Tag Archive: production

Why Inventory Will Matter Again

June 8th, 2019

I was on a bit of a trip down memory lane over the holidays as I reconnected with former colleagues from when I was VP of Operations and Supply Chain at PaperPak, an absorbent products manufacturer for healthcare and food products.  I recently talked about healthcare manufacturing with a group of powerful women (and a few brave men) at the Professional Women in Healthcare event.  When inventory arose as a hot topic, I thought about paper rolls (pictured).

Actually, inventory was a hot topic as we partnered with key customers to develop collaborative forecasting models, implement vendor managed inventory programs to dramatically reduce inventory and free up cash while improving service levels and to maximize storage and efficiencies in our operations, distribution centers and, most importantly, throughout our transportation system (since absorbent products are bulky and freight intensive).

In our view, inventory is circling back in importance and will become a hot topic again as customers expect immediate, customized deliveries with the expectation of easy returns and last-minute changes to orders in production, in the warehouse or in transit. What are you doing to get ahead of this ‘new normal’ assumption?

To throw out a few ideas to get your juices flowing:

  • Get demand further into your supply chain – what are your customers’ customers selling or using of your product?
  • Be collaborative with strange bedfellows – I’ve written several articles recently on this topic as the most successful executives see the value in finding the ‘win-win-win’
  • What talent do you have focused on having the ‘right’ inventory at the ‘right’ place at the ‘right’ time? You could double your inventory and decrease service if you don’t know how to navigate these treacherous waters.
  • How sure are you that your demand and supply (labor, skills, machine capacity, buildings/ storage capacity, cash flow) are aligned and will remain aligned (review your SIOP plans)?

This topic reminds me of one of my early articles, the Million Dollar Planner. Although that sounds insane, it might be worth thinking about conceptually. If you maximize your customer experience, profitability and cash flow, the return is frequently in excess of a million dollars. Most importantly, what could you do with an extra million dollars? Invest in new products and services to spur growth? Build your infrastructure to enable scalable growth? Build your talent base to create sustainability? The possibilities are limitless.

Contact us if you’d like to discuss further.



Supply Chain Management Is Evolving: How Will It Affect Your Enterprise?

June 12th, 2018

Operational efficiencies, productivity improvements, and cost savings are the top-three strategic advantages of cloud-based supply chain management, according to an IDG survey of senior managers and directors around the world. To gain these advantages, enterprises need to have infrastructure that helps them cost-effectively harness their large data workloads and move to the cloud easily.

In fact, the biggest challenge for most companies is figuring out how to have their on-premises infrastructure engineered in such a way that it mirrors the capabilities of the cloud. This way, when companies are ready, they can take their supply-chain data and make a seamless, fast migration to the cloud. Whether you’re a manufacturer, retailer, or large corporation, companies looking to gain real-time, complete visibility in their supply chain require integrated infrastructure with scalable data storage, processing, and computing power to get the job done.

To better uncover these benefits and how innovation and infrastructure are changing the supply chain, I spoke with Oracle and shared insights around helping businesses maximize value.

You’ve said that the customer experience continues to play a role in the transformation of supply chain management. How is it impacting both B2C and B2B industries?

We’ve all become accustomed to getting whatever we need, whenever we need it, with frequent status updates and easy returns. We’ve raised the bar. And it leads to a host of challenges for vendors, mainly in the sense that they need a wide breadth of products available to meet customer demand at any time.

Even though the vast majority of my clients are not in the retail or B2C world, they’re all impacted by this elevated experience. I was recently talking with a couple of distribution executives who said that, several years ago, there was a small percentage of deliveries that were due on the same day, if any. Now, roughly 80 percent of the orders they receive are expected on the same day. They’ve had to start working on Sundays because customers—including business customers—are expecting these extremely rapid deliveries.

There are several other ecommerce themes that are changing supply chain management. One is 24/7 accessibility: the ability to place orders and look up your order status whenever and wherever you are. Another is rapid customization. One of my clients has become number one in his industry by making sure his company provides not just rapid deliveries, but also quickly customized orders. His company does things like paint on the fly, which doesn’t normally happen in manufacturing.

What is the technology that is making this supply chain management transformation possible?

Blockchain impacts supply chain management by allowing for immediate visibility and transparency of global financial transactions—like electronic data interchange (EDI) on steroids. When products require traceability, such as if you have a recall, you can use blockchain to immediately see where your products are in the supply chain and who paid for what. That traceability can certainly be achieved within ERP software already, but if you require the next layer of complexity and immediate transparency, then blockchain technology could be useful.

Big data is another aspect of technology that is changing the supply chain landscape because companies can better tailor the customer experience when they know more about what the customer wants. IoT comes down to data, because you’re trying to attach the data together between different devices. In manufacturing, IoT shows up in preventive maintenance and anticipating when a machine might break down before it happens. When you see how different elements are working together, you can target what needs to be fixed or maintained, without just following a schedule that may or may not be addressing a real problem. This can reduce waste and improve efficiency.

