Tag Archive: supply chain

JIT Might Not Be What it is Cracked Up to Be?!

April 2nd, 2020

Just-in-time might not be what it is cracked up to be! Certainly, the coronavirus impacts should give us reason to question this rule at face value. Are you running so tight that you only have one bin, pallet or small supermarket to keep your facility running? If so, the question extends to your end-to-end supply chain.

Let’s assume you are a critical manufacturer struggling to produce key items during this coronavirus pandemic. Your suppliers should not be on lockdown since they support a critical infrastructure business; however, that doesn’t mean you’ll be fine. There are many considerations to review:

  1. Source of supply: Are your suppliers located in Asia and unable to staff during the peak of the coronavirus? Do you know what type of delays you’ll experience? Do your suppliers have contingency plans?
  2. Your suppliers’ suppliers: Even if you have a good handle on your suppliers, do you know the status of your suppliers’ suppliers? In an interconnected supply chain, we are only as strong as our weakest link. Who is your weakest link?
  3. Your transportation infrastructure: Even if your suppliers have product, can it get to you? Within what timeframe?
  4. Backups: No matter how well you’ve planned, the question is whether you have backups for critical materials/ ingredients that will ramp up rapidly as needed. Hopefully your supply chain is diversified geographically.
  5. Your customers: Are you in lockstep with your customers so that you are proactively managing demand or are peaks and valleys a surprise? Of course, the coronavirus was unexpected but the degree you fully understand your customers will determine your reaction time to changes in demand.
  6. Positioning of inventory: Do you have critical inventory positioned throughout your end-to-end supply chain?
  7. Your digital supply chain: Are you able to see into your extended supply chain? It could provide quite a benefit at this point.
  8. Additive manufacturing & robotics: Are you able to keep running with less people, socially distanced people and/or print on demand?

Using JIT (or any concept for that matter) without taking a 360 degree view is a bad idea! The cousin of JIT is lean manufacturing. I gained the attention of Wiley by writing that lean is just uncommon common sense (which of course simplifies it in order to make a point), but perhaps it is something to think more about. Have you put all these trendy concepts through a common sense filter? How about a risk filter? Let’s hope so! Otherwise you can be in a critical business and still not producing and running customers out of stock.

What is the answer? It depends! If you have put thought into your supply chain strategy upfront, considered risks, diversified your supplier base, invested in quality checks and top talent, and treated your employees well, it is likely your version of JIT will prove successful. On the other hand, if you saw JIT as a way to reduce inventory and were short-sighted in looking at your end-to-end supply chain and treating your employees and partners as trusted colleagues, you will likely suffer.

Getting ahead of the curve might be the only avenue to success. Consider creating a resilient supply chain and future-proofing your supply chain. Stay tuned and read more about it, and If you are interested in discussing a supply chain assessment, please contact us.

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

Future-Proofing Your Supply Chain

The Strongest Link in Your Supply Chain



Request for Help & Creativity for Manufacturers

March 30th, 2020

Since I relate to several different manufacturing and supply chain organizations, I’ve seen several requests for our expertise. Thus, I am passing them all on so that we can help fight this coronavirus by pulling together our resources and expertise. We are in a new world and need to think innovatively and collaboratively.

Here are the top requests:

  • Thomas Link if you think you might be able to help manufacture critical products
  • Federal Government Request for volunteers who can donate , provide and/or produce large scale quantities of critical supplies
  • Survey for the Inland Empire Economic Partnership
  • Local contacts (Curtis Compton of San Bernardino County) are also interested in if you can help by retooling, repurposing, or supporting manufacturers of safety equipment.
  • CMTA survey – they will have surveys every so often on their coronavirus webpage.

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

Collaboration is no longer a fluffy topic. In fact, it can be the difference between life and death. And we all have the opportunity to have a meaningful impact. We just need to figure out how.

