Tag Archive: manufacturing

Manufacturing Adds the Most Jobs in the New Year

February 1st, 2019

According to Industry Week, manufacturing employment increased almost 300,000 over the last year!  This is after increasing around 200,000 the year prior – more than a 40% increase. This is much more significant than the numbers alone convey because, according to the National Association of Manufacturers, for every $1 spent in manufacturing, $1.89 is added to the economy.  Manufacturing is hot and relevant.

Not only is manufacturing relevant to the economy, it is relevant to the customer experience.  Have you thought about how much more flexible you can be with your customers’ desires if you can manufacture on the fly? There won’t be a better time to ride this wave to success. Are you debating or jumping on?

What Should We Consider and/or What Impacts Could Arise?
Whether you are in manufacturing or related to manufacturing or impacted by manufacturing, you should pay attention. As manufacturing surges and takes on a new relevance in the economy and to your ability to provide a superior customer experience, you might have opportunities to grow and scale your business to new heights. Have you thought about how you’ll take advantage of these opportunities?  Will you be a follower or an innovator?

At a minimum, being informed about manufacturing and supply chain industries, latest trends and opportunities seems like a good idea.  Join an organization such as the Association for Supply Chain Management (ASCM/APICS) and participate with classes, tours and webinars, read articles on the topic (there are hundreds, if not thousands, in the archives), listen to experts, pick up the Wall Street Journal or attend an industry event. Why not kick off the New Year informed?  Being informed is part of what’s needed in creating a resilient supply chain. For additional strategies to create a resilient supply chain, check out our new series:



The News is Paying Attention to Manufacturing: Are You?

January 21st, 2019

It wasn’t too long ago that no one talked about manufacturing. In fact, people thought it had moved to China.  Now, we see it in the headlines frequently. A quick glance in just the past few weeks yields:

  • Airbus is pulling out all the stops to try to make their 800 plane target before year end
  • Durable goods orders rose .8% in November
  • Manufacturing is key to New York’s job creation of 27,000 in energy storage
  • Manufacturing is driving Vietnam’s decade-high growth
  • China’s industrial profits drop for the first time since 2015

What Should We Consider and/or What Impacts Could Arise?

If you are in manufacturing or relate to manufacturing, pay attention!  There is plenty of opportunity to grow and thrive in today’s business environment. What are you doing to take advantage of the vast potential? It might be that time to take a risk and speed by your competition. Who else will be able to customize and deliver rapidly with a superior customer experience if not you?

Are you searching for these opportunities?  If you create a resilient supply chain, you’ll have a far greater chance to “see” the opportunities as they arise AND you’ll be well-positioned to take advantage of them.  Very few companies predict well but the best ones are agile and navigate quickly and successfully to achieve peak performance while the rest fall by the wayside. For additional strategies to create a resilient supply chain, check out our new series:



What’s Ahead for Supply Chain?

January 18th, 2019

To think about what’s ahead in supply chain, it is important to put it in perspective with what’s ahead in business.  Read our article, What’s Ahead in Business? for details on the key trends impacting business:

  • Importance of the customer experience
  • Taking the holistic view has become a “must”
  • Volatility is the new norm
  • The coming power of manufacturing and supply chain

Given these trends, we predict our most successful clients will be thinking about these themes in the end-to-end supply chain:

  1.  Manufacturing is the Place to Be: Manufacturers are uniquely positioned to thrive. I have to say, I love that manufacturing is getting its due. According to NAM, for every $1 spent in manufacturing, $1.89 is added to the economy which is the highest multiplier of any economic sector.  
  2.  Distributed Inventory Management will be Key to Manufacturing Success: In today’s Amazon-impacted business environment, the customer expects rapid, low cost delivery. Given that the “last mile” has also become “last minute” with customers changing their mind frequently, predictive, distributed inventory management has become a differentiator.   
  3.  Additive Manufacturing will Rise to the Top: Customers want customized products on the fly. Yet, distributors cannot stock everything near every manufacturer, end user and the like. 3D printing can achieve this goal.
  4.  Customized, Rapid Delivery with Amazon-like Service and Efficiency is the Norm: In addition to additive manufacturing, re-shoring and near-sourcing (locating close to customers) are viable solutions to achieve Amazon-like service. The question is how to be efficient, cost effective and visible while serving customers.
  5.  Amazon Prime for Manufacturers is More than a Pipe Dream:  Subscription based models are becoming relevant to manufacturing, just as to Netflix and ERP systems. According to my friend, colleague and author Robbie Baxter, the membership model is just as relevant in manufacturing in transitioning from a one transaction/one-way communication to an ongoing relationship with the customer with a constant stream of feedback.  
  6.  We are Moving to a Digitized Supply Chain:  To address customers’ elevated expectations while continuing to make a profit, manufacturers and supply chain organizations are moving to a digitized supply chain. Artificial intelligence, IoT, the smart factory, robots and more. Don’t embrace technology as a fad.  Instead, embrace technology as a way to achieve a result.
  7.  To succeed, We Must Create a Resilient Supply Chain: Disruptions and volatility abound. Customers expect more. Boards expect more. People are harder to find and retain. Creating a resilient supply chain enables a proactive response to the current environment.

What will you do to get ahead of the curve in the New Year?

  Did you like this article? Continue reading on this topic:

The Strongest Link in Your Supply Chain

What’s Next in Supply Chain?

