Tag Archive: supplier

Ramping Back Up

August 22nd, 2020

We are seeing business just beginning to ramp up. As said in our eBook, Future-Proofing Manufacturing & Supply Chain Post COVID-19, this is not an on/off switch. We should turn the dial carefully (as quickly as possible while accounting for the end-to-end supply chain). Every situation is different.  Yet, common concepts exist and preparation is required. A few highlights include:

  • Employee readiness: There are several rules and regulations in addition to considering your employees’ mindsets and readiness.
  • Customer readiness: Clearly, without predictable sales volume (at least to an 80/20 standpoint at a high level), it is impossible to know what to produce, purchase, store, prepare cash reserves etc.
  • Supplier readiness: Of course, no matter how ready our customers and employees, if our suppliers aren’t ready (and our suppliers’ suppliers), nothing will be accomplished.
  • Financial readiness: It sounds obvious but we also need the cash to operate our end-to-end supply chain successfully.
  • Risk tolerance: We are pushing clients to assess risk to make prudent decisions.  Yet, in order to be successful, they will have to take on additional risk. A no risk policy will result in bankruptcy!
  • Resiliency: Start the process of future-proofing your manufacturing and supply chain and make a commitment to continuously improve. Without this mindset, do not turn the dial.

Your most important job in the foreseeable future (minimally 9-12 months) will be to navigate this ramp up to the new un-normal, and even more critically, the most successful clients will take the bull by the horns and create their future.



Amazon Kicks off the New Year by Creating Disruption

January 30th, 2020

According to a Bloomberg article, Amazon kicked off the New Year by creating disruption. They have abruptly stopped buying products from some of their wholesalers, looking for ways to bypass wholesalers or push the cost to down the chain and increase profit. If your business depends on Amazon, hopefully you have been future-proofing your manufacturing and supply chain operations.

If not, you might be in a world of hurt! With that said, if you are heavily dependent on any one customer or supplier, you are in a risk-ridden situation.  It makes me wonder whether FedEx’s move away from Amazon was brilliant or whether they took on too much risk moving away from Amazon. Listen to a recent video where I refer to this topic. Are you taking these types of strategic questions into account in your 2020 plans?

What Should We Consider and/or What Impacts Could Arise?
Although the impact is obvious to wholesalers cut off by Amazon, the impacts are more widespread than that. Will Amazon be able to go direct to manufacturers? Will they be able to increase profits by squeezing their supply chain without impacting service? What happens, if that isn’t as easy as it appears? Will customers just wait? Are they getting too big or will other e-commerce players have an opportunity? It will be interesting to see.

In addition, no matter if you are related to this industry or not, it will impact you! If new players become involved, the manufacturing and logistics footprints will evolve. Will you be ready for opportunities? Undoubtedly, we will be impacted by changes in logistics infrastructure, rates and service requirements. The question is whether we will let this happen to us or if we will proactively address it. It might be too late to future-proof against this particular move by Amazon, but there will be countless more changes coming by Amazon as well as many other disruptors. Will you be ready to navigate changing circumstances and market conditions for a positive customer and bottom line impact or not?

At a minimum, continually re-evaluate your supply chain road map and think through related impacts. These topics certainly relate to our new LMA-i, LMA-Intelligence series including the Amazon Effect, the Resilient Supply Chain and Future-Proofing and contact us if you’d like an assessment path-forward plan to accelerate your bottom line and customer performance.



Amazon Disrupts Again

April 5th, 2019

According to Bloomberg, Amazon disrupts again. They have abruptly stopped selling products from their wholesalers and are instead encouraging suppliers to sell on their marketplace, transferring the purchasing, storing and shipping of products to the supplier. The marketplace business is already estimated at $250 billion in value which is more than double the online retail business. They also pulled volume from some suppliers less than $10 million annually. If you are in either of these positions, this could be a substantial disruption especially with no notice!

According to the Journal of Commerce, Amazon is also disrupting container shipping with its increased use of its ocean forwarding arm. For example, with its non-vessel-operating common carrier (NVO), Amazon is gaining greater control over its internal supply chain but the key is whether it is thinking about building a supply chain platform.

Amazon isn’t the only disruptor. Are you proactively thinking about navigating disruption?

What Should We Consider and/or What Impacts Could Arise?
Hardly a day goes by without some sort of disruption, natural disaster or other event such as the Boeing 737 Max concerns. There is no way you can be prepared for every potential issue that will arise. With that said, it is remiss not to consider the most likely and relevant risks. Do you have a process to incorporate these into your strategy and execution plans on a frequent basis? Gone are the days of the 5 year strategy, updated once a year. Business is moving at a much quicker speed!

