Tag Archive: operations

The Resilient Supply Chain: Do You Have Vendors or Partners?

December 1st, 2018

Since we did research on “The Squeeze” for a speech on the the squeeze in aerosapce (meaning:  how does the supplier in the middle between the Tier 1 suppliers who supply final assembly parts for an airplane and the powerhouse mills survive, or preferably thrive), we have been thinking a lot about the supplier relationship.  Coincidently, we also heard a lot on this topic at the Association for Supply Chain Management (ASCM/APICS) international conference as it is a hot topic across all industries. There was an almost identical discussion occurring with retail and the consumer goods industry. Last but not least, all of our clients are seeing the relevance of this topic.

What is the “right” answer?  Of course, it depends!
To manage “the squeeze”, one of the keys is to create partnerships with your key suppliers.  The rest can be vendors since they are not core or significant to your success. However, your key suppliers must be partners and collaborators.  For example, one of the best ways to handle the middle position in the aerospace world is to bring your customers and their demand together with your suppliers and their capabilities.  

Here are a few ideas that all depend on being a partner:

  • Collaborate with suppliers on new ideas/design concepts to reduce materials and waste for you AND up your supply chain.
  • Become a partner of your customer and gain access to demand information as it becomes available and help translate that into a benefit for your customer, you and your supplier.
  • Leverage pricing and volume across the supply chain for a win-win-win.

Although these ideas relate to aerospace, the same concept applies with every client.  When I was VP of Operations and Supply Chain for an absorbent products manufacturer, we used these same concepts to find win-win-win solutions in your supply chain.  We partnered with key vendors to redesign materials (that performed better at a lower cost), redesign packaging, reduce waste in our manufacturing process which required teaks and collaboration with both material and equipment suppliers and more.  By following a partnership route instead of the “vendor” negotiation/beat up on price route, we turned our situation around from bad to good.

We found private equity backers who wanted profitable growth.  However, soon after, the market changed and oil and gas prices were continually rising which significantly impacted our material costs (and were unavoidable) while our private equity investors still expected the same profit improvements as before.  Our business was also heavy in transportation cost since the product was bulky which was also an issue with rising oil and gas prices. Thus, we collaborated with customers, material suppliers and freight suppliers for win-win-win solutions. It “worked” and we were able to offset the price increases while growing the business in a profitable and scalable way.

These types of situations are common in today’s business environment.  

Do you view your suppliers as vendors or partners? And who are you hiring to manage these relationships?  Transaction-oriented purchasing folks or strategic relationship procurement resources?

 



Should We Care If Women Are on Boards?

October 15th, 2018

Last week, I attended a special event about “Women on Boards”, and it was quite interesting to listen to three successful women and Board members.  Betsy Berkhemer-Credaire, CEO of 2020 Women on Boards National Campaign led the discussion, and Jan Buchan, former CEO of PAAMCO and Julie Hill, Anthem Board member were panelists.  What I found most interesting is that the board topics were the same that I hear from men yet their experiences were quite different.   

It was interesting to hear their stories as it reminded me of attending Board meetings as a VP of Operations and Supply Chain with our private equity backers.  I was typically the only woman.  I’ll never forget when one of my Directors pointed that out to me.  I didn’t notice it until he did. The conversation also reminded me of a speech by Maureen Berkner Boyt about female leaders.  I thought Maureen made a compelling argument that related to bottom line results.

In essence, there is a shortage of talent, especially as the baby boomers retire.  The companies that embrace female leaders will be more successful.  She cited statistics – female leadership leads to 22% less turnover (which is a BIG bottom line impact), 66% better return on invested capital (with 3 female Directors), 42% return on sales, 2% more cash and more.  Now that is quite compelling and worth paying attention!

When I joined my global consulting strategy group, our leader thought I would add to the group with my diversity. I thought it was just something he said at the time but I have found it to be true.  We have had other women come and go.  All have added a unique view.  I have come to appreciate that our insights can be somewhat different from the norm and can turn 2+2 into 16.

Are you thinking about attracting – and keeping – strong female leaders and potentially adding them to your Board?  You don’t have to take away men to incorporate this idea. Why not add a strong female Board member?

One tip to implement this week:
With that said, you don’t have to start by thinking about adding women to your Board.  Perhaps just start at the beginning. Do you think you’ll gain value with different viewpoints and ideas?  It might stir the pot – which can cause some challenges.  Yet, it can also take you to a new level of performance.  If you think you’ll give it a chance, it makes a lot of sense to start at square one.

Can you attract women to your organization and KEEP them?  Are you able to provide them with career paths that will be interesting? If not, we better start there. Do you have mentors? How can you change the culture to support this initiative?

I’ve found that simplicity “works”.  Why not ask them what would be attractive?  Talk to your best performers and find out what would compel them to stay and grow with your organization.  It isn’t rocket science.  Yet, it isn’t easy to implement. If it were, everyone would just “check that box”. You can’t go wrong by giving it some thought.  Worst case, results are likely to increase.

 



Buried in Data. Dig Your Way Out & Leverage for Success

June 7th, 2018

90% of the world’s data has been created in the last two years. Mind boggling!  Of course, we are getting buried in data and aren’t sure how to dig our way out and leverage for success.

If you just think about your first few hours after waking up in the morning, you’ve received millions of messages and data:  1) News reports from the radio. 2) Text messages and emails on your phone. 3) Most likely you’ve driven by billboard messages on your way to work.  4) The TV might have been on in the background while getting ready for work. 5) People are calling on the phone. 6) Nightly reports arrived in your inbox.  7) Customer orders came in overnight. 8) Your machines have provided data on breakdowns, waste etc. 9) And more….

