Tag Archive: scalable

The Stock Market, The Economy & How They Do Not Align

February 12th, 2019

Key research groups are starting to talk about their predictions for the economy, and everyone is interested. It feels like everyone is waiting for the other shoe to drop. After all, we have been in an expansion mode far longer than is typical and there is plenty of volatility and uncertainty in global trade, the U.S. Shutdown and more. Last week, I heard a research expert from City National Bank and did an informal poll of trusted advisors (CPAs, attorneys, consultants, commercial bankers etc.). The bottom line = continued growth.

The City National Bank expert said that they study about 20 economic indicators, and all are firing on all cylinders. The only one that has consistently shown some potential for hesitation is geopolitical risk –  which isn’t new. As much as the U.S. Shutdown, global trade tensions, Brexit and more has the stock market jittery, it hasn’t impacted the economic forecast. Businesses are growing and the economy is doing well! The hot topics being discussed include asset protection, the talent shortfall, the technology transformation and cyber security risks. There are always lots of details to consider but the common theme is growth. Thus, a key question becomes, are you prepared for scalable, profitable growth?  

One tip to implement this week:

What I’m seeing as a differentiator to success in these strong yet uncertain times is the ability to ‘stay the course’ and be resilient.  With each new emerging news story, I’m seeing the stock market choke and people panic. Unfortunately, this can lead to short-term, erratic changes in executives’ decisions. No one wants to be put into the same position as they were in during the last recession. So, the tendency is to overreact. Yet, the most successful clients provide stability and a platform for scalable growth.

They are willing to make hard decisions, ranging from investing in top talent to systems and technologies (even when their peers are hesitant) to addressing the sacred cow (every business has at least one!) to thinking about how their business model might be evolving and what they might need to change (even when they are currently profitable and seemingly successful).

It might make good sense to take a step back and avoid overreacting to the latest news. Stay aware and on top of trends. Ask questions and consider down-the-line impacts on your business. Instead of getting caught up in the latest drama or fad, put thought into how to build agility into your plans. How can you ensure your navigation system is rock solid and will weather whatever storm occurs next. If there is one constant, it will be continued volatility and uncertainty.

Prepare to be resilient. Check out our new resilient supply chain series and contact us if you’d like to have an assessment of your organization.



UGG Founder, the Amazon Effect in Healthcare & Why Demand is Key

February 8th, 2019

In listening to the UGG founder, Brian Smith talk through his trials and tribulations in developing the amazing UGG brand, a few themes emerged.

  1. Resilience in finding pivot points when obstacles emerged played a vital role in creating the UGG brand.  
  2. The benefit is what matters; not the product.
  3. Creating demand goes back to being a leader in the category when the market shifts.

What a great story!

Next, related to the demand theme, I spoke to the Professional Women in Healthcare (PWH) Orange County group about the Amazon Effect. As a former Executive of a healthcare manufacturer, it was fun to have an interactive discussion with these leaders. Interestingly, healthcare manufacturers and distributors are experiencing the same issues as aerospace, building products and food & beverage. How to keep up with demand (or preferably get ahead of it) while increasing profit and accelerating cash flow (not having a bunch of inventory tied up for no benefit) is the topic on everyone’s mind. Aligning demand and supply and related parties is the trick!

Demand emerges as a common theme. Therefore, I’d like to invite you to an executive lunch centered on the topic, “Increase Demand“. I am speaking on a panel of experts on driving demand in your business. Use early bird promo V25 for a 25% discount. Hope you’ll join us there.

What Should We Consider and/or What Impacts Could Arise?
Every client has a focus on demand. Typically, they are thinking about how to grow the business in a scalable, profitable way, which leads to a mountain of questions about forecasting and how to get in front of demand.

Interestingly, it ALL goes back to one place, the customer. Do you have a passion for your customers and creating a superior customer experience? If so, demand will grow. If not, it won’t. In watching countless organizations over the last 14 years in consulting, I’ve yet to see one that succeeded long-term without this essential ingredient. Have you?

If you have a passion for the customer as the CEO or General Manager, that is a great place to start. However, it is not enough. Your sales team is relevant but the most successful clients view the entire organization as the sales team with a passion for the customer. Ask a trusted colleague to visit your facility. They will be able to ‘feel’ whether there is a passion for the customer or not. Ask them.

If the most successful executives have a focus on demand, it is worth noting. Are you providing lip service to the customer or are you creating this view within your organization? There is also a tremendous amount of focus going into understanding demand with forecasting tools, analytics, artificial intelligence, and more. Do you have a clear path forward as it relates to demand? Of course, this topic also relates strongly to creating a resilient supply chain. Only the most successful companies predict and proactively engage customers to get ahead of demand.

To learn more about these strategies, check out our new series:



The Resilient Supply Chain: Top Requests from Clients on Technology

January 11th, 2019

Next in our supply chain resiliency value series, we are sharing a short video on the relevance of ERP and e-commerce systems from the Manufacturing Summit’s panel “Amazon Effect: Pass or Play – the New Sales & Distribution Game and How it Affects Manufacturing”.

I’m responding to a question on what manufacturers and distributors need when it comes to systems and technology.  Every client in the last few years has requested a project objective that goes back to the overarching goal of scalable, profitable growth.  The trick is how to achieve BOTH a superior customer experience (with increasing pressure from disruptors such as Amazon and Uber) AND profitable growth. Of course, there is no easy answer, and it depends on a multitude of factors. With that said, there is an ever increasing need to scale with technology inclusive of ERP, e-commerce and more.

ERP has become much more of a strategic topic. It isn’t about blocking and tackling and using ERP to achieve tactics.  Instead, it is about whether a business has the technology and systems to scale in a scalable, profitable way.

