Tag Archive: service

Should I Upgrade Now or Later?

October 10th, 2019

A Client Question
Since we have a simple reorder point system largely in place and we plan to focus on an ERP upgrade in the coming year, should we continue to roll out MRP (material requirements planning) and DRP (distribution requirements planning) or should we just put our efforts into the new ERP system?

In this case, there is still much of the planning process that is done manually. However, a manual process could be good or bad. Employees forced to perform manual processes learn the process in detail yet they might not understand why they are doing what they are doing. Would there be a larger benefit in learning the process in the current system and then re-learning in the new one or vice-versa? After all, resources are limited and the people performing these roles understand key customer requirements in detail. How should we best utilize their time for maximum benefit?

The Answer
In this case, resources are limited. So, the key question becomes how to best leverage the planners to meet customer expectations while getting ready to support the future. Since the simple reorder point works but only to a degree (since they cannot see their bill of materials explosion) in this case, the rest has to be manually calculated. When looking at a configure-to-order situation across multiple sites not connected by DRP, inventory disappears and the complexity of planning materials increases. Also, unfortunately, the only resource that gains an understanding of MRP / DRP concepts is the material planner. The production planners remain unclear as to how these concepts apply. So, it makes sense to roll out the concepts in the current system so that the team gains exposure to how it works. This understanding will prove valuable in implementing the new system, and most importantly, if the material planners do not have to spend countless hours manually calculating numbers, they can provide better service to customers, as well as contribute valuable input in setting up the new system for success.

Food For Thought
Although the MPS/ MRP module of ERP systems can be valuable in improving service and reducing inventory, they do not always make sense. Take a step back to look at the complexities in your planning process. Have you overbuilt the process? We also find that simplifying creates substantial improvement for almost every client. Perhaps you should simplify rather than add complexity, even if you already own the system or your key resources think complexity is needed. At least 80% of the time, we simplify to some degree.  We might take what seems like a step back to simplify in order to take a giant leap forward.

If you are interested in running your situation by us, contact us.

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Which Inventory Planning Method is Best?
Systems Pragmatist



Why Supplier Management is More Important Than You Think

June 17th, 2019

Supplier management has been a theme this week. I taught a CSCP (certified supply chain professional) class session about supplier relationship management and SRM software recently. An attendee had a great example of the impact of poor quality.  Her company was sending an entire container load of product back to Asia with defective parts.  This was bound to have negative impacts on the customer. After all, they were already delayed.  Now, they were spending another month on the water to start over again. That led us to discussions on backup suppliers.

Next, I spent quite a bit of time on webinars and calls one day talking about the critical importance of supplier lead time, reliability, safety stock, lot size and how these factors impact our ability to maximize service, profit and cash flow. And, I presented to APICS Ventura on “The Resilient Supply Chain” We had intriguing discussions on the trends of vertical integration, supplier consolidation, allocation of key materials (and how consumer products are gaining priority access with the leftovers being allocated to industrial companies), the impact of tariffs on sourcing, and several more topics.

The bottom line of each of these discussions is that proactive management of suppliers is of ever-increasing importance in today’s Amazon impacted business environment. If you don’t have what you need, when you need it, where you need it, in good quality, and within cost guidelines, you are likely to lose vs. your competition. And, this includes last minute changes! Do you consider your supplier your partner or someone to negotiate with and gain an advantage over?

What Should We Consider and/or What Impacts Could Arise?
It is NOT all about cost. Of course, the hot topic on executives’ minds is how to achieve scaleable growth, so profit and cost are important topics.  Yet, smart executives realize it is quite easy to sacrifice the future by saving pennies in the present. Similar to the mistakes made several years ago when it didn’t matter whether it made cost-sense or not (ie. Boards were demanding outsourcing regardless of the financials), many Boards are demanding supplier concessions without looking at the extended supply chain impacts. Instead, stick up for looking at total cost and taking the value viewpoint! Of course, this means you’ll be focused on costs but it won’t be your sole focus.

We talked about several scenarios where you had to invest financially upfront in order to achieve longer-term success. For example, we talked about keeping a more expensive backup supplier and giving them 20% of the volume. Boards and private equity backers weren’t too happy with the extra cost yet this risk mitigation technique saved the day on more than one occasion. When the material went on allocation, the main supplier struggled or the ports/transportation infrastructure broke down, those who planned for the inevitable bump in the road had uninterrupted supply from the backup supplier and satisfied customers while the competition fell further behind. Are you thinking about your suppliers like a cost or a partner?  You’ll find more information on these types of topics on our resilient supply chain series.

