Tag Archive: strategic

Why Southwest Customers Wouldn’t Buy a Bentley

July 24th, 2019

After giving 10 speeches on pricing and profits to groups of CEOs, it is certainly top of mind. Yet, it should always be top of mind for executive teams. One unanimous finding from the informal research of executives is that pricing is a strategic topic.  So, we must find time! When is the last time you focused on pricing?

Whether you consider pricing a strategic topic or not, it will directly impact your business. Let’s start with three typical options from a branding point-of-view.

  1. Low price leader – Southwest and Walmart are great examples of this. No one flies Southwest to have a first class experience. Instead, they are accessible to the general public and fun to fly. Their prices have to match their brand, and low prices do NOT equate to lower profits. Southwest has been consistently profitable when the higher priced airlines weren’t!
  2. Luxury brands – Similar to the low price leader, a Bentley or Gucci denotes the luxury image. If you found a low price on a Bentley, you would definitely think it was a lemon. In the B2B world, the same holds true. We work with a high quality lawn and garden equipment and tools supplier.  Their prices have to remain higher than the low cost brands to maintain their image and customer base. Of course, they need to provide more education and value for their customers as it is what they expect.
  3. Customer focused – In this case, the brand is all about the customer.  These companies are known for going the extra mile and providing superior value for their target customers. If it is all about value in the eyes of your customer, don’t you think your price better align to this value? Of course! If not, it is the epitome of the opposite of the brand.

Have you thought about your strategy and whether it relates to your pricing? It is easy to get caught up in competitive pricing situations and start to lower your price.  However, it might be the time to take a step back and see whether what you are doing matches your branding and strategy.

For example, one CEO provided an example of when she was a VP of Sales at a significant company. They had a niche product with unique value and higher prices. The sales teams were starting to see competition and thought they had to reduce pricing slightly to maintain their position.  The CEO said ‘no’. They were the leader and had value their competitors didn’t. It was a really hard process for the sales team to go back and talk value instead of giving in on price but they managed it. Fast forward to the next year. They were successful in maintaining their prices and didn’t lose business. Instead of falling into price war thinking, they talked about value.

What Do We Need to Think About Related to Strategic Pricing?

From an 80/20 perspective:

  • Who is your target customer? Think about your answer. Hopefully, it isn’t anyone willing to pay for your product or service! Yet that is an easy trap to fall into. Instead, take a step back and think about your target customer. What is their profile? How many current customers are target customers?
  • What do your target customers value? Although we tend to spend 80% of our time on 20% of our customers, the key question is whether these are the target customers. Do we know what our target customers value? Don’t think about your customer base and your daily interactions to answer this question. Instead, think only about your target customers. If you don’t know, find out! Being clear on this alone will yield dramatic results.
  • Is your pricing aligned with your target customers and their expectations of value? This is a tricky one. In our experience, 80%+ of our clients have room for improvement when we get to this point. It also changes over time.  If you last put thought into this even a year or two ago, you are acting on old information!

There is vast opportunity to keep pricing top of mind as it relates to your strategy. Why do this? It is a top strategy to ensure customer value (to grow your business) and increase bottom line profits simultaneously. If you are interested in a pricing & profits assessment, contact us.

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How Are You Keeping Up?

July 9th, 2019

In today’s Amazon-impacted, data overloaded world, it is one BIG challenge to just “keep up”. How are you keeping up with the latest industry trends, noteworthy products, emerging technologies and more?

It would be easy to spend 40 hours a week just “keeping up”. Of course, I wouldn’t recommend that as your competition would be happy to speed on by. However, this idea got me thinking about how executives should “keep up”.

Time isn’t a resource. We cannot make more time. On the other hand, time is a matter of priority. When we answer, “I don’t have time for that,” it means we aren’t prioritizing that topic or that person. We cannot prioritize everyone and every topic including how to stay up-to-speed.       

