Tag Archive: process improvements

Case Study in the Power of Design

February 21st, 2017
power of design

Taking a big picture view while simultaneously eyeing execution when implementing an ERP system will help companies not only achieve desired results, but do it quickly.

Situation: Our client had implemented an ERP system several years ago. As is typical when a system is implemented, they implemented the basics and then took a break to run the business. Although you start out thinking of vast improvements and how you’ll automate all sorts of processes, getting the foundation working effectively with high levels of customer service and some level of efficiency typically takes quite a lot of effort. The team is tired and needs to smooth out the day-to-day business. Understandable.

The good news is that they were set up for the future with an improved base. The bad news is that they didn’t know how to get from this new base to utilizing the improvements that would start to yield a return on investment. Their ERP partner moved on to other customers. Although they would return to work on improvements, our client wasn’t sure how to best utilize the ERP supplier’s expertise to jump to a new level of improvement. Instead, they stressed as they watched dollars fly out the window as hours passed, discussing these improvements. What could they do?

Path Forward: The key challenge is in translation between business objectives, process improvements and utilizing advanced functionality to support them. Most clients want to jump to one particular software feature (specific functionality) as the path forward that will cure all ills. In 80% of the cases, the software alone will only automate a less-than-desirable process, providing substandard results faster. Thus, the key is to find those resources in your organization or outside of your organization who can take the big picture view simultaneously with an eye to execution to figure out the best path forward, given your ideal business outcomes, your current situation (technology, process and skills-wise), technology advancements etc. Clients that pursue this path not only achieve improved results but they also achieve them rapidly.

Did you like this article? Continue reading on how to become a Systems Pragmatist:

Why ERP Success Has Little to Do With Systems

5 ERP Selection Pitfalls

 



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…”