Tag Archive: results

Is Demand Planning/ Sales Forecasting Hype or Valuable?

September 9th, 2019

According to Gartner statistics,significant bottom line results can occur with just a 1% improvement in forecast accuracy. In fact, there are staggering improvements in lead time, inventory reduction and margins, so why not at least explore the idea? There are lots of worries expressed by clients and contacts:

  • We cannot predict what our customers will order!
  • Customers don’t even know what they will order! (And, in seeing these ordering patterns, I concur that this is often-times an accurate statement.)
  • Since we are using lean, our lean consultant told us we no longer need forecasts.
  • We are a small company and don’t have resources to focus on forecasting
  • And my favorite, “Why in the world would our significant sales team listen to you?”

I just have one question, if depending on the industry and study, a 1% improvement can lead to a 2.7% to 7% improvement in cash flow and minimally a few percentage points cost improvement in key categories such as freight, wouldn’t you be remiss if you didn’t consider your forecasting process? Of course you would be!

We have yet to run across a client that couldn’t improve the forecast, no matter how daunting the task seemed. Since the outcomes are substantial, it was worth the effort.  And, the effort was typically minimal compared to aligning the people on the forecast.

A few tricks of the trade in driving results with forecasting:

  1. Let your tool (whether Excel or a sophisticated system) do the work for you – From an 80/20 standpoint, there is no doubt that a simple tool will perform far better than even your best person. Develop your base.
  2. Focus on exceptions – On the other hand, your team is best equipped to provide insights and feedback on exceptions. Use their strengths.
  3. Drive results, not blame – Remember, the definition of a forecast is that it will be inaccurate. I’ve yet to run into a client with a perfect forecast. With that said, the three most impressive were across the board – a $100 million dollar facility of a multi-billion dollar aerospace organization with a manually generated forecast, a close to billion dollar consumer products company with a home grown system and smart people, and a rapidly growing <$10 million dollar manufacturer with an Excel-based system with smart, agile and process-oriented people. None of these folks ran around blaming anyone with forecast inaccuracy yet they all outperformed their competitors.

Perhaps it’s time to take a second look at your sales forecasting process. Who is responsible? How does it work? You never know what you’ll discover as you shine a flashlight on the process. If you’d like to discuss forecasting and demand planning further, contact us.

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LMA’s 2018 Advocate Award and Recognition

August 25th, 2018

On the 10 year anniversary of my business, I recognized 10 people for 10 years as LMA Advocates – people who have gone over and beyond, resulting in LMA Consulting’s growth and success.  I truly appreciate their support, expertise, ideas and feedback. I would not be here today without them – and certainly not leading a growing and leading edge consulting practice that partners with manufacturers and supply chain organizations to create BOLD customer promises and profits.  

Ever since my 10-year bash, I’ve recognized one person each year on the anniversary of LMA Consulting.  Recently, on my 13-year anniversary, I announced Kelly Ford as our 2018 LMA Advocate.

 

Kelly Ford and I have worked together at three separate aerospace organizations and at least double or triple that in terms of projects. We have achieved significant results together (improved customer service levels to support business growth, expanded capacity and efficiencies, and right-sized inventory levels to maximize the use of cash and capital), and, most importantly, she orchestrated it so that we achieved these results while valuing and engaging people.

I find Kelly a pleasure.  It is not often that I find a client who is interested in continual improvement, is willing to try new ideas and stick with them as the inevitable obstacles arise and is so well-respected by her team. (So much so, that everyone pulls together to “make it happen” and has fun during the process.)  

One tip to implement this week:
Are you recognizing people who have been instrumental in your company’s growth and success?  Don’t think about this only in terms of direct relationships. For example, don’t just recognize the sales person who bagged the elephant. Instead, think about each person’s contribution to growth and success. Is there someone who is invisible working in the background (perhaps taken for granted) who makes it happen on a daily basis?

Also, don’t just think about sales and revenue growth. Although revenue is clearly relevant, expand your viewpoint – is there someone who “passes the ball” to your sales team?  Most likely – yes! Who has the best pass percentages? Since I went to UNC Chapel Hill (Tar Heels), I have become accustomed to winning at basketball. Solid players that pass are invaluable to the team.

Find the gems in your organization and recognize them.  Thank them in front of their peers. Tailor their ‘award’ to what is meaningful to them.  Perhaps your winner wants to be on a special project team or attend a training session. Why not make it meaningful and demonstrate your appreciation for the contribution to success?

And, Thank You, Kelly Ford!



