to a Wall Street Journal article, Kroger (#2 grocery chain in the U.S.) and Walmart are ramping up pressures on food suppliers.  There is too much lost money due to shortages!  Thus, the industry is waking up to the critical importance of on-time delivery and customer service especially as they compete with on-line retailers like Amazon.  

Kroger is fining suppliers $500 per order that is more than 2 days late to any of its 42 stores.  That can certainly add up!  And, Walmart is charging 3% for late deliveries.  This could prove transformative.  

What is Your Delivery Performance?

How is your company performing in terms of delivery?   No matter the industry, delivery performance is having a significant impact on scalable, profitable growth – or lack thereof.  My best clients are paying close attention and finding ways to get ahead of this curve.

What Should We Consider and/or What Impacts Could Arise?
Let’s start at the beginning.  Do you know what levels of service you provide to your customers?  Is it the same level to your A customers as well as your C customers?  Find out.  

On-time-in-full (OTIF) is rapidly becoming the standard for measuring this performance.  If you don’t have a metric, just start with this one as a base.  Or, worst case, start with whatever you can measure rapidly – and evolve over time.  Of course, service alone won’t cut it.  Lead times and other factors enter the equation….

Staying Competitive
Clearly, if you are not high performing in the food and beverage industry (and consumer products in general), you will not stay viable anymore.  Amazon will be happy to fill the gap.  However, since I work with small and medium, family-owned manufacturing companies to  private-equity backed firms and large multi-billion dollar enterprises across a wide variety of manufacturing and logistics industries, it is quite clear that food and beverage is not alone!  

Have you been tested yet?



Outsourcing, Insourcing or Near-Sourcing?

November 8th, 2016
outsourcing near-sourcing insourcing

Whether outsourcing, insourcing or near-sourcing or a combination of all three, manufacturers need to reassess their strategies to measure risk and ROI.

We are managing in an Amazon-impacted world. Customers expect rapid deliveries, 24/7 accessibility and products and services tailored to their needs. Customers are not willing to wait. In fact, they prefer same-day delivery.

Our manufacturing clients are experiencing lead time reduction requests from their customers. Some are requests; many are required to maintain the business. It is wide spread. Building products that clients ship within a day. Food clients ship rapidly — within a day or a week at most. Optics, industrial equipment, consumer products — across-the-board requests for shorter lead times. And even clients such as aerospace with traditionally long lead times have slashed lead times by 50%.These provide extreme challenges with extended supply chains.

If customer expectations weren’t enough, labor costs in China and other outsourced manufacturing geographies are increasing. Other costs including sometimes hidden costs are high as well. The bottom line is that for non-commodity products, the total costs of outsourcing are rising to parity with North America sources.

And, risks abound. Natural disasters, political conflict, port strikes, bankruptcies and more. Thus, executives are reacting to these factors and re-thinking their strategies about outsourcing, insourcing and near-sourcing.

Please help contribute to our research study. If you have outsourced, insourced or near-sourced or if you have thought about and/or evaluated any of these options or plan to in the future, we’d appreciate your input. Complete the survey and help others facing the same decisions make better decisions. Also, please register if you are interested in receiving the results.

Did you like this article? Continue reading on how to strengthen your Eagle Eye:

Outsourcing, Insourcing & Near-sourcing?

Lost in the Culture Change Maze? 4 Strategies to Succeed

 



Lisa Anderson Presents “The Increased Need for More Control, Speed and Profit”

October 27th, 2016
webinar

Join LMA Consulting Group President, Lisa Anderson, as she hosts an interactive discussion on how supply chain leaders can make their businesses thrive when they’re up against shorter lead times, increasing risks and labor rates.

Lisa Anderson MBA, CSCP, president of LMA Consulting Group and a sought after manufacturing, distribution and supply chain consultant, speaker and writer who works with manufacturers and distributors in aerospace, building products and food is presenting “The Increased Need for More Control, Speed and Profit: How to Thrive in the Environment” in a TalentStream webinar on Wed, November 2, 2016, at 12:00 PM to 1:00 PM EDT. As the recession is long over and manufacturing has been reigniting, executives are re-evaluating their end-to-end supply chains in response to the critical importance of short lead times, increasing labor rates in low cost countries, concerns about “too much” money tied up in inventory due to lengthy lead times and worries about the increased level of risk. This presentation will feature an interactive discussion on how supply chain and operations leaders can re-configure their supply chain and re-focus their efforts to not only remain competitive but to thrive in this environment.

“In today’s Amazon-impacted marketplace, customers expect rapid deliveries and 24/7 accessibility at low prices. Executives are turning previous notions about offshoring upside down,” explains Anderson. “And although there are key challenges, customers don’t want to hear about our obstacles, they just want their orders faster. If we ignore these demands, we risk our customers going to our competitors who can get them what they need when they need it at the right price and level of service.”