Do your systems support your customers’ needs?  If not, you had better jump into the fray or the next disruptor will eat your lunch.  If your answer was, ‘yes but I have to do x, y and z to make it work,’ our next question is will this process be repeatable, reliable and profitable?  If not, perhaps you better think twice. It is likely your competitor will answer yes.  Lastly, have you thought about your customers’ needs a year into the future?  If you aren’t prepared to handle them currently, you are getting behind.

Our most successful clients don’t wait so long that they lag behind. Is it time for an upgrade?  You are most welcome to our free resources to determine whether it is  the ‘right’ time. As you debate the benefits vs. costs, keep in mind that as hard as it is to take the leap, the most successful executives are willing to take on prudent risk to make leaps forward.  Are you?

If you would like an expert to assess your situation to determine whether you should further leverage your current software, put the effort into upgrading or simply focus on people and process improvement opportunities, contact us.

 



The Resilient Supply Chain: Do You Have Vendors or Partners?

December 1st, 2018

Since we did research on “The Squeeze” for a speech on the the squeeze in aerosapce (meaning:  how does the supplier in the middle between the Tier 1 suppliers who supply final assembly parts for an airplane and the powerhouse mills survive, or preferably thrive), we have been thinking a lot about the supplier relationship.  Coincidently, we also heard a lot on this topic at the Association for Supply Chain Management (ASCM/APICS) international conference as it is a hot topic across all industries. There was an almost identical discussion occurring with retail and the consumer goods industry. Last but not least, all of our clients are seeing the relevance of this topic.

What is the “right” answer?  Of course, it depends!
To manage “the squeeze”, one of the keys is to create partnerships with your key suppliers.  The rest can be vendors since they are not core or significant to your success. However, your key suppliers must be partners and collaborators.  For example, one of the best ways to handle the middle position in the aerospace world is to bring your customers and their demand together with your suppliers and their capabilities.  

Here are a few ideas that all depend on being a partner:

  • Collaborate with suppliers on new ideas/design concepts to reduce materials and waste for you AND up your supply chain.
  • Become a partner of your customer and gain access to demand information as it becomes available and help translate that into a benefit for your customer, you and your supplier.
  • Leverage pricing and volume across the supply chain for a win-win-win.

Although these ideas relate to aerospace, the same concept applies with every client.  When I was VP of Operations and Supply Chain for an absorbent products manufacturer, we used these same concepts to find win-win-win solutions in your supply chain.  We partnered with key vendors to redesign materials (that performed better at a lower cost), redesign packaging, reduce waste in our manufacturing process which required teaks and collaboration with both material and equipment suppliers and more.  By following a partnership route instead of the “vendor” negotiation/beat up on price route, we turned our situation around from bad to good.

We found private equity backers who wanted profitable growth.  However, soon after, the market changed and oil and gas prices were continually rising which significantly impacted our material costs (and were unavoidable) while our private equity investors still expected the same profit improvements as before.  Our business was also heavy in transportation cost since the product was bulky which was also an issue with rising oil and gas prices. Thus, we collaborated with customers, material suppliers and freight suppliers for win-win-win solutions. It “worked” and we were able to offset the price increases while growing the business in a profitable and scalable way.

These types of situations are common in today’s business environment.  

Do you view your suppliers as vendors or partners? And who are you hiring to manage these relationships?  Transaction-oriented purchasing folks or strategic relationship procurement resources?

 



The Resilient Supply Chain: Does Your Environment Support Fear?

November 27th, 2018

In today’s Amazonian environment, customers expect rapid delivery (same day/next day is preferred regardless of industry), 24/7 accessibility, easy returns, innovative collaborations and much more.  Add disruptors popping up all over (such as Uber, Netflix and more), trade war impacts and technology disruptors to entire industries (such as artifical intelligence to the accounting industry), it is quite clear we are in a new ballgame.  One of the keys to successfully navigate this environment is to rely on your people.

When it comes to your people, if they don’t feel empowered, they will not take a leap of faith and bring up ideas, test theories etc.  In essence, they need to overcome fear to rise to the occasion. What is the environment like in your office? Here are a few questions to ponder:

  1.  Will employees be shunned if they go against the grain?  For example, if employees bring up an idea that isn’t popular or one that the manager thinks puts him/her in not-as-good a light, will they get shunned?  Before leaping to the answer of “of course not”, perhaps take a second look one or two levels below you. You might find a different answer than you wish.
  2.  Is failure celebrated?  Of course, we don’t mean multiple failures repeating the same mistakes but is a single failure/learning experience celebrated?
  3.  Would failure still be celebrated if it impacts month-end numbers? Unfortunately, that is when it will occur.  It is just luck of the draw.
  4.  Is it OK to help a project team?  For example, if an employee helps a project team that requires his/her expertise even if it isn’t relevant or supportive to his boss’s success, will it be OK?  Worse yet, if this person is busy (which will always be true), is it OK if he diverts a few hours to help the project team for the greater good even if it doesn’t help his manager?  Will the manager answer the same way if he didn’t know you were listening?
  5.  Do you provide tools and training?  Some employees will take the leap on their own whereas others want the extra support to feel qualified to provide ideas and advice.  Are you willing to invest in these?
  6.  Will you provide mentoring and support? Beyond tools and training, ongoing mentoring and encouragement is needed to facilitate the process.  Whether formal or informal, do you have a process in place that provides this support?

It is definitely much harder than it appears to have your employees overcome fear when you aren’t looking.  

Are you willing to invest time and money into this effort to enable the growth of your employees and the scalable, profitable growth of your business?