Tag Archive: SIOP

Manufacturing Expert, Lisa Anderson, Notes Workforce Talent and Suppliers are Critical to Stabilizing the Supply Chain

August 24th, 2020

CLAREMONT, CALIFORNIA – August 24, 2020 –  Manufacturing and Supply Chain Expert,  Lisa Anderson, MBA, CSCP, CLTD, president of LMA Consulting Group Inc., tells companies to recognize  workforce talents and take time to partner with the right suppliers. LMA Consulting Group works with manufacturers and distributors on strategy and end-to-end supply chain transformation to maximize the customer experience and enable profitable, scalable, dramatic business growth.

“Stabilizing the supply chain has been critical these last few months for manufacturers and distributors.  This has been necessary to minimize volatility and keep goods flowing, in turn, fulfilling customer expectations. Customers understand that these are different times, but they will be patient only so long.  That is why it is critical to get the supply chain stabilized,” Ms. Anderson explained.

In past communications, Ms. Anderson has suggested understanding demand by connecting with both the customer and the customers’ customers.  She has also discussed realigning demand with supply through the SIOP process (Sales, Inventory and Operations Planning). Yet, the most critical component in solving problems, disruptions or even expansion of the supply chain is a company’s talent. “I often ask our clients who in the organization, which disciplines and levels, is involved in the SIOP process and collaboration with customers and suppliers. If the answer is simply Supply Chain or Operations, they are missing out on solutions that their talent can bring to the table, and even more concerning is the potential loss of talent due to the lack of involvement in meaningful activities. I also ask about the depth of talent and cross-functional capabilities within a discipline. This is telling, especially when complex solutions are required to satisfy key customer requirements or resolve a situation within the supply chain.  And, one of my final questions lies in the determining the kinds of relationships the company has with suppliers.  Employees and suppliers can create new solutions or products and be champions of an organization,” she continued.

With high levels of ambiguity and volatility, the leader’s role is more important than ever. Ms. Anderson suggests three ways to immediately leverage talent to stabilize the supply chain. “Talent is key to stabilizing the supply chain. 1) Get your salespeople and your customers involved in the forecasting process. Sales tends to be on the outskirts of demand and supply. They need to be as involved and accountable in the demand planning and fulfillment phase as they are in generating orders. 2). To stabilize internal operations, fill gaps and keep teams focused on the customer while maximizing efficiency, formal and informal leaders must monitor progress, adjust plans and stay on top of morale, training and developmental needs. 3) Do not assume the past will repeat. Deep dive into critical supplier relationships and future viability. Make sure you have the right supplier partners, not simply the least costly vendors, and track progress frequently. And, make sure you do not have all of your eggs in one supplier basket” she concluded.

Ms. Anderson recently released a short video, What’s Happening in Manufacturing & Supply Chain: Consider Your Top Talent. Ms. Anderson has also released, Future-Proofing Manufacturing & the Supply Chain Post COVID-19, an eBook that provides practical go-forward insights, advice and experiential value.

 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 is a recognized Supply Chain thought leader by SelectHub, named a Top 40 B2B Tech Influencer by arketi group, 50 ERP Influencer by Washington-Frank, a 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, 101 strategies for creating bold customer promises and profits. A regular content contributor on topics including 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 | KMcEntee@KMcEnteeAssoc.com



Why SIOP is Critical to Thriving During & Post COVID

August 12th, 2020

COVID-19 has disrupted every business. Some are growing far faster than supply can keep up, while others have dropped like a rocket. Still, others have almost identical dollar volume yet double the number of orders at half the order size, creating significant disruption in warehousing, shipping and transportation. And yet others might have less severe changes in volume with certain customers thriving and others dormant – all creating mix disruption.

The supply side is no different. Previously reliable suppliers can be suspect at best. Previously high-quality, low-cost suppliers have skyrocketing costs as airfreight is required to keep customers’ satisfied. Risks have increased dramatically with the uncertainty of cash flow and long-term ‘institutions’ of the industry are disappearing overnight. With this high level of disruption across both demand and supply, misalignment has run rampant, costs are increasing and customers are frustrated.