 



Manufacturing & Supply Chain Expert Lisa Anderson Predicts Resilient Supply Chain Key to 2019 Manufacturing Success

January 22nd, 2019

Originally published on PR Newswire on January 17, 2019

CLAREMONT, Calif.Jan. 17, 2019 /PRNewswire/ — Manufacturing and Supply Chain Expert Lisa Anderson, MBA, CSCP, CLTD, president of LMA Consulting Group Inc., predicts that manufacturing will be a top economic force in 2019. Key to the success will be creating a resilient supply chain

“Economic volatility and uncertainty are the new normal. Instead of lamenting, clients should take advantage of the opportunity. There has never been a better time to stand out from the crowd with a superior customer experience amidst the chaos,” Ms. Anderson commented. LMA Consulting Group works with clients on manufacturing strategy and end-to-end supply chain transformation that maximizes the customer experience and enables profitable, scalable, dramatic business growth. The firm also conducts research to help clients predict future trends and embrace key priorities to succeed.

“Not only has the Amazon Effect driven customers to expect customized product and service offerings with rapid response, creating a greater demand for local manufacturing, it has also made innovation a cultural norm. Drones, robotics, IOT, artificial Intelligence, big data predictive analytics and additive manufacturing are transforming entire industries while providing the tools to create a customer-centric, resilient supply chain,” she said. LMA predicts that creating a resilient supply chain that navigates disruptions and provides a superior customer experience will be key to achieving peak performance.

Based on client engagements and research, LMA has identified 5 areas that manufacturers must address to be successful in 2019. It starts with superior customer service, and continues by taking a holistic, full circle view of the business. Understanding and preparing for volatility as the new normal will become foundational, whereas leveraging the collective power of the end-to-end supply chain and manufacturing capabilities will emerge as a critical priority, culminating in the need to create a resilient supply chain to be agile in these tumultuous yet exciting times that are ripe with opportunity.

“Manufacturing is on the forefront of breakthroughs every day.  From making the latest medication to cure cancer to customizing an engine part that will transform space exploration, manufacturing is uniquely positioned to have a lasting impact on our economy and our lives. For those who embrace the opportunity, the rewards will be tremendous,” Ms. Anderson concluded.

About LMA Consulting Group – Lisa Anderson, MBA, CSCP, CLTD
Lisa Anderson is the founder and president of LMA Consulting Group, Inc., a consulting firm that specializes in manufacturing strategy and end-to-end supply chain transformation.  She focuses on maximizing the customer experience and enabling profitable, scalable, dramatic business growth Ms. Anderson has been named a Top 40 B2B Tech Influencer by arketi group, a 50 ERP Influencer by Washington-Frank,ranked in the top 46 most influential in Supply Chain by SAP and named a top woman influencer by Solutions Review. She recently published, I’ve Been Thinking, an inspiring collection of 101 strategies for creating bold customer promises and profits. A regular content contributor on topics including providing a superior customer experience with SIOP, advancing innovation and making the supply chain resilient, Ms. Anderson is regularly interviewed and quoted by publications such as Industry Week, tED magazine and the Wall Street Journal.  For information, to sign up for her Profit Through PeopleTM Newsletter or for a copy of her book, visit LMA-ConsultingGroup.com.

Media Contact                                                             
Kathleen McEntee | Kathleen McEntee & Associates, Ltd. | p. (760) 262 – 4080 | 207843@email4pr.com



Let’s Spur Innovation

September 24th, 2018

Last month, I led a manufacturing roundtable on the topic of innovation.  Undoubtedly, if we want to be successful over the long-term, we must innovate. Problem solving only gets us back to our standard level of performance.  Although necessary, it will not be enough!  Instead, to exceed our customers’ expectations while enabling profitable growth in today’s Amazonian marketplace, innovation is a requirement.

Innovation is raising the bar to an entirely new level of performance.  It doesn’t require you to develop the next iPhone or 3M’s famous sticky pad.  In fact, the best innovators might not even think they are creative.  The great news is that everyone can innovate.  It doesn’t have to require significant investments.   What it does require is a culture that enables innovation.