In addition, start looking at how to build an agile and resilient end-to-end supply chain. Start internally. Are your people prepared for the daily, weekly and monthly changes most likely to impact your business? Do they have backup plans? Or will it take a lengthy approval process to get a critical decision made to navigate disruption? Don’t just assume you are covered. Go and find out. If you’d like some tips for managing disruption, take a look at our resilient supply chain series.

 



Do You Have an Eye to the Future?

February 9th, 2018

Do you have an eye to the future?  Don’t just answer yes and move on.  Take a few moments to consider this question.

In today’s Amazon-impacted world, if you miss a few months buried in your isolated internal world no matter the reason, you might miss a noteworthy event, trend or comment that could put you behind the 8 ball with no hope of catching up.

A 3-5 year strategy session once a year NO longer cuts it.  We are all in a strategic sprint.  In most industries, even going beyond one year out is a wasted exercise.  Instead, we should keep an eye to the future and build agility into our strategy setting process.  So, what are some ways we can keep an eye to the future?

  1. Pick up the phone and call a customer – Those clients who talk frequently to their top customers are far more successful than those who don’t.  Of course everyone is busy.  Offer value and make it is your customer’s best interest to keep in touch.  You’ll know more about what’s going on in the marketplace than those buried in month-end numbers, Board meetings and strategy sessions.  
  2. Attend an industry conference – Why do all the work yourself?  Network with those who are uniquely positioned to keep track of the latest trends and what might impact your industry.
  3. Have lunch with an old alumni friend –  You might wonder how this would help if your friend isn’t in a related field or isn’t a business owner or executive.  Keeping an eye on what’s happening in the world around you and gaining insights from trusted colleagues in different industries can provide some unique perspectives you won’t gain anywhere else.
  4. Involve your team in keeping an eye to the future – Certainly, if you provide the vision to your team (no matter the level), explain how the company is performing and encourage them to keep an ear to future trends, people will be happy to contribute to success.  We find that the best trends can come from unlikely places – the secretary you didn’t even notice or the person shipping orders who talks with UPS drivers.
  5. Watch the latest trends globally, economically– We are often surprised by how seemingly unrelated events throughout the world will impact suppliers, transportation channels, exchange rates or something else that will have a direct impact on business.  Subscribe to newsletters that can keep you up-to-speed on highlights, read the Wall Street Journal, talk with colleagues etc.
  6. Go visit a supplier– Don’t assign this to your procurement professionals solely.  Suppliers and trusted advisors can provide a wealth of knowledge that can help you navigate your path forward successfully.
  7. Join a CEO or key executive group – The problem with being at the top is that there is no one to talk to.  Find a new group of peers to ask the hard questions and keep you on track.

When you have a good idea of the future, you will position your company, your people, your processes, your infrastructure, your supply chain and more for success!



Are You Stuck in Silo Thinking?

December 6th, 2016
avoid silo thinking

It is easy to narrow your thinking and stay focused on work at hand, but we need to get our head out of our operations and think big to innovate and grow.

We not only work across many manufacturing and distribution industries such as aerospace, building products and food but we also work across company-sizes ranging from small and medium size owner-operated companies to medium size private equity-backed firms to large, complex, global organizations. Thus, as we see trends across each of these segments, we pay attention. Unfortunately, silo thinking is commonplace.

Traditionally, silo thinking refers to thinking from your department-perspective and not looking cross-functionally; however, we also see vast examples of silo thinking from the company perspective. In this case, the organization falls into the trap of thinking internally and not thinking about supplier and customer impacts. And, it could mean that we think U.S. centric, even though we’d bet significant dollars that no one has a 100% U.S. centric extended supply chain. We need to get our head out of our operation and think BIGGER.

In today’s Amazon-impacted marketplace, extended supply chains are more interconnected than ever before. Thus, we must be aware of the impacts of our decisions on the rest of the supply chain. Actually even more important than remembering impacts, we can grow revenue and profits by looking for opportunities and unmet needs across our extended supply chain. Think about why we say “a supply chain is only as strong as its weakest link”. Anyone with a problem supplier might have learned this the hard way!

A natural extension of this thinking leads us to remembering that although English is the most spoken language in business settings and even though the U.S. is a big and generally affluent market, there is something to be said in remembering that 95% of consumers live outside of the U.S. And, since our supply chains extend throughout the world, we must be able to have conversations about global impacts, cultural differences and strategic priorities. Flip your silo on its head.

P.S. On a related note, we are going to kick off two new newsletters shortly — one for clients only that discusses these types of thought-provoking topics and one on the latest supply chain trends and news and how to apply it. We’ll keep you in the loop on how to receive them.

 

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

Cross Functional Success 

The Hidden Benefit of Observation