Tag Archive: manufacturer

The Sheer Relevance & Impact of Transportation (A Billion Here, a Billion There)

November 24th, 2018

Recently, I attended Mobility 21, the Southern California transportation coalition, and it reminded me of the sheer relevance of transportation.  No manufacturer can operate without transportation: distributors are out of business without trucks dropping off and picking up, healthcare would stop functioning and our frequent Amazon orders would be a thing of the past.  In essence, everything would come to a grinding halt!     

Certainly, trucks are what we typically think about when it comes to transportation.  They account for $722 billion in freight flows with Canada and Mexico, for example. Whereas rail still accounts for $174 billion (not pocket change).  The ports are our gateway to the rest of the world (and the Los Angeles ports alone bring in 40% of the U.S. volume). Air carries an impressive number of packages especially with the rise of e-commerce. UPS and FedEx are expanding at amazing rates, especially at Ontario airport, the hub of e-commerce activity.  For example, during the 2017 peak season, this region of UPS alone processed 13.1 million packages!

At Mobility 21, there were some interesting statistics throw out:

  • AAA has 60,000 service calls per day
  • Transportation has a $700 billion dollar economic impact on Southern California and accounts for 1/3 of the jobs in Southern CA!  
  • 350 billion miles each year are driven in California
  • The number of trucks is expected to go from 1.8 trillion to 3.9+ trillion by 2045
  • And the list goes on….

What Should We Consider and/or What Impacts Could Arise?
At a minimum, why not take a step back to think about your transportation network?  What does it look like? How do you receive materials and products? Do you use the ports?  Air? Rail? Undoubtedly, you use trucks! How expansive is your network? Are there many players involved?  Since it could cause your operations to cease, it makes sense to find out!

Next, think about what you’d like your transportation network to deliver.  Do your customers expect rapid deliveries and “above and beyond” service? If so, who is your partner in ensuring this occurs?  

Your transportation partners are your last face to your customer. And, in today’s marketplace, there is a significant demand and challenges your transportation partners must navigate.  If you plan to be successful, you must stay on top of your transportation network and partners. Are you attractive to them? Perhaps we better think about that further….



Are You Reshoring?

October 5th, 2017
reshoring and manufacturing

Many U.S. companies active in China have moved some operations out of the country – 38% relocated to North America.

My APICS Inland Empire Chapter hosted a program on “Changing Trade Policies and its Effect on Reshoring” with Michele Nash-Hoff, author of “Rebuild Manufacturing – the key to American Prosperity”. And, interestingly, the Institute of Management Accountants (IMA) Orange County chose “Onshoring Profits: Manufacturing is Not Dead Yet” from a long list of topics and asked that I speak on its impact. Thus, it seems only appropriate to discuss a few common themes:

  1. U.S. firms are leaving China as conditions worsen. Actually, 25% of U.S. companies active in China have moved some operations out of the country.  38% relocated to North America.
  2. In 2014/2015, parity was reached between offshoring & returning jobs.
  3. 7 industries have reached the tipping point of returning to the U.S. and these sectors account for 70% of U.S. imports. For example, computer electronics, electrical equipment, and furniture make the list.
  4. Using purchase price or landed cost do NOT capture total cost of ownership and can lead to incorrect sourcing decisions from a financial viewpoint.
  5. 70% of executives are thinking about reshoring.

Where are you sourcing from currently? Don’t just jump on the new bandwagon of reshoring – but you should give your total cost of ownership a second look as well as dig into your customers’ expectations and sourcing impacts. You might just be surprised as to what this new view tells you!

 

Did you like this article? Continue reading: Reshoring Gains 

Save



The Importance of Logistics & the APICS-IE Symposium

April 25th, 2017

I attended the Southern California Logistics & Supply Chain Summit last week, hosted by the Inland Empire Economic Partnership, UPS and the Drucker School. It was certainly interesting to hear about the latest trends in logistics as it is such a crucial industry in Southern California and one of importance to jobs. Coincidentally, logistics is the theme for our upcoming APICS Inland Empire executive panel and networking symposium. Join us to learn more about disruptive innovations in logistics. Are you staying on top of what’s relevant to your company? No matter what you do, I have no doubt logistics affects you!

disruptive innovations

One tip to implement this week:

Well, of course, if you are in Southern California, I advocate that you learn more and sign up for our event. We have an amazing panel of experts, and it will be engaging discussions from all walks of life – transportation policy, rail, truck, import/ export, distribution and the like. Are you interested in getting ahead of the crowd to see what’s coming?

It is also a good idea to take a few minutes to think about logistics. It is definitely cornerstone in Southern CA since 40% of all the nations cargo goes through our ports which then is transported via truck, rail, air, distribution, etc. to manufacturers, consumers, healthcare systems and more. Think about the sheer volume that someone like Amazon ships on a daily basis? It is mind boggling.

Also, did you know Southern CA is #1 in manufacturing? Every manufacturer is accompanied by logistics partners bringing materials and components in and transporting products out. Construction is still quite prevalent in the area, healthcare is on the rise – and each of these industries involves logistics.

There are countless ways to improve upon logistics to enhance your customers’ experience and increase profitability. Take a few moments to brainstorm ideas and strategize on this key topic.