If you are in manufacturing, supply chain or technology, think about what you have to offer. Perhaps you can retool or repurpose. It is heart warming to see that several companies are already doing just that. Or perhaps you have unique skills that are portable to critical industries.  Perhaps you could help critical industries with your expertise. Perhaps you can help connect vital resources to critical industries. Put on your thinking cap and email us or use one of the links above to share your ideas.

And please remember, keep focused. Try not to panic. Look for solutions and don’t be deterred by roadblocks. We are constantly updating our coronavirus resources webpage and so please feel free to share the information and please keep us in the loop of any resources we should add. Feel free to contact us if we can help you during these unprecedented times.



Quoted in the Signal on Restocking Shelves Amid the Novel Coronavirus

March 29th, 2020

I talked with the Santa Clarita Valley Signal on the problems keeping shelves stocked amid the coronavirus lockdown. We talked about the end-to-end supply chain and what impacts the supply chain would have on how quickly the shelves would be restocked. See below for the reprinted article from the Signal.

In an effort to replenish empty shelves amid the coronavirus outbreak, Santa Clarita Valley stores have implemented changes they believe will help keep the products in the hands of customers, but it will take cooperation from the shoppers.

Consumers have scrambled at both the staple and mom-and-pop grocers in search of toilet paper, bottled water, cleaning products, medicine, and perishable and dry goods, as fear of COVID-19 continues to affect everyday life.

Rest assured, however, that stores, from Costco Canyon Country to Ralphs in Valencia, are restocking every day and that there is no supply shortage, many said Tuesday.

At Trader Joe’s on Bouquet Canyon Road, for example, refilling shelves is a daily occurrence, but “we don’t have a say of is what’s coming in,” said a store employee who did not wish to provide a name. “For instance, we might have a little less on eggs on a day than the day before by a couple of cases, but every day, we do get a shipment, seven days a week.”

Similarly, local destinations such as Stater Bros., Vons, Target, Costco and smaller shops, such as Friendly Market on Sierra Highway, said they refilled every day, but what was restocked varied based on what is currently available from suppliers.

Who and how distant their suppliers are can affect how swiftly stores restock, said Lisa Anderson, a Claremont-based manufacturing and supply-chain expert and president of LMA Consulting Group Inc.

“It really very much depends on your particular supply chain,” she said Tuesday. “Certainly, overall, there’s going to be some impact. However, right now it’s more of a bullwhip effect,” meaning consumer demands can cause companies in a supply chain to order more goods to meet the new demand.

Several retailers depend on China, where COVID-19 originated, for supplies, but major, direct disruption might be too soon to tell, said Holly Schroeder, president and CEO of the SCV Economic Development Corp.

“I think people are really dealing with the immediate matter at hand,” she said. “Some companies, since the China trade war, have begun moving or diversifying their supply chain but as the virus affects different countries, you don’t quite know how everything will play out, which creates a lot of uncertainty.”

In the face of uncertainty, retailers are working to control what they can, such as reducing store hours to allow for more restocking time and placing a limit on the number of items customers can purchase in one trip, in an effort to deter shoppers from hoarding.

While they restock, however, customers are asked to do their part, at least one company said Tuesday.

“Now the company is asking for help from its local communities,” Stater Bros. said in a statement. “Please refrain from purchasing items you won’t need for the coming week. Be assured we are working closely with our manufacturers and suppliers to replenish our store shelves daily.”

These efforts can help across the nation, but in the SCV with a huge community-feel presence, now’s the time to “pull together and share some resources that might go a long way,” said Anderson.

“It doesn’t mean that we should be going around standing next to everybody, but find a creative way to help someone out.”

For additional coronavirus information, resources and strategies, please visit the coronavirus resources section of our website.



Supply chain strategy: Modernization tips from Lisa Anderson

March 27th, 2020

As Published in:  Ratelinx

For business leaders looking to modernize their supply chain, the technology investment is the easy part: Evaluate solutions, calculate the ROI, make your business case, and take delivery. Sure, it can be tricky to get sign off on these tech investments, but it’s a business problem with a logical solution.