The Value of Strategy Discussions in Fiji

November 13th, 2017

I've Been Thinking

I just wrapped up strategy discussions with my global, growth-focused group (of top-notch consultants) in Fiji.  Since we are a group spanning multiple countries from the US to Australia and Japan, we meet in interesting locations throughout the Pacific Rim and western North America.  Interestingly, we all felt as though this was our best meeting to date.  Although there are several reasons, a contributing factor is certainly the location.  We were all “on” in such a beautiful setting.  This was our view from dinner one evening.  Do you think you would come up with more powerful insights in a setting like this?

One tip to implement this week: Settings, Creative Ideas, Strategic Insights, Successful Outcomes

I’m not suggesting everyone hop a plane to Fiji………although it might be fun.  At the minimum, think about what settings are conducive to creative ideas, strategic insights and successful outcomes.  What do you think?

In my experience, it is rarely the same ideal setting for each person.  If not, what would be the value without diversity?  We have a good diversity of people, professional focus areas, cultures and more in our group.  Thus, we also have preferences as to ideal locations; however, we found one that would raise the bar for the collective group.  Why not think about doing the same for your work team?  What settings surround you?  

I’ve seen some of my clients decorate inside their offices and stimulate new thought.  That is certainly doable, inexpensive and can be great fun.  Other clients go to a historic hotel such as the Mission Inn in Riverside for a special meeting.  And, others go to an ideal setting such as the beach (regardless of the hotel or conference room).  Perhaps you can suggest that your customers or suppliers use a conference room next to an interesting restaurant or setting.  Think outside the box and you’ll find that strategic insights follow.  

For example, I remember one situation of a particularly exciting work group in 1994 where we drove success in the most mundane of locations.  We were motivated, came up with new ideas and achieved dramatic results – working from the kitchen of a colleague.  

Remember, it can sometimes be the subject, the team, the learning opportunity and more.



Whole Foods CEO and Conscious Capitalism

November 9th, 2017

Whole Foods and Amazon
John Mackey, the CEO of Whole Foods, was a keynote speaker at APICS 2017.   Of course, we were all interested because of the recent acquisition by Amazon and what it means for the grocery business.  What is telling is that John Mackey still works at Whole Foods and thought it made sense to partner with Amazon.   He stopped taking a salary more than $1 in 2006 and sold his business earlier this year, and so he certainly doesn’t have to work! 

Conscious Capitalism
John is passionate about conscious capitalism which also happens to be the title of his book – Conscious Capitalism: Liberating the Heroic Spirit of Business .  He argues that both business and capitalism are inherently good and used some examples such as Southwest Airlines.  He said that business is about the real lives of real people. 

A few of the tenants of conscious capitalism include:

  1. Instead of profit maximization, purpose maximization – Thinking about higher purpose can yield interesting results.
  2. Stakeholder integration – Focusing the extended team on purpose maximization.
  3. Conscious leaders – It all starts with leadership!
  4. Conscious culture – Since culture is the set of beliefs that governs behavior, a conscious culture is the bedrock to ensuring success.

Creating Strong Business for the Greater Good
John is interested in creating strong businesses, moving capitalism closer to its higher potential and fostering a positive environment for all….a noble purpose.  Perhaps we should pay attention and consider themes that might be valuable.  After all, he grew Whole Foods from scratch to $16 billion!

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Results Follow People

June 30th, 2016
growth, results

Results follow people who put together strategies and successfully implement them. Great tools help, but people are critical to improving your bottom line.

Results don’t occur with the latest fads – even with good fads such as lean manufacturing or SIOP (sales, inventory and operations planning) programs. Results don’t occur with cool system functionality – certainly, it makes life easier if you have great tools but results won’t occur due to a system. Instead, results follow people. LMA Consulting Group has been in business for over 11 years, and prior to that I was a VP of Operations and Supply Chain for an absorbent products manufacturer. I’ve yet to see an example of results that didn’t follow the people.

For example, in working with an aerospace manufacturer a few years ago, we had to rapidly improve service levels for our customers. After a quick assessment, we started implementing a plan to resolve the bottleneck operation. In two months, what had not been resolved in a year was dramatically improved with the rollout of our plan. However, the plan wasn’t the 80%; the reason for success went back to the people. Management supported the plan and was involved on a daily basis in the rollout. The executive in charge visibly supported the plan even when inconvenient.  The team met daily to review progress, discuss issues and ensure success.

Down-the-line, the management team changed. The executives left. The emphasis changed to different topics. And service levels fell. Certainly the new process and plan would still work. Results followed the people – out the door. Then, as one would expect, things changed again. People re-focused, and business started improving.

We all fight fires and hopefully put together and execute strategies; however, we must keep in mind that getting distracted on reports, the latest fads 5P Accelerator for results, growth and profitsand the like are useless unless accompanied with leadership. If you are interested in ensuring results follow people, contact us on leveraging our proprietary process, the 5P Accelerator to fast track growth and profits.

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