Is Your Supply Chain Ready for Growth?



Amazon, Uber, Netflix and More…..Disruption is Here to Stay!

November 7th, 2018

Although not an official theme, it was quite clear that disruption was the common theme at the Association for Supply Chain Management (ASCM/ APICS) Annual Conference.

From the keynote speaker, Marc Randolph, one of the founders of Netflix, to almost every executive and thought leader, disruption is top of mind.  Amazon has disrupted retail.  Netflix has disrupted television. Uber is disrupting the transportation industry.  Do you know what disruption is likely to impact your company – and career – next?

Certainly, Netflix is disrupting television and cable currently.  At its roots, it disrupted the video industry.  Blockbuster was a powerhouse when Netflix was getting started.  It was fascinating to hear that discussion!

Marc brought up an intriguing concept – how to disrupt yourself.  To give you the highlights, he discussed three items you need:
1) Tolerance for risk – You cannot wait for full information before you “move”.
2) An Idea – contrary to popular belief, it does not need to be big, new, complex or even good.
3) Confidence.

What Should We Consider and/or What Impacts Could Arise?
Marc’s advice is “right on”.  So, how might you go about it?  For our clients, manufacturing and supply chain organizations, disruption is commonplace.  The key question is how do you have any hope of getting ahead of this instead of being buried by the likes of Amazon and other disruptors?  The answer – create a resilient supply chain!

What IS The Supply Chain?
Let’s start by defining supply chain: your end-to-end supply chain, starting with your customers’ customers to your manufacturing and distribution operations to your suppliers’ suppliers and all connections in the middle such as transportation, systems, financials, processes, and most importantly, people.  This is quite the topic to create a resilient supply chain!

We find that the most successful executives start with their team.  I’ve yet to see happy customers with unhappy employees.  You better start there!

Each person in your business is integral to creating a resilient supply chain!  To learn more about creating a resilient team as well as the rest of your end-to-end supply chain, we are thrilled to introduce our new series, The Resilient Supply Chain: Navigating Disruption.  Achieving Peak Performance

We will be adding articles, videos, interviews/ Q&A with thought leaders and executives frequently so please save this link and join in on the discussion. We are always interested in feedback and requests.

 

 

 



The Resilient Supply Chain: Does Supplier Negotiation Work?

October 29th, 2018

In today’s Amazonian environment, it is quite clear that the customer’s experience is #1.  It doesn’t matter what issues you have.  If you cannot make sure that your product or service is delivered on-time with a value-add at a reasonable price, you will lose the business.  

The Squeeze
In talking with a group of aerospace CEOs who are being squeezed between the Tier 1/2 suppliers (those who supply Boeing and Airbus with plane ready parts) and their suppliers who are metals suppliers (mills/metals service centers) and outside processors, it is a tough position to hold!  However, just as Mirna Elnar, CEO of Acrua Spas said in our supply chain resiliency video series, there is always a solution when you think innovation.

The Win-Win
In this example, many of the suggested solutions from executives and procurement resources alike were to find opportunities to redesign/improve the product and process to achieve a “win” for the Tier 1/2 suppliers (improved manufacturability with better efficiencies and/or less scrap, less materials while maintaining specs/ performance, having the “right” inventory in the “right” place at the “right” time etc.) while also achieving a “win” for the CEO (better margins/ better cash flow) and ideally a “win” for their suppliers (more predictable demand, etc.).  A win-win-win is achievable if you look hard enough.

A Dose of Reality
This relates to a situation I found myself in while VP of Operations & Supply Chain for a mid-market manufacturer.  We found private-equity backers and were able to make cash flow by the “skin of our teeth”. We even were able to convince suppliers to take a haircut.  So far, so good. Then, oil and gas prices rose which impacted 70% of our material cost which impacted 70% of overall cost. NOT good. Also, we found that our product lines were all mixed up (which ones cost less to produce vs. the sales price for various customer segments) because we had recently merged three companies into one.  Also NOT good.

Our customers were a bit angry about service issues that arose when we cut over to a new system and merged the three businesses into one.  Also NOT good. And the largest segment of the business hadn’t updated products in years because they planned to sell and were desperate need of an upgrade to grow sales.  A fact but also NOT good. Lastly, our product is light but fluffy (which makes it larger in size) which carries a high transportation cost. NOT good either. But we had good suppliers and an innovative and committed team.  GOOD! So, how did we turn this into a “win-win-win”?

We decided to kick off a redesign project to find a way to straighten out the product tiers, improve performance of the product, reduce the cost of the product and reduce the freight cost associated with the product to boot.  A bit of a tall order? Yes, but a challenge as well!

We were successful in achieving ALL of these objectives by turning supplier negotiation on its head.  Instead of demanding price concessions, we partnered, provided upfront information on our objectives (including cost reduction objectives), collaborated on the design of new/improved materials, redesigned products and packaging, collaborated with customers to make sure we aligned with their needs and priorities, collaborated with equipment suppliers to put it all together and turned supplier negotiation into customer collaboration. 

The Result? We achieved a win for our customers, our business (and therefore our private-equity backers) as well as our suppliers.  There are too many people to thank but a quick shout out to Bill Weber, Keith White and Rick Finlayson seems appropriate.

Are you stuck in thinking about cost concessions or are you looking for the “win-win-win”?