Tag Archive: predictive analytics

What’s Going on in the Food Industry?

July 13th, 2020

After receiving a call from a CBS affiliate asking about what’s going on in the food industry, we thought it would make for an interesting deep dive. In addition, we have been working with companies from farm to table and from machinery equipment to logistics/food service distribution and grocery.  The coronavirus impacts have been vastly different. Whether you are related to food and beverage or not, you undoubtedly have some sort of connection or impact throughout your end-to-end supply chain. At a minimum, the concepts are the same, so take note.

Are you supporting grocery or hospitality?
The answer provides a night versus day response. Of course, grocery saw the largest increase in history early on during the coronavirus lockdown. People hoarded groceries, consumption increased (after all, virtually all consumption occurred at home), and manufacturers and distributors couldn’t keep up. Grocery sales saw an unprecedented uptick early on during COVID-19.  It has leveled out to be a slight increase. Due to a surge in coronavirus cases at meat packing plants, there was a lot of concern about a shortage of meat but it didn’t materialize in any substantial way.

On the other hand, companies that supply hospitality and restaurants saw a dramatic drop. One of my supply chain colleagues went to her local restaurant and brokered a deal for what she couldn’t find at the grocery store. Supply chains were completely out of whack. Channels weren’t agile, packaging was different and demand and supply were completely out of alignment! Clients and colleagues that served restaurants and the hospitality industry saw volumes go to 0 overnight. Let’s hope they had a diversified customer base. However, even if completely dependent on hospitality, the agile and proactive quickly turned left and found new opportunities.

Is Your Customer Base Diversified?
Customers with a diversified customer base have fared better than the rest. For example, our clients supported each of these types of customers:

  1. Grocery – Clearly, this segment was largely up
  2. Big box stores – Again, these stores at least kept operating. Volumes were down slightly but carried on.
  3. E-commerce – The one unanimous HOT SPOT across the board.
  4. Healthcare – Definitely down. No one was going to the doctor or saw medical professionals unless they had COVID-19
  5. Weight & body building – Again, down since no one was going to the gym.
  6. Starbucks & fast food – At first, these were down but they quickly recovered, depending on the product sold. For example, if it was a food product consumed in the store (not typically in the drive through), sales dropped.
  7. Restaurants & hospitality – DOWN, DOWN, DOWN

The Misalignment of Demand & Supply
By NO means could our clients assume their customers’ history would be a good indication of the future. In fact, in many cases, their customer supplied radically different customers.  So, it was really the customer’s customer that had to be understood. Getting in touch with our extended supply chain to better understand demand was a good start. Staying on top of changing and evolving needs was critical. Extending help to customers went a long way. The bottom line is to get on top of demand to the best degree feasible.

Of course, the supply base is experiencing the same level of unprecedented volatility. Thus, getting on top of supply is also essential. All-in-all, getting on top of demand and supply and continually re-aligning, readjusting, and addressing gaps (retooling, creating partnerships, repackaging and other innovations) minimized the level of supply chain shortages.

What is the Status of the Food Industry?
Supply chains are more local and somewhat resilient which helped clients adjust more quickly to the changing conditions. Also, several clients reduced the number of variations offered to better manage the process and/or to address a supply issue proactively. It seems to have been a successful approach. The bottom line is that there weren’t noteworthy shortages beyond the first few weeks of panic buying.

What Should We Do?
Smart and innovative clients are thinking ahead and taking the opportunity to evaluate..

  1. Customer preferences: Think about changing customer preferences and consumer buying behaviors to develop and/or adjust products and services to meet evolving customer needs and to fill gaps.
  2. Technology: Implement key technologies to better support improved operational efficiencies and a superior customer experience.
  3. Predictive Analytics: Design and build analytical models and dashboards to use understand how to better predict customer behavior and manage operational cost. Business intelligence, predictive analytics and artificial intelligence/ machine learning is offering great promise.

Interestingly, although this feedback was geared to food and beverage, the same types of situations were prevalent in other industries as well. In aerospace and defense, commercial aerospace took a nose dive while defense stayed constant. In building products, if your products supported at home improvement projects, demand was up whereas commercial real estate for retail is in sorry shape. In healthcare, if you are in PPE, you cannot keep up.  Whereas if you are in any field not directly related to coronavirus (such as elective surgery, cancer or a primary physician), you were twiddling your thumbs.

Who are your customers? Are you diversified? What risks exist? Evaluate your extended supply chain and future-proof your manufacturing operations and end-to-end supply chain. Check out our eBook and contact us if you’d like to brainstorm these concepts further.

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The Strongest Link in Your Supply Chain

Future-Proofing Manufacturing & Supply Chain Post COVID-19



Future-proofing Your Supply Chain

February 21st, 2020

Disruptions abound in supply chain circles. Just consider any of the following recent events: the tariff war, global unrest, the Coronavirus, natural disasters such as the volcano in the Philippines, the Hong Kong protests and more.

We have never had a client that could claim that 100% of the extended supply chain (from suppliers’ suppliers to customers’ customers) was inside the U.S. So, we have to be prepared to navigate these types of disruptions and the related impacts.