The more challenging part is preparing your organization to take full advantage of that investment. That means getting people on board, ready for the change, and developing new processes that take full advantage of the new tech.

“High tech must be accompanied with high touch,” says Lisa Anderson, supply chain consultant and President of LMA Consulting Group, Inc. “The most successful supply chain leaders will remember that people are their number one asset.”

We asked Lisa for her perspective on the current state of supply chain, the key trends that are driving change, and how you can prepare your team for what comes next. Read on to learn what she had to say.

Modernizing Your Supply Chain Strategy

The right supply chain strategy includes technological investments, process refinements, and a change management plan for your team. It should be detailed enough to act upon, but flexible enough to account for changing trends. Here’s how to get started.

Key Trends Driving Supply Chain Modernization

For most businesses, there are two factors that make modernization essential. First, there’s sustainability: Consumers are looking to buy from sustainable companies. That means companies are under pressure to not only work with sustainable suppliers, but to prove they’re doing so.

The second factor is perhaps an even bigger driver for change: The demand for near-instantaneous, free shipping for ecommerce. “In the next five years, customers will be expecting Amazon-like service levels at affordable rates, regardless of the high levels of disruption,” Lisa says. “Reshoring, near-sourcing, and sourcing reevaluation will be major concerns.”

Lisa predicts high levels of adoption for new technologies to meet these demands. “The use of technology such as artificial intelligence, IoT, predictive analytics and other technologies will enable meeting these customer needs while maximizing profit and cash flow,” she says.

 

“In these early stages, it’s important to focus in on the
most relevant data to drive decision-making. ” 

Getting Started with a Modernization Strategy

The actual nuts-and-bolts process of building a strategy is the same as solving any problem in your organization. “Start with the outcomes you’d like to achieve,” Lisa says, “then perform an assessment and gap analysis of your people, processes and technology. Assess your change management capabilities to achieve your outcomes. Finally, design the solution and build an implementation team.”

The process may be familiar, but knowing where to start can be a challenge. The first step should be getting a clear picture of your current supply chain. “Start simply and create a dashboard or availability screen that shows your supply chain status; however, remember that if you don’t pay attention to process disciplines, garbage in will result in garbage out,” says Lisa.

In these early stages, it’s important to focus in on the most relevant data to drive decision-making. But don’t try to boil the ocean: “Data plays a vital role; however, do not get sidetracked and overwhelmed with data. Start with your No. 1 priority, find directionally correct data and enable visibility,” Lisa says. “Once your team and supply chain partners understand this data, move to the second largest priority.”

Once you have your supply chain mapped out, you can start to implement solutions that will pay off in the short term and in the long run. A.I. and IoT initiatives have the potential for a quick win. Lisa says in her consulting work, she’s seeing “Artificial Intelligence and IoT used in predictive analytics and forecasting as top priorities. Getting ahead of customer demand drives significant supply chain value.”

Train and Hire the Right Skill Set

For Lisa, the human element is an often-overlooked, but crucial, part of supply chain modernization. “I’ve found that a more dramatic ROI can occur by aligning the people, even more than the data and the process,” she says.

When bringing in new talent, Lisa recommends looking for data science fundamentals. “Data analytics, the ability to leverage ERP systems and think through down-the-line impacts as well as tying business process to systems design are all part of the equation,” she says. “But we should also look at soft skill requirements, such as the ability to collaborate.” Collaboration, big-picture strategizing, and lateral thinking are all essential characteristics of a modern supply chain expert.

The ROI Potential of Supply Chain Modernization

Remodeling your supply chain is not without risks, and it’s a process that takes time and resources to ensure success. But the rewards are worth the effort. “It depends on the situation, of course,” says Lisa, “but it isn’t uncommon to see a five or 10:1 return on investment from supply chain transformation improvements.”