A few recommendations for executives to stay up-to-date on relevant information without taking “too much” time:

  • Make it a priority for your team to stay up-to-date.  If each of your team members is up-to-date on relevant information for his/her area, it will be half the battle. Ask for a bullet point summary of highlights.
  • Talk with customers.  One priority you cannot delegate is a certain amount of customer interaction and discussion on trending topics. How else will you steer the ship?
  • Attend key industry conferences. Typically, there is a flagship industry event our clients attend. No matter how busy, make room in your schedule to attend, meet with customers and suppliers and find out what is trending.
  • Focus some attention on your strategic differentiation. For example, a few clients are expert at sourcing. Thus, they better put some focus on this topic. Others are expert at manufacturing, e-commerce or a technical topic. Stay abreast of key trends.
  • Skim industry articles & the Wall Street Journal. Staying current on key events and how they could impact your industry and your company is essential.



People & Robots Can Co-Exist Successfully

May 23rd, 2019

We held an engaging executive panel discussion at our APICS Inland Empire spring symposium on the topic: “The Talent Transformation: People or Robots? There is quite a lot of hoopla in Inland Southern California as this geography is larger than all but 24 states (and soon will take over Lousiana) with a strong manufacturing and logistics base.  Yet, the threat and opportunity of automation is close at hand. According to a University of Redlands study, most large metropolitan areas are subject to losing 55% of their current jobs due to automation. In Inland Southern CA, that number expands to 62%. What will this mean? Disaster or opportunity?

According to a robotics expert with a background in industry, Carnegie Mellon and Harvey Mudd, the CEO of the Inland Empire Economic Partnership (IEEP), a Director at Honeywell and a recruiter and practice lead at Aerotek, we can rest assured that people and robots can co-exist successfully. Of course, this assumes we are proactive in thinking about automation, retraining and educating our workforce and providing the insights and collaboration opportunities such as the executive panel event.

We had some probing questions from the manufacturing and distribution professionals in the audience, but it was unanimous that a solution exists. We also talked about Middle Harbor which is a high-tech area of the ports. This has proven more challenging as negotiations have put some people out of a job yet still getting paid for it. With that said, there were many examples of success with business growing 3-fold while the company doubled the workforce and more. Hiding under a rock is definitely not the route to success. Instead, be a part of the collaborative effort.

As a Board member of IEEP and a supply chain expert, I am helping to lead a consortium for advanced manufacturing and logistics success to address just this topic (resulting from the Brookings study research). If you are interested in staying in the loop with updates, please email me. I’ve created a special interest list for this topic.

The students from Harvey Mudd presented some exciting robotics research they are conducting with industry on how to successfully navigate cluttered workspaces (as most manufacturing and distribution clients require). Much progress is being made.  And, robots aren’t going away. There are many positives in terms of consistency of quality, replacing competitive motion tasks, reducing workers compensation and labor risks in addition to cost savings. With that said, there are also some challenges to overcome such as what happens when technology goes wrong (like with the Boeing 737 Max). There is always risks to mitigate and people who are overlooked. The panel discussed the Challenger disaster and the employee who warned ahead of time to the technical glitch.

What are you doing to evaluate technology from a strategic standpoint? Will you be left in the dust? Grocery stores might have been a bit complacent before Amazon bought Whole Foods. Are you complacent? On the other hand, please don’t follow fads. When everyone thought outsourcing was great and Boards insisted on following the trend no matter the total impact, several companies outsourced and were sorry later when service went down and costs weren’t saved. If you’d like an assessment, contact us.

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Manufacturing & Supply Chain Expert, Lisa Anderson Considers ERP, CRM and Related Systems Key to Enabling Growth

May 7th, 2019

Originally published on ExpertClick on May 2, 2019

CLAREMONT, CALIFORNIA (May 2, 2019) –  Manufacturing and Supply Chain Expert Lisa Anderson, MBA, CSCP, CLTD, president of LMA Consulting Group Inc. considers internal and collaborative systems to be critical to short- and long-term growth for manufacturers and distributors. Systems must be able to support scalability and sustainability, enabling a resilient supply chain, superior customer experiences and peak financial performance.

“In today’s Amazonian environment, customers expect rapid delivery, over and beyond cradle to grave, collaborative service, 24/7 accessibility and last-minute changes. Executives are realizing their technology infrastructure must be able to meet and exceed these customer expectations while driving bottom line improvement” notes Ms. Anderson.

ERP, CRM, e-commerce, customer portals and related technologies are integral to success. “Many times, the systems are blamed for internal issues or challenges. Sometimes, it’s because they are out of date or a hodgepodge and don’t support the business.  Other times, the systems have the capabilities but are just not being used properly. We have seen clients ready to ‘throw out’ a perfectly suitable ERP system because they think the system is the problem rather than how it ties with the people and process” she continued.

