Tag Archive: revenue

SIOP for Revenue Growth & Predictability

January 16th, 2020

We have received quite a few calls lately with the underlying theme of revenue growth and predictability. And, it got us thinking: Doesn’t every executive want revenue predictability and growth? Certainly the successful ones do!

If your revenue is difficult to predict from week-to-week, month-to-month and year-to-year, it might be time to think about how to design and implement a SIOP (sales, inventory and operations planning) process that will deliver these results for your business.

Similar to lean, the SIOP methodology alone is useless. Perhaps worse than useless because it might get your hopes up. On the other hand, if you think through how to design and implement the process so that it “works” in your business and supports your bottom line results, it might put you over that stretch target of revenue growth, profitability, or working capital effectiveness. At a minimum, it will align your resources and bring clarity and predictability to the situation so that you know which levers to push or pull to drive results.

How does SIOP enable revenue predictability?

  1. Demand plan: It starts with a demand plan. Once you align all sorts of disparate inputs to your sales forecast (within your organization, with your customers and supply chain, with the market and with your data and information), you will have the best view of your demand plan feasible.
  2. Supply plan: Since you align your demand plan with your supply plans (staffing, overtime, machinery, equipment, storage, supply base), you are much better equipped to deliver the demand plan with high levels of customer service and profitability.
  3. Metrics: SIOP incorporates the monthly review of key metrics related to demand and supply, so all relevant parties remain aligned on critical data points and progress.
  4. Continuous feedback: Since there are weekly activities with a monthly cadence, as business conditions change, any relevant and noteworthy changes and nuances are naturally incorporated into the plans and visible to all relevant parties.
  5. It’s about people; not data: As the EVP of Operations at Fender Guitar says in our interview below, it is all about the people. Although clients typically worry about syncing up data sources (which has to be a part of the process), the most important part of the process is to align people. Once Sales, Marketing, Business Development, Customers, R&D/New Product Introduction, Operations, Finance, and Suppliers are aligned, suddenly all the data concerns disappear.

As executives are concerned about potential recessions, impacts of global volatility, the Skills Gap and the Amazon Effect, future-proofing their manufacturing operations and extended supply chain is on their mind. SIOP is one way to future-proof your business so that it remains predictable while minimizing risk and maximizing outcomes.

Why not consider a SIOP assessment to fully understand your potential? Following the assessment, conduct a pilot SIOP process to see the what benefits emerge.  The value will become clear. If you’d like assistance to stack the deck in your favor with this process, please contact us.

Did you like this article?  Continue reading on this topic:

SIOP / S&OP and Bottom Line Results

The Strategic Benefit of SIOP



Pricing & Profits: It’s Not All About Revenue

May 26th, 2019

According to CFO Magazine, Amazon’s profit doubled to a record $3.6 billion in the first quarter yet reported its lowest growth rate in quarterly revenue since 2015. In today’s Amazonian environment, subscription services such as Amazon cloud and Kindle services as well as disruptive forces such as the 3rd party seller services (clients worry about from the opposite viewpoint) are driving profitable growth for a company that once lost money continuously. Are you considering ways to ensure your pricing makes sense and delivers the results you intend?

 

It’s Not All About Revenue
Ask questions of your sales representatives, customers, marketing department, executives and competitors about pricing:

  • When is the last time you raised prices? Why are they at the level they are set?
  • Who sets your prices? Think carefully as this could lead to some interesting discussions.
  • Do you know how your prices compare to your costs? There are lots of reasons NOT to set prices this way but knowing this relationship is relevant.
  • How does your pricing stack up with the competition? Again, high or low is irrelevant but considering your strategy is key.
  • Since it has come up frequently lately, I’ll also throw in this one: Is your pricing so complex that your ERP system won’t support it? That would certainly be something to re-evaluate.

