Tag Archive: SIOP

Raising the Bar With Customer Service Through Internal Operations

August 14th, 2017
Teamwork!

Could a simple solution of aligning Sales with Operations with Finance deliver the bottom line BIG win?

Do your internal operations truly have a significant impact on your customer service levels? Yes, for every single client, they can have a dramatic effect!

For example, we recently worked with a client that wanted to raise the bar when it came to customer service levels. Over time, product mix, distribution strategies and buffer capabilities changed which created a gap when compared to prior performance levels. The challenge was to improve customer service and the overall customer experience rapidly – and “make it stick”.

It comes down to teamwork

As is true with every client we’ve worked with over the last several years – when it comes to customer service, no matter how proactive your front line is with customer communications and no matter what heroics your operations folks jump through to deliver product, the “win” or “loss” will boil down to whether your Sales and Operations are on the same page and executing in concert with one another. For example, if Sales is excited to win large orders (BIG wins) and Operations isn’t prepared for these big wins (not enough people, machines, materials, and the like), service will suffer. Add Finance into the mix who is not likely to be prepared for the cash flow impacts, and the situation can become even more frustrating. As apparent as this sounds, it is extremely common.

Could a simple solution of aligning Sales with Operations with Finance deliver the bottom line BIG win? Yes, every time.

Did you like this article? Continue reading on the topic: SIOP/Integrated Business Planning

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Walmart Raising the Supply Chain Metrics Bar

August 11th, 2017

One of my clients forwarded this Business Insider article about Walmart’s supply chain metrics. Walmart is not only requiring an increase in OTIF (on-time-in-full) delivery performance but it also will charge penalties for suppliers that don’t live up to the metric! Creating an efficient supply chain is critical for Walmart, so they are taking this proactive stance. This is prevalent throughout our manufacturing and distribution clients – regardless of industry.

OTIF

Time is ticking – do you know your OTIF score?


For example, in aerospace, there are very similar supply chain metrics and penalties. If we want to grow our businesses, we must develop excellence throughout our supply chain. Just think, there is no way to deliver on-time if our carriers aren’t on-time. There is no way for our carriers and shipping departments to meet their goals if manufacturing isn’t on time. And, there is no way for manufacturing to produce on-time if our suppliers aren’t on-time…and so on.

What Should We Consider and/or What Impacts Could Arise?

First, if this type of supply chain metric isn’t on your customers’ scorecards, you can expect it will be there in the future. Don’t wait until it is a request – be proactive.  And, if you already receive these types of scorecards from your customers whether or not they are passing on penalties, pay attention. Whether you become a value-added partner and grow the business together will depend on how well you perform. OTIF is becoming “the metric” for measuring on-time delivery performance.  

With that said, I’ve found that being proactive with your customers on the details of this metric can be beneficial as well. For example, if you shipped product on-time but there was a delay in your customer’s receiving department, most customers will adjust the score. With dollars and partnership status at stake, this can be crucial.  

Of course, find out how well you are performing. Dig into the metric calculation and, most importantly, the root causes for your successes and failures. I bet you’ll find a wealth of information in what is most important for you to raise the bar with your supply chain performance overall. Make it visible so that your team knows how well they are performing in your customers’ eyes. Encourage ideas and suggestions for improvement and watch those OTIF scores rise!   

 

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Forecasting: How Far Should You Look into the Future?

July 3rd, 2017
SIOP S&OP

Setting strategy or designing a sales, inventory and operations planning (SIOP) process requires forecasting. How far into the future do you look and why?

Whether setting strategy or designing a SIOP (sales, inventory and operations planning) process, one of the most important questions to consider in forecasting is how far into the future will you look? And why?

As we think about whether the answer should be 1 month, 1 quarter or 1 year, check your thinking. When assessing the future it is important to think through the elements that may impact your forecast.

10 Questions to Ask When Forecasting and Designing SIOP

1. Do you have customer contracts in your business/ industry? If so, how far out do they go?

2. Regardless of the commitment level, how far out do you have information that is somewhat reliable? If it changes substantially from month-to-month, is it of any value?

3. How reliable is your forecast by product or customer grouping? Forget about items and sku-level forecasts. How about product category forecasts?

4. Do you have access to demand data into your supply chain?

5. Are you asking questions about what is coming down the pike? If not, why not?

6. How much cushion do you have? Do you have inventory or capacity availability?

7. How prepared is your supply chain? Can they handle volume spikes?

8. Are you willing to dedicate people to gain a view into the future? Why or why not?

9. Have you considered a strategic sprint? Why are you setting arbitrary time frames when customers don’t care what you do? They want what they need when they need it.

10. Are there downsides to looking too far into the future? What are they?

 

Did you like this article? Continue reading on how to strengthen your Eagle Eye:

Forecasts Are Always Wrong So Why Bother?

4 Excel for SIOP Success

 



Duke University & CFO Global Outlook Survey Suggests Optimism

March 23rd, 2017

According to CFO, Duke University and CFO Global Business Outlook Survey suggests strong optimism! In fact, the survey’s optimism index for the quarter jumped to 69 (on a 100-point scale) which is the highest level in 14 years. This is also significantly higher than the long-run average of 60. Businesses are optimistic.

61% plan to increase their payrolls this year and 4% wage hikes are expected. Even more noteworthy is that capital spending is expected to increase by 6% vs. a median of 3% and a flat/negative spend in 2016. Are you ready?

business optimism

What Should We Consider and/or What Impacts Could Arise?

Good news abounds. However, the tricky part is that the vast majority of our clients struggle to sustain successful growth (profitable, high service levels etc.). We don’t enjoy layoffs and recessions but they can be simpler to manage. Are you ready for growth?

Our most successful clients prepare for growth. They invest in infrastructure with enough lead time to implement successfully BEFORE they must have it. This could refer to systems, technology, people, training and development, process improvement techniques, culture and change initiatives and more — of course, it depends on your business. Undoubtedly, this is easier said than done! One of these initiatives that is geared especially well to growth is SIOP (sales, inventory, operations planning). SIOP programs are focused on forecasting demand, collaborating with customers and aligning with staffing, capacity, systems and process infrastructure, training and development and so on. If you’d like to talk about preparing for growth, contact me.

 



The Calm After the Storm

January 23rd, 2017


While driving up the street to my house on the way back from driving both directions to the port of San Pedro for a port tour in a horrific storm (for Southern California), I see the calm after the storm. Southern Californians know just how challenging the rush hour freeways can be in a rain shower, and so it is especially significant to see the beautiful effects that can come from such havoc.

How many times do we get caught up in some sort of storm at work (ERP implementations, merger or acquisition, a major change project such as a lean transformation or SIOP initiative) and fail to appreciate the calm after the storm – and celebrate the results?

 

One tip to implement this week:

Unfortunately, we all can probably think of many, many storms in our work life without prompting. If we keep our eyes on the goal even in the worst of it, we’ll see the sun shine through as we complete a milestone or as we drive it home.

While in the midst of a storm this week, remember to keep focused on the goals. Provide a visual of those goals to your team, colleagues and partners. Create a visual if you don’t have one. Generate some excitement about the next milestone. Soon, you’ll emerge on the other side and you’ll see the skies open up and your end results shine through.

 

Looking for more ideas to keep your supply chain connected? Access more tips and resources on my blog. And keep connected by subscribing to my newsletter and email feed of “I’ve Been Thinking…”