Ensuring that the executive team is involved in ERP and system evaluations from a strategy viewpoint is critical.  “Since the system will impact market share, customer experiences and bottom line results, it is key treat ERP as a strategic priority,” she said.  Internal systems should reflect business objectives, cultural norms (entrepreneurial vs. approvals) and multi-department requirements and priorities. In today’s Amazonian environment, the only way to thrive is to leverage advanced functionality to automate, collaborate and utilize predictive analytics to make sound business decisions to set strategy,” Ms. Anderson concluded.

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, including ERP evaluation and selection. “ERP is a tough topic. Clients worry they are too small, or it will be too expensive. Meanwhile, the competition passes them. Using technology that supports a superior customer experience without breaking the bank is a “must”, regardless of size or industry” she concluded.

LMA Consulting Group just released the findings of manufacturing executive predictions for 2019:  “Manufacturing & Supply Chain in the New Normal” (available at no charge). 

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



ERP Selection: Why It Has Become a Strategic Priority

April 18th, 2019

In today’s Amazonian environment, customers expect rapid delivery, over and beyond from cradle to grave, collaborative service, 24/7 accessibility and last-minute changes. Executives are realizing they must upgrade their technology infrastructure to meet and exceed these customer expectations while driving bottom line improvement.

Your ERP decision will be one of the most significant investments your company will undertake, and these projects are wrought with risk. 80% fail to achieve the expected results yet waiting “too long” can put you out of business.

Selecting an ERP System is a Strategic Priority
Because of the significant customer and bottom-line benefit and steep, unintended consequences associated with these projects, the most successful clients realize they must be a strategic priority. By no means should the decision by relegated to a technical expert or project manager. Involve your best and brightest on the team and ensure your executive team is on top of preparation, progress and the inevitable pitfalls – beginning with preparation:

  • Understand business processes: Start by understanding what occurs on a day-to-day basis. One of the top failure points is to assume that people can make the leap from current processes to what every ERP provider claims to be “best practices” on day 1 with no roadmap.
  • Gain strategic and cross-functional input – Since all systems will perform the basics well, success will boil down to what drives your strategy and supports your cross-functional and cross-organization collaboration.
  • Identify critical requirements – Countless hours wasted on typical business requirements (which all systems generally cover); instead, focus 80% of your attention on the requirements unique to your business, industry, and company. Think customer differentiation & profit drivers.
  • Prepare data and be realistic evaluating your process disciplines – No matter how well you prepare, your system will only be as good as your data and process disciplines.
  •  Dedicate appropriate resources – Be an exception. Supplement your resources, bring on appropriate expertise early on and be willing to invest in what will ensure success and mitigate your risk.

5 Critical Factors in Selecting ERP Software

As complicated as most companies seem to make it, the critical factors in software selection boil down to a select few:

  1. Your business objectives – Don’t worry about everything required in every module to run your business. Instead, take a step back and focus on what you need to meet your grow and profit plans.
  2. Cloud or not?  It depends. Dig into the details. Develop your own spreadsheets with paybacks. Consider your technical resources, adeptness with topics like cyber security and the latest technology, and your ability to navigate disruption and risk.
  3. Understand your culture – What are your cultural norms when it comes to change? Do your employees have an entrepreneurial spirit or do they require strict procedures? These answers will be integral to aligning culture and technology.
  4. Think about design upfront – Not thinking through down-the-line implications will derail the best of projects. Incorporate design and a holistic systems-view upfront.
  5. Ballpark estimates and ranges – Get a ballpark upfront, and never accept the first estimate. It’s typically too low! Worse yet, two suppliers that should be within 10% of one another can be 100% different. Ensure you are comparing apples to apples, and remember implementation, not software, is the 80-pound gorilla of ERP success.

ERP is a tough topic! Clients worry they are “too small” or it will be “too expensive”, and in the interim, the competition passes them by since having the technology that supports a superior customer experience without breaking the bank is a “must”, no matter your size or industry. With that said, we have seen clients ready to “throw out” a perfectly suitable ERP system as they think it is the system, not the process or people that is the issue when it isn’t.

If you’d like an expert to assess your situation to partner with you to achieve these types of results, contact us. 

      

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