Disruptions certainly go beyond your physical supply chain. What about your human capital, technologies (accompanied with processes) and strategies? Refer to our article on future-proofing your skills gap and assess which risks might be on the horizon in your industry.

When it comes to technologies, there is no doubt that emerging technologies are gaining steam and are starting to transform supply chains. Just consider the application of collaborative robots, automation, RPA (robotic process automation), artificial intelligence, IoT, blockchain, and predictive analytics to name a few. Big name companies are dropping big dollars into these technologies. When thinking about strategy, remember strategy is no longer a multi-year exercise. We must be thinking in terms of strategic sprints. Who knows what will happen beyond a year out!

Several high-level categories should be assessed as you think about your supply chain:

  1. Sourcing – Are you sourcing from China? Is this a viable path forward to source 100% from China? There are increased risk factors to consider. Listen to an interview I conducted with John Tulac, international business attorney, on future-proofing and doing business with China. It is time to reevaluate your supply chain footprint.
  2. Logistics – There are significant disruptors transforming this industry, ranging from e-commerce and the the Omni-channel to robotics, additive manufacturing and the digitization of the supply chain. If you aren’t incorporating these impacts in future-proofing your supply chain, you will be left in the dust. These are concepts of focus for the consortium for logistics success in the Inland Empire to enable companies to stay informed and keep up with the fast pace of change.
  3. Manufacturing – Industry 4.0 is transforming manufacturing and changing the landscape. It will be a pivotal year that separates the winners vs the losers as advances are made. See what the National Association of Manufacturers’ Leadership Council sees as critical issues
  4. Demand & Supply – There is no doubt, there is a keen interest by business owners, executives and private equity leaders on creating predictable demand and forecasting sales. The more we understand our demand plan, the better our operational performance, supplier performance and customer performance. Read about SIOP (sales, inventory, operations planning) and how it can help future-proof this area.
  5. Inventory – As the disruptions abound and executives fear a slow-down, the proactive management of inventory and advanced collaborative programs are gaining in relevance. Pick up some tips and strategies in our recent article ” Inventory Management as Fashionable as Automated Intelligence for Distributors” for ACHR News.
  6. Metrics & Predictive analytics – Keeping a pulse on performance should remain a top priority while forecasting what will be needed.

Getting ahead of the curve might be the only avenue to success. Consider creating a resilient supply chain and future-proofing your supply chain. Stay tuned and read more about it, and If you are interested in discussing a supply chain assessment, please contact us.

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Made in Vietnam

Forget About Reducing Inventory; Perhaps You Have the Wrong Supply Chain Strategy



Food & Beverage and Future Proofing Your Business

November 27th, 2019

As I have been thinking about the food and beverage industry (and process manufacturing) and future proofing your business, I see several examples of proactive clients and colleagues future proofing their business.

As this is my latest, hot-off-the-press LMA-i, LMA Intelligence topic, I thought we’d explore a few trends related to food and beverage.

First, the industry as a whole does provide some level of future proofing because it is more recession proof than other industries. After all, we all need to continue to eat!

Next, since I talked to several attendees of the PMA’s (Produce Marketing Association) Fresh Summit, I was intrigued with the level of technology and complexity. For example, one apple expert (spanning multiple tiers in the supply chain) was keeping up with an incredible amount of detail with crops in a database as it was integral to the view 9-12 months into the future and how he could navigate for success. In essence, he was using predictive analytics to position his company for success in his specialty area. He also mentioned keeping up with technology to evaluate trade-offs to handle the skills gap, costs and more. He was keenly focused on future proofing his extended supply chain. Are you?

Technology and sustainability continue to pop up when looking at future proofing. For example, according to PMA CEO Cathy Burns, the top 5 trends include conscious capitalism, a focus on emotional health and megatrends shaping the industry (which both link back to produce and floral), and how corporate sustainability and technology matter.  Also, certainly all of the largest food and beverage companies are exploring the ‘right’ technology and systems upgrades to improve performance. They know that in order to future proof their business, they have to lead the pack with technology that will return value to their customers, investors and employees. And NONE of these higher level concepts are unique to food and beverage!

What Should We Consider and/or What Impacts Could Arise?
First, how are you up-to-speed on what is happening in your industry, technology impacting your industry and what you need to do to successfully future proof your company? If you don’t have a plan that is part of your daily, weekly or monthly business cycle, you better re-think your plan!

Next, are you trying to navigate on your own? You certainly are less likely to succeed. I also talked with additional experts who had a clear strategy of partnership and collaboration to maximize impact and minimize risk. Of course, you must choose wisely. Similar to a ‘bad spouse’, a bad partner is definitely worse than no partner at all. Yet, I’m seeing more executives realize that as much as they require more control and even vertical integration to control the customer experience and associated costs, they also need to find ways to make 1+1 = 22.

In today’s Amazon-impacted marketplace, the fast prevail. How can you leverage your extended supply chain and network for exponential success?