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…”



MCIE Innovation Awards of Inland Empire Adds College Student Category

January 5th, 2017
mciebanner

MCIE Innovation Awards of Inland Empire, to be held at the Ontario Convention Center on Feb. 3, announces the new Student Award for college students.

Lisa Anderson MBA, CSCP, president of LMA Consulting Group and program awards chair for the Manufacturers’ Council of the Inland Empire (MCIE) Manufacturer’s Summit E=mc² Innovation Awards, a special award ceremony celebrating innovative businesses solving challenges in today’s manufacturing industry, is pleased to announce a new category award of Student Award in addition to the five award categories of Innovation in Product Development, Innovation in Resource or Process Efficiency for Manufacturers, Innovation in Human Capital and Talent, and Innovation in Marketing. Submissions are due by January 16, 2017, with awards made at the Manufacturing Summit, the largest event of its kind in Inland Southern California, to be held at the Ontario Convention Center on Friday, February 3, 2017.

The E=mc² Innovation Awards are a great way to showcase what a company is doing to be innovative to raise the bar,” shares Award Chair Lisa Anderson. “In a climate of robust global competition, talent shortages due to skills gaps, Amazon and mega distributors changing the competitive landscape and poor employee engagement, these awards can prove to Inland Empire companies and their employees, that they are innovative and have great ideas to grow their business and remain competitive. And with the addition of the student category, we now have a spotlight on hiring recent graduates who showcase their talents with their submissions.”

Award winners have tapped into new ideas, processes and manufacturing techniques to build and improve their businesses. Previous winners include Riverside, Calif.-based Newport Cottages, a children’s furniture manufacturer and winner of the Innovations in Human Capital and Talent Award, struggled with workflow issues unable to increase sales from new orders while managing the demand from current customers. They partnered with the Riverside County Workforce Investment Board to promote and facilitate a Lean Manufacturing Transformation Rollout Program and turned their disorganization into a true company transformation.

Last year’s Innovation in Resource & Process Efficiency Award Winner, Celestica, a design and engineering through to manufacturing and after-market services firm based in Ontario, Calif., had to overcome a dual problem of reducing costs as requested by customers while improving efficiency to handle more orders. They had to evaluate their operation, perform a Kaizen Blitz to eliminate non-value add activities and rely on employee’s creativity to improve receiving and overall operations.

The 2015 E=mc² Innovation in Marketing Award went to the Riverside, Calif.-based Phenix Technology, a recognized manufacturer and seller of high quality professional fire helmets, for revitalizing this Made in America, 40-year old company into a global powerhouse. Angel Sanchez, Chief Operating Officer and Director of Global Operations of Phenix Technology explains, “As a small business in California, we struggle to compete with large manufacturers from all over the world. Many have what seem to be unlimited budgets for marketing along with reduced costs for doing business.” But part of not just surviving, but thriving is the innovation many in the Inland Empire have. “We are committed to making our products in the Inland Empire, says Sanchez. “To ensure we can continue doing so for decades to come we focused our energy on innovation. From lean manufacturing to creative marketing, we work hard to thrive in California. It was an honor to be recognized for our efforts and hopefully our model can help other small business to succeed.”

The 2017 Manufacturing Summit will be held Friday, February 3, 2017, at the Ontario Convention Center. For more information, visit MCIE Website or cut and paste this link http://mfgcouncilie.com/homepage/.

 



Strategic Pricing

October 31st, 2016

supply chain

I’ve been working with a new client recently on digging into costs; however, we aren’t taking the traditional cost-cutting approach. Of course, the more efficient and less costs required to run a manufacturing operation, the better, assuming customer service, cash and other metrics remain intact. However, if you take the big picture, cross-functional view of costs and process improvements, you are bound to find opportunities.

In this case, if we can find opportunities, we can go from being a small player in a new market with significant potential to being a going concern. If we are losing deals because of pricing, there might be an opportunity to think differently and design a new formula for success. Lower prices across-the-board is rarely better. Instead, think strategically about pricing.

For example, we followed a strategic pricing strategy when I was a VP of Operations for a mid-market manufacturer. In that case, we knew that if we covered variable costs and strategically priced while considering the break-even point and contribution margin, we could cover key costs, grow the business and increase profitability. We followed the plan and results followed. If we had kept going down the current path, we would never have sold the business for a significant profit because results would have been “too slow”. In today’s Amazon-paced world, you can miss your opportunity in a blink of an eye.

One tip to implement this week:

For this week, depending on your position and expertise on pricing, my suggestion is to learn about pricing. How significant a variation does your company provide in pricing? Why? Are there certain volumes, combinations of items or special circumstances that reduce costs so that you can pass on some of the savings to your customers? Do you know what market pricing dictates

If you are already on top of pricing, take a step back and think about pricing from a strategic standpoint. How important is pricing as a reason your customers buy from you instead of the competition? What is most important to them? Are there certain customers or products where an increased level of sales would make your company more attractive to investors, customers and other stakeholders? What are your trade-off’s with profitability? Have you thought about pricing differently based on ABC customers and/or products? Gather your team and discuss. Golden nuggets might just arise.

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…”