Tag Archive: warehouse

Technologies of Disruption & E-Commerce

March 19th, 2018

I participated on the Amazon Effect: Play or Pass Panel at the Manufacturers’ Council of the Inland Empire’s Manufacturing Summit.  B.J. Patterson, Dan Vest and I had an interesting discussion about the technologies of disruption.  Certainly Amazon has led the way with several of these….

For example, e-commerce directly correlates to Amazon.  Who doesn’t want to order 1 toothbrush or 1 can of carpet cleaner at a time and expects it to arrive within 24-48 hours?  It appears as though we all do! Yet we don’t think about what it takes behind the scenes to make this happen.

For example, the panel mentioned several challenges:

  1.  Short manufacturing lead times – since we need whatever the customer needs within a short period of time after the customer thinks of it, manufacturers are also impacted.  We must have quick lead times, customize on the fly and be on the lookout for changing customer expectations and perceptions.
  2.  Warehouses and 3PL’s – It is definitely different to ship 1 each instead of 1 pallet or even 1 case.  In fact, it is so different that warehouses that support both types of business typically need to set up two separate warehousing operations, whether in separate buildings or segregated in the same building.  There is also quite a bit of technology and automation needed to operate successfully.
  3.  Transportation cost – A tough one!  If a truck, train or plane delivers 1 each or 1 pallet, it still costs the same amount of gas, drivers, maintenance etc.  Since you cannot ship 1 each by itself, it takes up far more space per each when boxed up individually than that same each does in a pack, case or pallet.  Further, if you have enough freight going in the same direction, of course you can combine freight but with last-minute needs, it can prove quite the challenge outside of the metro areas.  
  4.  Last mile – Even in a metro area, how do you get to the last mile (to each consumer)?  This is where Amazon has partnered with people like the US postal service since they are “in the business of delivering the last mile”.
  5.  E-commerce systems – Customers expect to be able to receive 24/7 service via interactive websites customized to them.  Sometimes, they also expect personal service to accompany the on-line tools. What’s involved in getting your catalog on-line, pricing loaded and systems in place is far from a no-brainer.
  6.  Cost impacts – there was quite a bit of discussion on the panel about the margin pressures created by this Amazon Effect.  What can we do to counteract these margin pressures? Dare we say we circle right back to innovation?

And the list could go on and on…..  

Are you thinking about what seemingly unrelated topics like the Amazon Effect might mean for your business even if you don’t supply consumers?  The impacts can be far-reaching and significant.

 



Why Customer Service Trumps All

September 13th, 2016
customer service

Start with building a customer service culture with your employees to give your clients reason to come back and refer you to others.

Although we work on many topics impacting manufacturers and distributors, we have found that the most popular — and vital — is customer service. Prior to the recession, most companies called for our inventory management expertise and how to understand and manage costs (and therefore strategically price); however, since the recession, almost everyone that calls has some element of the customer in their conversation.

As our passion surrounds customer service which must start with your customers (your employees), we love this development. From a financial point-of-view, the customer has a profound impact on business performance. Clients call for every one of these reasons:

  • Business growth – certainly, you have no hope of growing your business unless you serve your customers well. Specifically, in today’s Amazon-impacted world, it must be an assumption.
  • Delivery performance – unfortunately, there are a vast number of ways companies can get into trouble with delivery performance. There has to be at least 20 different processes that impact whether product and services will be delivered in a timely basis. And, that is before you talk about people and culture…. If you cannot deliver on time, not only will you incur extra costs in expediting but you’ll lose orders (perhaps even ones you don’t know about).
  • Lead Times – every client talks about lead times. Customers are demanding a 50% reduction in lead times. Shortening the cycle translates to money and cash flow.
  • Value-added service – we must stand out from the crowd with exceptional service — forget about growing the business, this is essential to MAINTAIN the business (and to have a decent work life). How are you adding value for your customers? It is not all about price! Do you provide service options? Do you provide value add ideas and options? When my laptop crashed, I was very interested in those companies that would expedite, no matter the fee.
  • Margins & profit – do you look at service with a win-win eye? You better start! No one can afford win-lose propositions any longer. Find a way to increase your customers’ profits while increasing yours.
  • Cash flow – an area tied directly to service is inventory positioning and levels. If you can count on high levels of service, you won’t need to carry as much inventory. Every dollar not tied up in your warehouse is a dollar you can invest into the business, your people and your life.
  • Controlling overhead costs – This might sound strange but it frequently arises. If you need to upgrade your infrastructure as business grows and/or complexity increases, a compelling reason not to ignore this need is customer service. For example, if you have an ERP system that is highly customized and no longer will expand with your business, it will result in customer service challenges. Of course, most clients will attempt to address these issues without impacting customers. Since their business isn’t scalable, they will have to employ people to fill the gap. And, instead of automating these tasks, the manual workload increases errors — impacting service levels.

