Tag Archive: profitability

Digitization of the Supply Chain is Accelerating

August 28th, 2020

With COVID-19, the rise of e-commerce, and the pressures of profitability, Industry 4.0 and the digitization of the supply chain is accelerating. What was on track for 2030 prior to COVID-19 should be expedited to 2021 or 2022 to keep pace with needs. For example, according to the Wall Street Journal, Fed Ex is installing robots with eyes and brains that allow them to sense and respond. Smart companies are not only proceeding with technology plans but expediting them. What is happening in your industry? What should you be investing in and/or implementing to stay ahead of the curve in providing a superior customer experience profitably?

What Should We Consider and/or What Impacts Could Arise?
Undoubtedly, you should dust off your technology roadmap. Technology is never something to do simply to keep up with technology the competition is using.  Instead, think about what you need to simplify, automate and predict. Think about how to provide a superior customer experience and think about how to help your customers predict future sales and/or end customer needs. And think about how to increase profitability and efficiency. From this mindset, what technology would add value to your business?

Several clients are in desperate need of upgrading their ERP systems. Of course, it is easy to put off such a massive project and investment.  Ask yourself this question: When do you need the functionality to support your business? If you need it within the next year, you do not have time to delay! In addition, many clients need e-commerce, CRM, sales forecasting and other customer-related technologies. Do you think you have time to wait to provide extra value to your customers? I doubt it! Finally, we are also noticing that technologies that enable efficient manufacturing and supply chain operations are increasing in importance. As a result, predictive forecasting and planning systems, WMS and TMS systems and more are gaining in popularity. What makes sense for you?

Read more about these types of topics in my eBook,  Future-Proofing Manufacturing & Supply Chain Post COVID-19. Gain ideas and strategies to successfully emerging from COVID-19 and thrive in 2021. If you are interested in doing an assessment of your current situation, associated risks and opportunities and how to navigate changing conditions, please contact us.

Please share your stories, challenges, ideas and successes.



2019 Predictions Report: What to Expect and Where to Focus

March 26th, 2019

I’m thrilled to launch our 2019 Predictions Report, “Manufacturing & Supply Chain in the New Normal: 2019 Predictions from Manufacturing & Logistics Executives” discussing what to expect and where to focus.

We assembled this based on these types of questions:

  • How do we increase profitability in today’s new normal environment?
  • Do we see growth or recession? Or something in the middle? What should we do?
  • There are so many technology options with the promise to transform entire industries. Should we be pursuing? Which ones?
  • Customers expect quick delivery with changes along the way (even while intransit), excellent on-time-delivery (OTD) results and more. Where should we focus?
  • Trade wars and global sourcing – what to do?!
  • How is it trending in our industry? Are there any hot buttons, like talent?

Discussions with several manufacturing and logistics executives and experts are included in the report. Feel free to pass on this link to colleagues and friends to get a free copy of the report.

With that said, since you are already on our newsletter list, here is a direct link just for our newsletter subscribers.

Thank you to our clients and colleagues who participated with their predictions and advice! Please share your feedback. We would love to gain your insights, concerns etc. We’ll incorporate into our upcoming interview and article series.



Kaizens & the Importance of Metrics

December 20th, 2017

My colleague and I led a Kaizen workshop on metrics last week with a process manufacturing client.  It is always interesting to brainstorm which metrics are the most relevant in tracking a company’s success.  They are NOT always the same.  Companies are in different industries; they are different sizes; the profit drivers of the business are different; executives’ focus is different…..and the list goes on.   

However, every business should take a few minutes to strategize on metrics.  Do you know what you are doing AND whether the metrics you are tracking are relevant to your success?

One tip to implement this week:
As we said in kicking off the metrics Kaizen, it can be a great place to start by taking stock.  What are you tracking already?  Why?  Do you make decisions based on the metrics you track?  If not, why not?  In essence, take a pulse.  Next, it can be quite valuable to gain feedback on what should be tracked.  Have you asked the people talking with customers on a daily basis?  How about those producing and shipping to your customers?  I bet they will have something to say!  Certainly, executives always have a wish list for metrics.  Do you know which metrics are on the list?  

Although you might be tempted to jump on the long list you are likely to generate in talking with all the stakeholders in the organization, don’t do it!  Make sure to understand the impact.  Which will lead to decisions that will impact customers?  Which are likely to drive profitability?  Start with a small number.  Prioritize and start using for decision-making before you move on.

 

 



Case Study in Spotting Hidden Opportunities

February 7th, 2017
collaborate for profitability

To take a profitable path forward engage a team to spot hidden opportunities and reward the whole team for its collaborative efforts.

How could they see them? They tried getting together for retreats, sponsoring lean initiatives like kaizen events and several other promising programs but the diamonds in the rough didn’t emerge.

Path Forward: Spotting hidden opportunities is oftentimes a team effort. However, few organizations have true teams. If one member can succeed and gain a big bonus while another performs at an average level and is rewarded accordingly, you have a committee; not a team. A team will sink or swim together.

Thus, there is no reason to get together at a fancy off-site retreat. Instead, what is required is to commit to mutually agreeable objectives and look for opportunities that are best for meeting those objectives regardless of how good or bad for your individual goals. Collaborate and turn 1 + 1 into 5.

For example, if the team found great potential in an exciting new product yet the VP of Operations’ results would decline substantially for a period of time due to new product development trials, should the VP be rewarded for this weaker performance? Absolutely!

Of course, it isn’t a free ticket, and declines in performance can be estimated and tracked. Think about this — as a Board member or a corporate executive walks through the facility with the VP of Sales and mentions issues with operations, how will the VP of Sales respond? Will he/she take the easy road, agree and accept the congrats on the sales growth — or just not respond and focus attention on sales? Or will he/she defend the VP of Operations? Act in accordance with the team and results will follow.

 

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

Hidden Opportunities for Process Improvement

The Hidden Benefit of Observation 

 



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…”