Pricing is an important topic, assuming you are interested in profitable growth. It is worth taking the time to ask a few key questions of your internal and external resources. Gather your executive team and put some focus on whether what you are doing makes sense and supports your strategy or if it is out of date. With the pace of change at an all-time high, reviewing this topic once every few years is by NO MEANS enough. If you’d like an expert to assess your situation to partner with you to achieve these types of results, contact us.

 

Did you like this article?  Continue reading on this topic:

Eagle Eye Strategic Focus

Strategic Pricing

The Resilient Supply Chain: Global Trade Unrest



The Resilient Supply Chain: What If You Sell More?

January 7th, 2019

Most sales people answer the question “What if you sell more?” with a cheer. Most accountants would add up the additional revenue and profit.  And, often, the Operations resources would be glad the leaders are in a good mood. But does anyone know if we are set up to successfully handle increased sales if they occur?

There are several questions to consider in evaluating ‘what if you sell more’. It all boils down to capacity.

  1.  Machine Capacity – Do you have the machine capacity to keep up with the increased demand?  If not, can you retrofit a machine? Can you use a machine from another facility?
  2.  Labor Capacity – It is very frequently a significantly bigger issue than anything else. Do you have the people to turn up the volume?  Can you add another shift? How about overtime? Do you have a partner who can supply temporary workers as needed? If you have the sheer numbers of people, the question becomes, do you have people with the appropriate skills for the specific products being sold?
  3.  Supplier Capacity – Even if you have the manufacturing and logistics capacity, it won’t matter if your suppliers cannot keep up with demand.  What are your suppliers’ expectations? Do they have flex capacity? Will they prioritize you?
  4.  Cash Reserves Capacity – None of this matters if you do not have the cash reserves or liquidity to fund sales growth.  Aggressive growth sounds like a pleasant problem to have vs. cutting back. However, if you cannot fund growth, it can quickly become unpleasant.
  5. Infrastructure Capacity – Will your internal people, processes and systems support the increased demand?  Will increased volume lead to decreased margins? Customer complaints? Loss of visibility? Or can you scale effortlessly?

As much as selling more is a great problem to have, it pays to think about it before you run into it unexpectedly.  Some companies get carried away with rules and regulations designed to stifle Sales. That doesn’t work either!

Instead, think proactively. Plan for the likely.  Think through contingencies.  Remain light on your feet.  And, you’ll be able to answer the question, ‘what if you sell more?’ with a resounding “YES!”.

 



Customer Service

October 10th, 2013
Differentiate your company with first class customer service.

Differentiate your company with first class customer service.

The value of exceptional customer service might not be clear upfront; however, it is invaluable!

I often hear my clients think about sacrificing “a little” customer service in order to save money or address other priorities.  After all, it doesn’t seem like it should have a significant effect.

For example, are we willing to sacrifice in order to gain a good discount?  Just think about your Procurement function – what is top priority?  Total cost including service, quality, etc.?  Or, do we say those are important but measure on cost?  Or how about month-end shipments?  Which is prioritized?  Service or quarter-end sales revenue dollars? If you want to thrive long-term, it better be customer service!

In today’s new normal business environment, service is of paramount importance.  Will you stand out from the crowd?  Being “good” is no longer enough if you want to create loyal customers, generate referrals/ grow business and collaborate with customers for success.  You must be differentiated from the competition.

The crucial importance reminds me of how simple yet exceptional service stood out in my mind a few years back.  It was a regular evening, and I was excited to stop by Mimi’s to pick up my favorite pumpkin pancakes, coveted during their limited time available on the holiday menu.  While stopping by the store prior to picking up dinner at Mimi’s, a woman backed into my car. Unfortunately, I saw her coming and blew my horn, but I couldn’t do anything but watch it happen. And, of course, she had a huge truck, and so she not only bumped my bumper but it damaged my hood as well.

After calling the police and finding out that they no longer will come out to non-injury accidents, I realized that I was on my own. So, we exchanged information etc. It all took a while, as she couldn’t find the information in her husband’s truck, and she had to borrow my cell phone to call him. He responded to her description of backing into someone by saying, “that’s what side mirrors are for”; thus, she broke down in tears, which didn’t help our situation.