SIOP (Sales, Inventory Operations Planning) Cuts through the Disruption
You know the story. The busier we get, the less we have time for improvement yet we spend double or triple the time to achieve the same outcome because we can’t set aside the time required to start or maintain an improved process. I’ve been there and am familiar with the excuses! With that said, STOP and look around you. You are on a hamster wheel with no end in sight. Implementing SIOP, even if simplified to what is achievable under current conditions, cuts through the disruption to stabilize your supply chain.

What is SIOP?
Quite simply, SIOP is about finding a way within your environment to realign demand with supply. You have to start with demand or you will forever chase your tail. To simplify the best practices across industries (aerospace and defense, building and construction products, food and beverage, healthcare products), geographies, company sizes that apply to manufacturing, supply chain, logistics and service organizations with supplies, you should focus on these keys:

  1. Proactive management of demand: Talk with customers.  Find out about your customers’ customers and every customer type within your channel until you get to the end customer (consumer, business using your product, patient). Ask about and observe evolving customer needs. Review historical trends.  And, put a stake in the ground with a starting point forecast. Outcome: typically 12-18 month rolling forecast
  2. Proactive management of internal supply: Talk with your internal teams. Understand changing capacity and staffing levels (manufacturing, warehousing). Realign temporary and contract assistance.  Understand your resiliency to changing demand (overtime, increasing staffing, efficiency improvements, maintenance and engineering support, etc.). Realign with R&D/product development requirements and your support resources. Outcome: typically a capacity plan (production, storage), high-level staffing plan and key decision plan (make versus buy, product/customer transitions, machinery and equipment plans) for at least as long as your longest lead item – 12-18 months.
  3. Proactive management of supply partners: Talk with suppliers. Find out about your suppliers’ suppliers capabilities, their likelihood to meet schedules, ability to meet cash flow needs and risk of shutdown (whether temporary due to COVID-19 or another disruption or permanent (going out of business)). Outcome: typically a sourcing and supply plan by key suppliers/ commodities for at least as long as your longest lead item – 12-18 months.
  4. Proactive management of your logistics network partners: Talk with transportation partners, brokers, 3PL/ 4PL partners and understand the extended supply chain, potential risks, possible options as disruptions occur, etc. Outcome: typically a logistics network and goods movement plan for at least as long as your longest lead item – 12-18 months.
  5. Take stock of inventory: Do you have strategic stock of critical items? Items without a robust backup supplier? Items in countries of higher risk of shutdown? Are you so busy running in circles that your slow moving and obsolete is expiring under your nose? Outcome: typically an inventory investment plan for 12-18 months.

Pre-COVID-19, clients went through a SIOP cycle with a monthly cadence. The typical processes included:

  1. Demand review meeting
  2. Supply review meeting
  3. Alignment of demand and supply (not always requiring a meeting)
  4. Inventory review meeting (often incorporated into the supply meeting)
  5. Executive SIOP review meeting (in some cases, quarterly made sense)

During COVID-19, we have taken these same concepts and adjusted to changing conditions. No two clients are alike in what makes sense to rapidly realign demand and supply and maintain this alignment.  Yet, there is one item in common across the board:

A weekly alignment on just the critical customers, internal resources, suppliers, logistics network partners and review of inventory

Read more about SIOP and related concepts in our eBook, Future-Proofing Manufacturing & Supply Chain Post COVID-19. If you’d like a rapid assessment and recommendations for your situation, please contact us.

 

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

Future-Proofing Your Supply Chain

Eagle Eye Strategic Focus



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



Do You Know Your Demand?

October 23rd, 2019

This has been emerging as a hot topic. As clients are interested in meeting ever increasing and changing customer expectations while managing long supply chains, changing rules and regulations (including tariffs), and concerns over the cash flow implications of high inventory levels have resulted in discussion around the critical importance of demand. Do you have a handle on your demand plan over the next 12 months?