“Since service has risen to a level of critical importance, I’m starting to see my clients and colleagues consider what it will take to bring manufacturing back to the U.S. and/or to nearby countries. I’m conducting a research study to dig into this topic in more detail so that my clients can stay ahead of the curve. Success will not follow those late to the party. Customers will go to those who have the right product at the right price at the right location at the right time. Join us for the webinar to find out how supply chain management is becoming strategic to business growth and success.”

Capitalizing on her over 25 years of experience advising manufacturers and distributors on supply chain, operations, ERP and SIOP, Anderson continually provides data that helps manufacturers and distributors focus in on which people, process and system improvements are essential to preparing their supply chains to create a sustainable advantage.

TalentStream, a recruiting company that helps emerging technology companies secure the right people, the most critical piece of the puzzle to build and grow a successful business, is hosting the complimentary webinar. Registration is required.

 



Research on Outsourcing Trends in Manufacturing

October 20th, 2016
Lisa Anderson

Manufacturing Connector Lisa Anderson initiates research study to better understand the outsourcing, nearsourcing and insourcing trends and how these practices impact manufacturers’ and distributors’ strategies.

LMA Consulting Group’s Lisa Anderson Conducts Research on Outsourcing Trends in Manufacturing

Lisa Anderson MBA, CSCP, president of LMA Consulting Group, is launching a third industry research study to help manufacturers, distributors and supply chain executives identify, understand and anticipate the trends in outsourcing, nearsouring and insourcing. On the heels of the recession and an earlier trend by business to outsource, many businesses have jumped on the outsourcing bandwagon only to reverse course and bring all or some of their production back in-house. Later hybrids of insourcing and nearsourcing have helped companies maximize total value and more effectively meet customer demand. The study will look at national trends and have a subset of Southern California business activities.

“It is our goal to be on the leading edge of trends impacting manufacturers and distributors so that we can recommend strategies to not only remain competitive but to thrive in today’s era of volatility,” explains Anderson. “Following on two of the most vital ingredients for success of any company – employees and customers – reflected in our Skills Gap research and Amazon Effect studies, we wanted to turn our attention to a topic receiving global attention that greatly impacts both employees and customers — outsourcing, nearsourcing and insourcing. I saw many executives follow the popular wave of outsourcing with short-sighted decisions to outsource key products because they thought they would save significant labor costs and be congratulated by corporate, Boards and the like, only to find out it wasn’t as easy or successful as they thought. Not only did they consume all sorts of resources in trying to manage the process, they also extended lead times, created disgruntled customers and often-times, stockpiled inventory. With the emergence of some of the newer, hybrid versions of nearsourcing and insourcing and with the rise of the customer in today’s Amazon-impacted and high-tech, automated world, I think it will be fascinating to see what can and should be reversed and what innovations can be developed to support this “what makes sense” strategy of positioning inventory close to the customer.”

Capitalizing on her over 25 years of experience advising manufacturers and distributors on supply chain, operations, ERP and SIOP, Anderson continually provides data that helps manufacturers and distributors focus in on which people, process and system improvements are essential to preparing their supply chains to create a sustainable advantage.

Qualified participants in manufacturing and distribution are welcome to complete the survey.  The complete Outsource, Nearsource and Insource report will be available in 2017. To receive the free report when it is available, register here to automatically be sent a copy.

For information about Lisa Anderson, go to https://www.lma-consultinggroup.com/ or call 909.630.3943.

 



Why Marketing Shouldn’t be Overlooked with SIOP

November 18th, 2015

supply chainI’ve been partnering with clients to design and implement SIOP (sales, inventory and operations planning) programs the last several years as I’ve found them to be a GREAT way to achieve several results simultaneously: 1) Support growth, 2) Improved service levels/quicker turnaround of deliveries (shorter lead times), 3) Improved margins and efficiencies, 4) Accelerated cash flow; and 5) Improved employee morale and teamwork. Although the technical side plays an important role (figuring out future demand and aligning with manufacturing, staffing, suppliers, etc.), the aspect that generates the best results is that it aligns the executives and functions within the organization (and can even go to customers and suppliers).

We’ve achieved significant results in all sorts of industries and company sizes, and Marketing always plays a key role in the process. One of my innovative clients renamed the process SMIOP (with an added M for Marketing) as they wanted to highlight marketing. I thought that was a great idea. If you don’t have your marketing processes in full force, your demand plan will be lacking and you won’t be synced up with your supply side. Thus, I wanted to share the importance with you.

One tip to implement this week:

Many of you probably think you are not responsible for marketing; however, in the best companies, all employees relate to marketing. What is your brand and perception in the marketplace? Each employee can have an impact on that. Also, how well are you engaging your customers? Do they see you as the experts in your industry? If so, they will be more likely to partner with you. From a SIOP perspective, marketing has invaluable input into the demand plan.

Take a step back and think about how you affect your customer (even via internal customers on the way to the customer)? Start there. What ideas and suggestions do you have? Could you read up on industry news and share it with your supply chain team? It could be invaluable insights. One of my aerospace clients had a GURU when it came to knowing the industry. He was extremely valuable in areas that were related to his position but could be overlooked if his manager didn’t value marketing.

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…”