An emotional 30 minutes later as we finished up the process, I got a phone call. It was Mimi’s – they wondered where I was because they didn’t want my pancakes to get cold. I told them that someone had backed into my car in a parking lot and so I ended up delayed but was finally on my way. By the time I arrived at Mimi’s, they made a completely new set of pancakes so they wouldn’t be cold, as they didn’t want me to have any more issues after the car incident. How impressive is that customer service!

After arriving home, I called my insurance agent and left a message. I was concerned about the appropriate process to follow to ensure I was covered and didn’t want any issues (after all, everyone hears the horror stories of people completely changing the story surrounding the accident while driving away from the scene). With excellent customer service, he called immediately upon arriving at the office the next morning.

My insurance agent demonstrates exceptional customer service – consistently.  I found him by driving by his office when I first moved to California, and he went out of his way to help me with an MBA class related to insurance at the time.  In this situation, it happened to occur on New Year’s Eve – of course!  Thus, he planned to leave the office early but was very helpful in answering all of my questions and stayed late to help me with a few concerns.  How many agents will pick up a non-essential phone call after closing hours on a holiday in order to help make a client comfortable? Again, that’s value!

Next I had to go to a body shop to get a ballpark estimate. I went to the same, approved body shop I had used previously solely due to their customer service.  I was so impressed that I wasn’t upset that I had to bring the car back to readjust the doors – a big inconvenience I overlooked for exceptional service.  They did not disappoint. The same manager was on duty. He was very helpful and provided information. I told him that I was anxious to get the estimate (as I was mainly worried and anxious because I didn’t want my car to be totaled), and he went out of his way to ensure I was happy. What else can you ask for?

Although I spent a significant amount of time dealing with this problem, it could have been FAR worse if I hadn’t received excellent customer service from three separate service providers. Do you think I’ll be a repeat customer? You bet! Would I pay extra money to be guaranteed a quality experience and stress-free service? Absolutely! What are you doing to ensure your customers, clients, employees and supply chain partners feel the same way?



How Manufacturers and Distributors can Utilize Social Media for Success

July 30th, 2013
Lisa Anderson - LMA Consulting Group - social media

Maximize your use of social media to distinguish your company.

In today’s new normal, we are in a volatile and challenging business environment where customers are demanding more for less – and NOW!

Thus, it is increasingly critical to stand out from the crowd.

One of the best ways to differentiate your company is to utilize social media to increase revenue, profitability, and customer satisfaction.

Those manufacturers and distributors who are jumping on the social media train are surpassing their competition. Here are a few of the ways they are leveraging social media:

1.        To promote products – social media can help to generate excitement about new products and features. As influencers note interesting developments and offer incentives on Twitter and Facebook, the market follows.

2.       To find talent – nothing could be more important in today’s environment as high-skilled talent is hard to find yet vital to managing complex supply chain networks. LinkedIn is a great way to source top talent!

3.       To source supply – although the tried and true ways to sourcing suppliers still remain valid, social media can provide interesting new alternatives. Social media brings the global market to our fingertips and allows us to search and focus in on specific attributes and selection criteria at any hour of any day 24/7.

4.       Gain expertise – there are countless experts in a wide variety of subject matter leveraging social media as a Q&A tool. For example, one of my clients wanted to find out how to leverage their ERP system to drive business results in supply chain planning and was able to find numerous experts happy to share expertise on Linked In groups and blogs.

5.       Training/how-to – as customers are king in today’s new normal business environment, what could be better than providing 24/7 access to training tools and how-to videos on YouTube and other sites so customers can gain just-in-time access to what they need when they need it?

Learn more about how to use social media with my new book “Leverage Social Networks to Drive Business Results.” By utilizing best practices, business leaders will gain the critical strategies to utilize social media to achieve success.

Avoid those Social Media Landmines too! Download  my 8 Don’ts in Leveraging Social Networking White Paper.