An Innovation Culture
Here are a few “musts” when creating an innovation culture:

  1. Engage your people -You aren’t going to be successful innovating in isolation – at least not for long!  Involve your employees – view each employee as a valuable asset.  You never know what ideas can be unleashed if you have a culture of innovation that values each employee’s input and ideas.  Start here. Until your people are engaged, there is no point in going further.  How long do you think you’ll have happy, innovative customers with unhappy, not engaged employees?  NOT long.
  1. Engage your customers – One of our clients is creating an innovative culture.  They recently purchased a clay manufacturing company and are working to raise the bar.  The owners and executives value the input of their people and extend that to their trusted advisors, customers and suppliers.  I happened to be in Hawaii last month and my best friend wanted to see a pottery shop of an artist she really liked.  So I went along for the ride. When we arrived, I brought up my client because I thought the owner know of them. They were so excited.  They said they were a customer for life of Laguna Clay  (my customer) because they provided exceptional service.  They proceeded to provide input, ideas and much more. I took pictures and texted them back to my client. My client had engaged their customer in the innovative process.

 

 

 

 

 

 

  1. Provide opportunities– Next, provide opportunities for innovation.  Do you provide a “safe zone” for your employees, partners and others to collaborate and innovate?  Most importantly, you’ll have to set aside time for them to focus on this priority.  Beyond time, provide your vision and get the process started by spurring idea generation and give them a few guidelines.
  1. Stick by your commitment –  Innovation will create failures which is why guidelines are helpful so the failures can be isolated within a reasonable tolerance.  There is something wrong if failures don’t occur. Thus, be prepared for them and celebrate the progress. Don’t be disappointed, or worse, beat up your people. That will mark the end of their innovation.

Creating an innovation culture is “the” key to innovation. Start there. End there.  We’ll talk through more of the details in the middle in future editions (or feel free to contact us to help you accelerate progress); however, this is the 80/20 of success.  It’s well worth raising the bar of performance.



Should I Move?

July 9th, 2018

Our clients frequently call with questions such as:

  1.  Should we renew our lease?
  2.  Should we move to a lower cost area?
  3.  Should we move to a lower cost state?
  4.  What considerations should we think about when evaluating our manufacturing and logistics network?
  5.  Should we outsource?

Thus, we thought it would be prudent to address some questions and themes that should be evaluated from a strategic point-of-view when discussing supply chain network assessments.  

Let’s start by saying that our top clients begin THINKING about these topics several years in advance. Similar to selling a business, it isn’t the best plan to evaluate whether to renew a lease at the last minute or to be forced into a particular partner or location because you started preparing “too late”.   

Instead, why not think ahead….

  1.  Where are your customers?  – As much as we all want to reduce costs especially in today’s Amazonian environment, we also need to remember that customers expect rapid deliveries, change their mind frequently (and expect agility) and desire easy returns.  Thus, where are you located in comparison to your customers?
  2. What are your customers’ expectations?  – Lead times. Personalized service.  Return policies. Vendor managed inventory.  Future forecasts. What will they expect a year from now?  Are you already planning for these needs?
  3.  Where are your suppliers?  – Similar to your customers, it is important to consider where your suppliers are located as well.  Do you receive product from the ports? If so, what volume is related to the ports?
  4.  What access do you have to people? – We evaluated Nevada for one of our clients. However, when we talked with local contacts to estimate building / lease costs, we also discovered that as low as the overhead might be, freight aside, there were no people.  Tesla had absorbed them all and there were requests to supply people from Southern CA to support current workloads. People can certainly be relevant!
  5.  What type of freight partners/ rates are in place? –  No matter how close you might be to your customer, freight can add up – and, more importantly, delays to your customer are VERY costly (lost business, charge backs from customers such as Walmart, ill will and more).  Just because you have carriers with your current situation, it does NOT mean that will be true with your new situation. Freight is tight and rates are going up! And, remember last mile considerations are complex. Last mile. Last minute!
  6. What type of transportation network is required to support your business?  – In addition to freight considerations, will you need to think about parcel, rail, ocean freight, and other modes of transportation?  Or should you be considering these options?
  7.  What inventory levels are built into your network?  – Inventory = cash tied up.  

There is quite a bit more to think about than solely a cost cutting exercise.  Most clients call due to concerns about cost – as important as cost is, taking the strategic / high-level view can ensure your service, total cost (including hidden costs) and cash flow are maximized.  

Have you started thinking ahead?  If you are interested in our newly upgraded service offering in response to the Amazon Effect of warehousing/ supply chain network assessments, contact us.