Supply Chain Heroes: How CFOs Can Help Save the World

March 25th, 2020

As Published in: Oracle/Modern Finance

Early this year, the largest asset-management company in the world made a bold announcement: It would start redirecting investments away from fossil fuels because of climate change. In his annual letter to CEOs, BlackRock CEO Larry Fink stated that “climate risk is investment risk,” and that risk is driving a fundamental reshaping of finance.

“Because capital markets pull future risk forward, we will see changes in capital allocation more quickly than we see changes to the climate itself,” he wrote. “In the near future—and sooner than most anticipate—there will be a significant reallocation of capital.”

For manufacturers, retailers, and others that move business or consumer goods, a reallocation of capital will require tighter alignment between the CFO and supply chain leaders. This is already happening among the leading-edge CFOs I meet because they recognize the end-to-end supply chain is driving customer experience, profit performance, and working-capital improvements.

As more companies start reshaping strategy in response to climate change risk, this CFO/supply chain alignment will become more critical to achieving business and environmental goals. In fact, CFOs could find themselves being the heroes of the next decade’s climate-change success stories.

Assessing the payoff for climate change initiatives

CFOs will need to be front-and-center to assess climate change initiatives related to packaging, material handling, transportation, and logistics because changes in these areas tend to have widespread impact.

For example, consumer packaged goods (CPG) companies are feeling the most pressure from climate change activism right now. Packaging is a big target for waste reduction but switching container sizes or materials can have direct and indirect cost implications. There’s a change in direct costs for replacement packaging, but material handling and transportation costs also could shift because of weight, storage, handling requirements, and other relevant factors.

Another example is investment in technology systems. For instance, buying products that are sustainably sourced and handled is important to a lot of consumers, and trust is essential for companies that want to differentiate themselves on this point. New blockchain applications are enabling this verification down to a granular level. While an ideal investment from a marketing point of view, what will the impact be on logistics? Will shipments slow down or speed up? How will the change affect fulfillment and customer satisfaction?

Cloud applications and other advanced technologies have made it easier to conduct real-time analysis and identify upstream and downstream impacts from business decisions like these. Such decisions will require collaboration and ongoing discussions between finance and supply chain leaders to meet all business requirements successfully.

Supply chain health and environmental health are linked

Even if a company isn’t a leader in climate change-reduction efforts, improving supply chain performance will naturally make operations more environmentally sustainable. I’ve seen this over and over again in my decades of working in supply chain management.

Supply chain services and assets are expensive and don’t usually generate cash, so they’re a frequent target of cost reduction. The outcomes of these cost-reduction efforts reduce environmental impact because fewer miles are traveled, inventory replenishes more often and doesn’t become obsolete, and there’s less material waste in damaged goods and over-packaging.

This might be an obvious example, but when you think about on-the-horizon innovations, such as biofuels made from landfill waste and autonomous vehicle and aircraft deliveries, you can see how supply chains could become proactive enablers of reducing climate impact.

Another reason for CFOs to focus on supply chain when developing an impact-reduction strategy is it could help recruit supply chain talent. We’re experiencing a shortage of supply chain professionals across manufacturing, retail, logistics, and a range of other companies. Having a solid stake in climate change-reduction efforts could help attract limited talent, especially Millennials. A recent survey found that 75 percent of Millennials said they would be willing to take a pay cut to work for a company that is environmentally responsible. And nearly 40 percent said they have chosen one company over another in the past because their choice had a better environmental record.

Millennials will comprise three-quarters of the workforce within six years—so statistically, companies with stellar environmental practices will be a top position to recruit talent.

Finance and supply chain: Teaming up for sustainable operations

First and foremost, CFOs want to be good stewards of business assets. For many companies, the supply chain is central to value creation. So, it’s not surprising that CFOs at these companies are paying closer attention to their supply chains from a cost point of view.

Now, climate change is raising risk in ways that require a rethinking of how to grow and protect those assets. As markets begin to respond and shift, supply chain leaders and CFOs will find themselves facing the challenge together.