Tag Archive: processes

Supply chain strategy: Modernization tips from Lisa Anderson

March 27th, 2020

As Published in:  Ratelinx

For business leaders looking to modernize their supply chain, the technology investment is the easy part: Evaluate solutions, calculate the ROI, make your business case, and take delivery. Sure, it can be tricky to get sign off on these tech investments, but it’s a business problem with a logical solution.

The more challenging part is preparing your organization to take full advantage of that investment. That means getting people on board, ready for the change, and developing new processes that take full advantage of the new tech.

“High tech must be accompanied with high touch,” says Lisa Anderson, supply chain consultant and President of LMA Consulting Group, Inc. “The most successful supply chain leaders will remember that people are their number one asset.”

We asked Lisa for her perspective on the current state of supply chain, the key trends that are driving change, and how you can prepare your team for what comes next. Read on to learn what she had to say.

Modernizing Your Supply Chain Strategy

The right supply chain strategy includes technological investments, process refinements, and a change management plan for your team. It should be detailed enough to act upon, but flexible enough to account for changing trends. Here’s how to get started.

Key Trends Driving Supply Chain Modernization

For most businesses, there are two factors that make modernization essential. First, there’s sustainability: Consumers are looking to buy from sustainable companies. That means companies are under pressure to not only work with sustainable suppliers, but to prove they’re doing so.

The second factor is perhaps an even bigger driver for change: The demand for near-instantaneous, free shipping for ecommerce. “In the next five years, customers will be expecting Amazon-like service levels at affordable rates, regardless of the high levels of disruption,” Lisa says. “Reshoring, near-sourcing, and sourcing reevaluation will be major concerns.”

Lisa predicts high levels of adoption for new technologies to meet these demands. “The use of technology such as artificial intelligence, IoT, predictive analytics and other technologies will enable meeting these customer needs while maximizing profit and cash flow,” she says.

 

“In these early stages, it’s important to focus in on the
most relevant data to drive decision-making. ” 

Getting Started with a Modernization Strategy

The actual nuts-and-bolts process of building a strategy is the same as solving any problem in your organization. “Start with the outcomes you’d like to achieve,” Lisa says, “then perform an assessment and gap analysis of your people, processes and technology. Assess your change management capabilities to achieve your outcomes. Finally, design the solution and build an implementation team.”

The process may be familiar, but knowing where to start can be a challenge. The first step should be getting a clear picture of your current supply chain. “Start simply and create a dashboard or availability screen that shows your supply chain status; however, remember that if you don’t pay attention to process disciplines, garbage in will result in garbage out,” says Lisa.

In these early stages, it’s important to focus in on the most relevant data to drive decision-making. But don’t try to boil the ocean: “Data plays a vital role; however, do not get sidetracked and overwhelmed with data. Start with your No. 1 priority, find directionally correct data and enable visibility,” Lisa says. “Once your team and supply chain partners understand this data, move to the second largest priority.”

Once you have your supply chain mapped out, you can start to implement solutions that will pay off in the short term and in the long run. A.I. and IoT initiatives have the potential for a quick win. Lisa says in her consulting work, she’s seeing “Artificial Intelligence and IoT used in predictive analytics and forecasting as top priorities. Getting ahead of customer demand drives significant supply chain value.”

Train and Hire the Right Skill Set

For Lisa, the human element is an often-overlooked, but crucial, part of supply chain modernization. “I’ve found that a more dramatic ROI can occur by aligning the people, even more than the data and the process,” she says.

When bringing in new talent, Lisa recommends looking for data science fundamentals. “Data analytics, the ability to leverage ERP systems and think through down-the-line impacts as well as tying business process to systems design are all part of the equation,” she says. “But we should also look at soft skill requirements, such as the ability to collaborate.” Collaboration, big-picture strategizing, and lateral thinking are all essential characteristics of a modern supply chain expert.

The ROI Potential of Supply Chain Modernization

Remodeling your supply chain is not without risks, and it’s a process that takes time and resources to ensure success. But the rewards are worth the effort. “It depends on the situation, of course,” says Lisa, “but it isn’t uncommon to see a five or 10:1 return on investment from supply chain transformation improvements.”