But data is just as challenging as it is helpful. Before we get to work every day, we receive lots of messages between emails, texts, videos, billboards, and messages from our cars—everything is connected these days. The biggest challenge that my clients face is that they’re overwhelmed with data, but they also want and need the data to provide a better customer experience and understand what their customers really need. And they also want to figure out how to do that in a scalable and profitable way.

The challenge is how to sift through all the data that’s collected and put it all together into something meaningful and provide information at your fingertips. My clients are very interested in solutions like dashboards, and it’s a key ingredient in selecting the software; however, getting it implemented correctly is difficult.

 

It sounds like the right infrastructure that can manage multiple data sources and provide actionable insights can improve the entire supply chain process. What about the role of the ERP system in supply chain management? 

We’ve improved supply chain performance significantly by focusing a lot of effort on the demand plan. Instead of using the older perspective of a monthly forecast and whether it’s accurate as is, we’re looking at how we can do this in a more agile, flexible way. The ERP system needs predictive analytics to be able to modify a demand forecast on the fly.

Also, by using vendor-managed inventory systems, we’ve been able to reduce lead times. We’re able to meet short lead time orders that we couldn’t previously meet, with the same or slightly lower inventory levels, at a 5 percent margin improvement. It wasn’t solely due to demand planning, but that was the first step.

Once you get beyond demand planning, the next element is going to be a more agile production schedule geared to the customer—one that’s going to offer suggestions, give you notices, and be exception-based, so that you don’t have to put as much manual effort into it. The demand plan flows down into the production schedule, and then capacity analysis is the next key topic.

What steps can enterprises do to modernize their supply chain management?

We’re in the era of the customer, so start with the demand side of the equation. There are ways, regardless of what your tool set is, to improve upon your demand now and your prediction of future demand. You may not have a system in place to do this yet, but regardless, you should be doing more to look at the demand within your supply chain.

One other quick tip is to look at what information you are getting out of your system and how you can better utilize that information. I find that no matter what client I’m working with, we can always do a better job of accessing information and taking the most relevant information to make better decisions. Even if your system isn’t yet modernized to the point of predictive analytics, you want to move in that direction. You can do this by just getting information from multiple sources and creating a simplified database.

What will supply chain management look like in five years or 10 years from now, and what technology can help take enterprises there?

We’re going to continue seeing the ecommerce effect: the importance of speed, responsiveness, and agility, and the rise of smaller, more frequent orders. All of my clients are interested in managing their vast supply chain networks with lower costs, but better service. They’re trying to find technology to support these goals and figure out how to automate using AI and data.

One ideal future is with 3D printing, because you can print what you need, where you need it, when you need it, and further extend your supply chain. Even then, distribution is going to have costs associated with it, and the last mile will continue to be one of the biggest challenges. Delivering all these smaller, more frequent orders to both consumers and businesses impacts transportation negatively and your distribution network significantly. You need your inventory strategically located closer to a customer, or to have flexible manufacturing capabilities that can respond quickly to demand. The system comes into the picture when you want to set up your network to have what you need, where you need it. How to improve delivery metrics will continue to be a key consideration in the future.

If we can reduce the cost to manufacture and distribute inventory by leveraging supply chain management tools, we can reduce prices and actually do something as radical as bringing more manufacturing back to the U.S.

Take a Deeper Dive…

Supply chain management professionals are eager for new ways to leverage data to drive business value. It is important to understand, however, that successfully using big data requires the right infrastructure designed to manage multiple data sources and provide the computing power to deliver actionable insights across the entire supply chain process. The key to gaining business value from supply chain data is by using big data infrastructure that can acquire, store, process, and analyze huge amounts of data workloads for supply chain insights.

 



Manufacturing Expands at Fastest Rate Since 2010

February 15th, 2017

According to the Institute for Supply Management’s Manufacturing Purchasing Managers’ Index, manufacturing is on an upswing. The composite index rose in January, making it the fifth straight monthly expansion. New orders and production grew strongly! And the Dallas Federal Reserve Bank reported that manufacturing activity expanded at its fastest pace since April 2010 — more importantly, leaders are positive about the next six months. In fact, the forward-looking outlook measure jumped to a level not seen in 12 years! Are you ready?

manufacturing growth

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

Although this is great news for manufacturing, we should make sure we are prepared for success. Do we have the capacity and staffing to meet our customer requirements? Do we have the skills and talent to grow successfully? And, are we building agility and flexibility into our systems? According to my recent outsourcing research, 70% of executives are considering near-sourcing and in-sourcing strategies. Thus, I expect these numbers to continue to grow.