According to Gartner, every 1% improvement in forecast accuracy will result in 7% less finished goods inventory and 9% reduction in inventory obsolescence. A 1% improvement is imminently doable! Also, according to the experts, a 15% improvement in forecast accuracy will drive a 3%+ increase in pre-tax performance. Last but not least, in our experience, it is one of the best ways to drive a simultaneous improvement in customer service, cash flow and profit.

Every client we talk with says the same thing: Our sales are unpredictable. We have a custom business. We follow lean principles and produce in concert with customer demand. Or, our sales team is on top of it and are already doing everything they can to give us a heads up on demand. We don’t doubt that. However, we have also never come across a situation that couldn’t be improved. With the dramatic results that follow, it proves well-worth the effort.

Instead of brushing off the idea of focusing attention on demand, just think about what could be improved. It isn’t an exercise to beat up sales or planning. In the end, if that is what happens, there is no doubt that is part of the issue. The forecast must be collaborative with input from sales, marketing, customers, planning and anyone who interacts with customers or has input relevant to future demand. With that said, the best forecasts start with a simple statistical base. What do you do?

I’d be remiss if I didn’t point out that you should use your forecasts in your S&OP/SIOP process (sales, inventory, and operations planning) to align your demand with your supply so you can maximize your customer value and your bottom line. If you’d like to discuss your situation further, please contact us.

 

What bottlenecks exist in your organization?



Manufacturing Expert, Lisa Anderson, Sees Impacts of Artificial Intelligence on Manufacturing Profit, Inventory Levels and Cash

September 20th, 2019

Manufacturing Expert, Lisa Anderson, Sees Impacts of
Artificial Intelligence on Manufacturing Profit, Inventory Levels and Cash

CLAREMONT, CALIFORNIA – September 19, 2019 –  Manufacturing and Supply Chain Expert,  Lisa Anderson, MBA, CSCP, CLTD, president of LMA Consulting Group Inc., predicts that artificial intelligence (AI) and human learning will impact most aspects of manufacturing resulting in improved profits, inventory levels and cash.

“Our manufacturing clients have really embraced the power of AI since the first of the year.  From improved forecast accuracy impacting inventory levels to more openly working with changing customer needs and the overall customer experience, manufacturers are seeing the effects of using this data,” Ms. Anderson commented. LMA Consulting Group works with manufacturers and distributors on strategy and end-to-end supply chain transformation to maximize the customer experience and enable profitable, scalable, dramatic business growth.

“Despite the fact that manufacturing, especially in Inland Southern California continues to be strong, manufacturers need to be smart. By integrating AI with tried and true techniques such as SIOP (Sales, Inventory and Operations Planning) and taking advantage of predictive analytics and other human learning technologies in conjunction with ERP systems, manufacturers can become better at forecasting and exceeding customer expectations.  In fact, for every one percent improvement in forecast accuracy, there can be a seven percent improvement in inventory levels and therefore cashflow,” she said.

In an effort to support clients, Ms. Anderson is active with the Board of Directors of the Inland Empire Economic Partnership, where she represents the Logistics Council whose initiative is developing a consortium for logistics, supply chain and advanced manufacturing success. “AI and other forms of technology are transforming manufacturing as we know it. From reevaluating sourcing and enabling robots to predictive maintenance and shortened design times, AI offers up vast potential. Successful manufacturers are strengthening their hold. Supply chain and other manufacturing professionals are sharpening their skills to take advantage of these resources. It takes work, smart management and a strong team to be successful. A perfect storm for manufacturing success. The evidence is in the growth we see in Inland Southern California (also known as the Inland Empire),” she 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 is a recognized Supply Chain thought leader by SelectHub, named a Top 40 B2B Tech Influencer by arketi group, 50 ERP Influencer by Washington-Frank, a 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, 101 strategies for creating bold customer promises and profits. A regular content contributor on topics including 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 | KMcEntee@KMcEnteeAssoc.com