A Systems Checkup

February 16th, 2018

Early in the year is an appropriate time to perform a systems audit.  In fact, most clients could benefit from this at any time of the year as we often discover some significant gaps.  

As we look further, we consider this subset of the questions:

  1. Do you have clarity of your current processes? It certainly seems apparent to start here but there are many clients who would check a box less than a “B” rating.  How about you?
  2. Do your people and/or facilities perform processes in a standard way? Do you want them to do this?  Or do you encourage differentiation?  There is no right answer across-the-board here!
  3. Do you know how to utilize your ERP system to support your core processes? Do you hunt and poke around until you figure it out or is there clarity for the basic elements of the process?  Perhaps take a step back – does anyone know how to use the system to perform these processes?
  4. Do you look for opportunities to further leverage your ERP system by joining user groups, going to conferences, brainstorming with your team etc.? The vast majority of companies use 20% of an ERP system’s functionality.  Moving the needle to 30% of the best functionality for supporting your business objectives can accelerate results.
  5. How do your processes and systems interface with your customers, suppliers and other supply chain partners? If you don’t know, find out!  You might be missing a HUGE opportunity.

A regular audit of your system can uncover  types of opportunities.  When was your last checkup?



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?

 



Case Study In Increasing On Time Delivery Performance

February 14th, 2017
on time delivery

Do you have a bottleneck that is impacting service to your customers? Finding the source and fixing that bottleneck will accelerate improvement and customer service.

Situation: Our client struggled with low customer service levels since they cut back with inventory on the ‘wrong’ items during a time of tight cash flow. Of course to add fuel to the fire, the customer also wanted product to be delivered at least 20% earlier, ideally 50% earlier.

If our client didn’t find a way to respond quickly, they would risk losing key customers.

Path Forward: Upon looking at the order fulfillment flow, there were countless areas of opportunity. However, simultaneously working on these solutions would tax already-maxed out resources (who also were frustrated by angry customers) and accomplish nothing.

If everything is a priority, nothing is a priority. And, if you wait for all the details to align perfectly, you’ll start long after your key customers start looking to replace you. Instead, take a step back and do nothing except observe and take a fresh view of the people, processes and systems. Where are the vulnerabilities? Undoubtedly, each person/department will have a pet project. Eliminate all the noise and just look for the bottleneck.

Of course there could be more than one bottleneck but there will be one that is most significant. Start there. Find the source of this bottleneck and put all your resources on eliminating that bottleneck. If the bottleneck is in a particular area of your operation, the related supervisor is the most important person in the facility. If she/he needs help on a Saturday, everyone from the CEO to the line manager will find out how he/she can help. Solving these one at a time will accelerate improvement in delivery performance.

 

Did you like this article? Continue reading on how to be the Strongest Link in your organization:

Slashing Lead Times to Counter the Amazon Effect 

Is Your Supply Chain Ready for Growth?

 

 



Technical Innovation & Japan’s Bullet Train

November 17th, 2016

supply chain

While in Japan last week, I had the opportunity to ride the bullet train three times — and, even waited to go back to Tokyo from Mt. Fuji to see it whiz past since you cannot see it in action in Tokyo as a terminal station — simply amazing and FAST! The bullet train travels at over 300 kph. They always arrive on time and they are neat, organized, efficient, and safe. They account for potential earthquakes, etc.

We can certainly learn something from this engineering and service feat. And if that wasn’t enough, I learned that they have been testing a bullet train that goes 600 kph. It has been in the works for 10 years with several left to go. Innovation at its best.

technology innovation

 

One tip to implement this week:

Are you thinking about what might be needed 10 years out? Certainly, if you ask your customers, they might not be thinking about trains that go at 600 kph. Although I surprisingly couldn’t tell I was traveling at 300 kph, I wouldn’t think I needed to double it. Yet, I’m sure I’d be happy to get from point A to point B in half the time in today’s Amazon-impacted marketplace. Either way, breakthrough technology will have many uses.

In thinking about how to apply the bullet train concept this week, take a few hours out of your schedule for thinking 10+ years down-the-line. What do you think your customers might want? Bring in your top people. Assemble experts. Get ahead of the curve in thinking about the future and how your products, people, processes and culture will need to change.

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…”