Many of my clients struggle to find, retain and train talent. Thus, I have dusted off my Skills Gap research from late 2013 and am refreshing it. I’d appreciate your feedback and insights for my research. I’ll keep you in the loop on the results.

In the interim, start thinking about the skills gap. Are you partnering with community colleges? Trade associations like APICS? Other local companies? Even competitors? Consider involving top notch executive recruiters, partnering with temporary agencies and supplementing with consultants and contractors. Success will come to those companies ready to serve the customer when the customer wants it! We cannot afford to delay.

 



Staples & the Power of Customer Service

August 11th, 2016

supply chain

When I’ve needed customer service the most, Staples has been there! A while back, my house burned down. When that happened, the manager of the local Staples went WAY out of her way to help dig up old invoices to assist with the arduous accounting process. However, the reason I’m thinking about Staples now is because they came to my rescue again.

Last weekend, I attended the APICS district meeting in Newport Beach. After Friday’s Presidents meeting, I went to dinner with two colleagues. I left my laptop sitting on the desk in the hotel, knowing I had to write a proposal upon my return. When I got back to the room, my laptop was DEAD. I tried all sorts of things to make it work, looked up solutions on my phone, etc. It was hopeless. Thus, instead of writing a proposal, I was searching on my phone for a new laptop and sending emails to IT support resources to try to get help. Of course, my laptop would crash on Friday night with no provocation.

I have to say, several of my IT trusted advisors responded Saturday morning (nice to work with the best!); however, I couldn’t do much more until Monday. I planned to miss a session on Saturday to find a Best Buy. I looked out the window in the morning and saw Staples.

The tech guy at Staples (who was also an Assistant Manager but he came to help because the regular tech guy was tied up) was EXTREMELY helpful and tried all sorts of things to get my laptop working. He went over and beyond and made me feel much better. Although he couldn’t fix it while there, he set me up with the right hardware and people to save my data and work next steps. And he charged me $0. I left with a broken laptop — and happy.

After the meeting, I stopped at the Ontario Staples on the way home to pick up an interim laptop I purchased. Unfortunately, it turned out, it was in Ontario, Oregon; not Ontario, CA, but they were so helpful and made sure the LaVerne store was prepared for my arrival the next day that I felt good about my experience anyway. They even offered me free items for my trouble. Next, the LaVerne tech guy actually found the magic formula (that no one thought existed) and got my laptop working — same day, on a Sunday. More than the laptop help, they shined when it came to customer service. I will be back!

One tip to implement this week:

None of these folks were technically in customer service yet I will return to Staples because of their customer service. They were exceptional. They made me believe that my laptop troubles and helping me with my problem was their most important item of the day. Do you make your customers feel that way?

If you are in customer service, sales or an executive, you are on the front lines with your customers. Believe me, they always have a choice. Customer service will help you stand out from the crowd.

If you are in any other support position, you still have customers. For example, if you are in production, you probably have shipping and warehousing as your customers. If you are in production planning, customer service, operations and accounting are your customers. Everyone has customers. Do they want to work with you? This is certainly something where you can make an immediate impact. Think of how you want to be treated. What would stand out for you? Pass on the goodwill.

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…”



Observation

February 4th, 2016
observation

Make a conscious effort everyday to stop what you’re doing and look around your workplace and beyond. By becoming observant you’ll soon spot people and areas that need your attention.

 

It is worth it to take a step back on a daily basis, if not more frequently, to observe. There is a significant power in observation – for your business, your career and your life.

Although observation sounds easy, it isn’t nearly as easy in reality.  A few strategies for success include:

  • Start off your day by looking out the window – what do you see? It can go a long way to clear your mind and just observe.
  • As you walk around your workplace, keep an eye out for what others might “step over” – a classic example of this is trash on the production floor. Instead of walking over it (and not noticing it), pick it up. This sounds really simple but can go a long way. Train yourself to “see” what is around you. Do you see oil on the floor? Do you see orders that could be missed?
  • Watch for trends – assuming you see the same people each day, watch for noteworthy changes. Is someone who is always happy down one day? The same holds true for machines, products, etc. If the production line always runs in a certain way and it is slightly different one day, take note. Find out what is going on so you can avoid larger problems down-the-line.
  • Take a step back and “look” at your supply chain – how are your customers, suppliers and other partners? Are there any trends going on?
  • “See” your team – whether they report to you, they are peers or they are your superiors, pay attention. 80% of success boils down to people so please pay attention to people!

Getting used to observing can be more challenging than it sounds. I often drive by countless people, cars, situations, etc. that I don’t notice.  Practice observing so that you don’t drive by your career, business or life.

Did you like this article? Continue reading on how to strengthen your Eagle Eye:

Manufacturing Connector℠ Eagle Eye Requires Keen Observation, Focus

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