And, of course, a big part of future proofing your business goes back to creating resilience. Check out our many articles with ideas to create a resilient supply chain on our blog. Why not pick 2 or 3 ideas and run by your trusted advisors and collaboration partners…

 



Manufacturing Expert, Lisa Anderson, Sees Impacts of Artificial Intelligence on Manufacturing Profit, Inventory Levels and Cash

September 20th, 2019

Manufacturing Expert, Lisa Anderson, Sees Impacts of
Artificial Intelligence on Manufacturing Profit, Inventory Levels and Cash

CLAREMONT, CALIFORNIA – September 19, 2019 –  Manufacturing and Supply Chain Expert,  Lisa Anderson, MBA, CSCP, CLTD, president of LMA Consulting Group Inc., predicts that artificial intelligence (AI) and human learning will impact most aspects of manufacturing resulting in improved profits, inventory levels and cash.

“Our manufacturing clients have really embraced the power of AI since the first of the year.  From improved forecast accuracy impacting inventory levels to more openly working with changing customer needs and the overall customer experience, manufacturers are seeing the effects of using this data,” Ms. Anderson commented. LMA Consulting Group works with manufacturers and distributors on strategy and end-to-end supply chain transformation to maximize the customer experience and enable profitable, scalable, dramatic business growth.

“Despite the fact that manufacturing, especially in Inland Southern California continues to be strong, manufacturers need to be smart. By integrating AI with tried and true techniques such as SIOP (Sales, Inventory and Operations Planning) and taking advantage of predictive analytics and other human learning technologies in conjunction with ERP systems, manufacturers can become better at forecasting and exceeding customer expectations.  In fact, for every one percent improvement in forecast accuracy, there can be a seven percent improvement in inventory levels and therefore cashflow,” she said.

In an effort to support clients, Ms. Anderson is active with the Board of Directors of the Inland Empire Economic Partnership, where she represents the Logistics Council whose initiative is developing a consortium for logistics, supply chain and advanced manufacturing success. “AI and other forms of technology are transforming manufacturing as we know it. From reevaluating sourcing and enabling robots to predictive maintenance and shortened design times, AI offers up vast potential. Successful manufacturers are strengthening their hold. Supply chain and other manufacturing professionals are sharpening their skills to take advantage of these resources. It takes work, smart management and a strong team to be successful. A perfect storm for manufacturing success. The evidence is in the growth we see in Inland Southern California (also known as the Inland Empire),” she concluded.

About LMA Consulting Group – Lisa Anderson, MBA, CSCP, CLTD

Lisa Anderson is the founder and president of LMA Consulting Group, Inc., a consulting firm that specializes in manufacturing strategy and end-to-end supply chain transformation.  She focuses on maximizing the customer experience and enabling profitable, scalable, dramatic business growth. Ms. Anderson is a recognized Supply Chain thought leader by SelectHub, named a Top 40 B2B Tech Influencer by arketi group, 50 ERP Influencer by Washington-Frank, a top 46 most influential in Supply Chain by SAP and named a top woman influencer by Solutions Review. She recently published, I’ve Been Thinking, 101 strategies for creating bold customer promises and profits. A regular content contributor on topics including a superior customer experience with SIOP, advancing innovation and making the supply chain resilient, Ms. Anderson is regularly interviewed and quoted by publications such as Industry Week, tED magazine and the Wall Street Journal.  For information, to sign up for her Profit Through PeopleTM Newsletter or for a copy of her book, visit LMA-ConsultingGroup.com.
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Media Contact
Kathleen McEntee | Kathleen McEntee & Associates, Ltd. | p. (760) 262 – 4080 | KMcEntee@KMcEnteeAssoc.com   
                                                        



Top Technologies for 2018

January 5th, 2018

vendor managed inventory

 

Technology Creating Business Value
We have never been believers in technology for technology’s sake – or, worse yet, FADS. However, there are some top technologies to keep an eye on in 2018 if you plan to create business value.  Not only are my most successful and progressive clients thinking about these technologies, but they are investing to leapfrog the competition.

What to Watch

  1. Artificial intelligence (AI)- Who can argue with the potential power of this technology?  It is saying something when my mom said her Amazon Alexa was the best gift she ever received (even though she only uses the alarm functionality).  Imagine how AI might transform entire industries (such as accounting) and functions (machinery and equipment maintenance).

  2. Blockchain – Although still in early stages, blockchain has the potential to transform high stakes transactions using a shared, secured, synchronized and immutable ledger.   

  3. IoT (the Internet of Things) – In today’s interconnected world, you cannot get away from connected devices.  We take them for granted.  The ultimate (which seems to be viable by 2020) is self-driving trucks.  Imagine the connections required to turn this concept into a reality. Yet, testing is already underway – and quite successful.  

  4. Predictive Analytics There is immense power in not only sifting through mounds of data rapidly and efficiently to pick out the trends and highlights, but taking that a step forward with predictive analytics is a game-changer.  Are you thinking about how to integrate predictive analytics into your decision-making processes?

  5. ERP and CRM Although tried and true, these “must have” technologies are no longer advantages. If you are interested in profitable, scalable growth, you’ll put these two topics on your strategic priority list.  

Your Edge
Customers expect you to be ahead of them, are you?