How can we dig our way out of all this data?  As with almost everything in business, the key is which data to prioritize.  

Have you thought about the strategic use of data?

Here is a short video of me answering a question on the strategic use of data at an Amazon Effect panel at the Manufacturers Summit:

A few insights into digging your way out of data:

  1. Leverage Technology – Don’t manually try to dig your way out of data.  After all, if 80% of the world’s data has been created in two years, there is no hope to dig yourself out byte by byte.  Employ the appropriate use of technology to synthesize data.
  2.  Remember: Garbage in, Garbage out – Just because you put a fancy collection system in place does not mean you are collecting valuable data.  Perhaps you are just collecting garbage. Develop processes to quickly assess the gems from the junk.
  3. Directionally Correct – We are known for using this phrase because we find it is core to success especially when it comes to data.  Don’t even think about making sense of every byte. Gain a directionally correct conclusion and make progress.
  4. Slice and Dice– Data alone is “too much”.  Set your data up so that you can slice and dice the data to dig into what is meaningful for your business.  For example, if you plan to grow in the northeast by 25%, start with the sales growth figure. Then, view it by state or customer. Check the largest increases and decreases in more detail – are there certain customers or items that are over or under performing?
  5.  Take the Bird’s Eye View – We cannot tell you how many clients end up with a great-looking report that doesn’t “add up” – not necessarily in the literal sense but in whether the information makes sense in conjunction with other indicators.  Take a step back and ask questions to make sure it “adds up”.

Our most successful clients pay attention to data.  A few years ago, an award-winning company asked us to help with a SIOP (sales and operations planning process) and an ERP selection process.  They were fanatics when it came to analyzing sales data. It certainly seemed to correlate to part of their success. If you need help thinking through your data strategy, contact us.

 

 



Is Your Supply Chain Ready for Growth?

December 9th, 2017

Recently, we worked with a large, complex organization to provide an external assessment of the supply chain organization and how well it was prepared to support scalable growth.  It reminded us of the value of taking an outside view every now and then.  Whether you take yourself outside of your organization, hire a consultant or ask an executive from another division or trusted customer to take a deep dive into your organization, you’ll likely wind up with a few ideas – or, at a minimum, a confirmation that your i’s are dotted and t’s are crossed and ready for growth.

Growth has many challenges
It is MUCH easier to downsize than it is to grow successfully.  NOT more pleasant but it is simpler to cut back.  Unfortunately, we are all too familiar with this exercise.  Yet growth has many of the same challenges:

Cash is a constant challenge – by virtue of growing rapidly, you spend money in advance of shipping and receiving payment.  The quicker you grow, the tougher it can be without a line of credit especially for a smaller organization.

  • Are your people ready for growth?  What “used to work” might no longer be sufficient.  Have you prepared for these needs?
  • Can your operations keep up?  Do you have the resources, equipment, and support resources?
  • Suppliers are likely to be ill prepared unless they are in lock step with your growth plans.  Regardless of the preparedness of your team, nothing will occur unless your supply chain is aligned.
  • If caught by surprise, you can certainly throw resources at the issue but to achieve scalable growth, you should have thought about your processes, systems, metrics and more.  For example, determining that you’ve outgrown your ERP system as you “hit the wall” is too late.  It will take time to select the best system for your needs AND it will take between 6 months to 18 months to implement, depending on your size, complexity, ERP partner, scope etc.

Growth is a hot topic.  For example, according to our recent Supply Chain Briefing, McKinsey predicts 20% manufacturing growth by 2025.  However, regardless of your industry, if your company isn’t growing, it is dying.  We have NEVER seen an organization “stand still” and “maintain” successfully.  Have you?  Thus, growth is core to success.  

Plan or After-Thought
The key is whether it is a plan or an after-thought.  Which is it for you and your organization?

 



What is Walmart Doing?

October 5th, 2017

I sat on a panel of experts for Mobility 21’s annual conference titled “Speed to Delivery: Good’s Movement’s High-Tech Future“, addressing the future of transportation. It was a fascinating meeting and panel discussion due to the amazing amount of technology being discussed – and one of the panelists was the Senior Director of Sustainability for Walmart.

Walmart’s focus on speed and the customer is paramount.

Driving the Future of Transportation.

Walmart has come up in several circles lately. One of our clients supports Walmart’s stores, and so we learned quite a lot about their fulfillment processes, demand planning practices and, of course, their new OTIF (on-time-in-full) metrics. We also discussed Walmart service with a 3PL partner, and how Walmart has been making headlines lately in the e-commerce race. It is worth paying attention. Here are a few of the highlights:

  1. The focus on the customer is paramount.
  2. The use of crowd sourcing is gaining steam with the use of Uber and Lyft to deliver from the store.
  3. Who knew but Walmart is testing deliveries with drones as well!
  4. Walmart associates are making deliveries on their way home which is possible with the software that can align deliveries with routes.
  5. They just announced a partnership with August Home Smart Lock to deliver when the customer isn’t at home – and even put groceries in the refrigerator.

It is always a good idea to stay up-to-speed with what the leaders are doing in the industry. Their ideas are not always the ones to follow but they are ALWAYS ones to ponder for application, impact and down-the-line trends. Who do you follow?

 

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

Walmart Raising the Supply Chain Metrics Bar 

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