Clearly, customer service should rise to the top of your list in terms of priorities — assuming you want to maintain and grow your business and/or would like to enjoy your work life. What programs are you pursuing to take your service to an entirely new level? What ideas do you have to take a leap forward?

Did you like this article? Continue reading on how to be the Strongest Link in your organization:

Staples and the Power of Customer Service

Is Your Supply Chain Ready for Growth?

 



System Strategies to Kick Off a New Year

January 19th, 2016
system strategies

Kick start your new year with business strategies that are more focused, faster and improve overall relationships. The 5P Accelerator is a new way to take a critical step toward success.

Since I work with clients ranging in size from small, family-owned businesses to multi-billion dollar corporations, industries ranging from aerospace to building products to value-add distribution and on topics ranging from growth to service level improvement to increasing business performance, I have the opportunity to see countless businesses — and what works and what doesn’t work.

It seems like a great time to share what is important as we head into a new year, new quarter or even new day. There is always opportunity to take that critical step towards success.

From a systems standpoint, here a few of the top strategies/areas to consider as a next step in driving business success:

  1. Leverage what you have – Even though I dedicate a portion of my practice to selecting the “right” system to best meet business objectives, I find that 80% of the time, the current system (almost no matter how bad it seems) can be further leveraged to drive results. There are two situations I can think of where the client was extremely system challenged but we found a few ways to improve upon processes, even in the worst of cases. Start by thinking about what is most important to your business. Then dig into the areas of the system that could support that critical business process. It can be as simple as that.
  2. Upgrade when it makes sense – As I said earlier, every business can be improved with its current system; however, there is a limit. If you are in a high-growth mode and leveraging a system geared to small business, you’ll begin to run into the wall in terms of capabilities. It might be time to upgrade. If you have gone through a merger or acquisition, it is likely you’ll need to consider upgrading to have a common platform. If you have a highly customized system to support your business with limited growth potential without continuing down the customization path, it is likely time to consider upgrading. If you want to make a leap forward with your technology and are using an outdated system that has weak support and might be bought up by the next software giant to come along, it might be time to consider an upgrade.
  3. Select the “right” system to drive business results – I have helped many clients select the best system to meet their business objectives the last several years. It can be a dog-eat-dog world with radically different estimates and smooth-talking salespeople; however, there are also great suppliers selling highly functional and flexible systems to bring your business to the next level of performance. The bottom line is that it boils down to how well the software options support your critical business factors (which should be a short list; not 100 items) and how well the software suppliers will partner with you for success. Implementation will cost more than software and it will cost more than you expect to do it well, yet it will deliver substantial results after things smooth out.
  4. CRM – In today’s Amazon-impacted marketplace, service is of critical importance. My clients are expected to deliver faster, provide more options, suggest value-additions, be available 24/7 — and the list goes on. CRM software can help you keep track of your relationships, potential business and provide extra value to your customers.
  5. Warehouse automation – As e-commerce continues to grow in importance around the globe, many manufacturers and distributors must rise to the occasion. It isn’t as easy as using the same processes that work effectively for your regular business. E-commerce drives significant differences to warehouse operations if you want to be able to provide the level of service consumers have become accustomed to at the price they are willing to pay. These changes are driving significant investments in different equipment and technology for those companies with heavy e-commerce business. Bring in experts. Do your research. It will make or break success.
  6. SIOP functionality – More and more of my clients are further leveraging their planning, capacity planning, demand planning/forecasting, MPS/MRP and advanced planning systems to better align demand and supply for improved service levels, reduced lead times, improved margins, accelerated cash flow and to support growth.

Think about which of these might benefit your business. Leveraging systems is one way to grow without adding overhead and it will improve your business performance by utilizing an already-existing asset in most cases. Give it a try. Contact me for support with these strategies and/or to let me know how it goes. Sharing success stories and even failures can propel you to success.

Did you like this article? Continue reading on how to become a Systems Pragmatist:

6 Process & Systems Trends for Success 

The Value of CRM

 



Warehousing Thoughts

March 11th, 2014
Warehousing is one of teh strongest links in the supply chain.

Warehousing is often overlooked for its simplicity, but it’s one of the strongest links in your supply chain.

By Lisa Anderson

Warehousing is an often overlooked area of the business.  We store and ship. How hard can it be? Well, there are plenty of ways to dramatically improve your warehousing service and efficiency.

1. The fundamentals – Every manufacturer has to do something in terms of warehousing and distribution, even if they cross-dock everything. One of the most overlooked keys to success is to look at the fundamentals.

2. Inventory record accuracy – Although a fundamental, I thought it deserved its own item due to the critical importance. It doesn’t matter how efficient your warehouse is IF you cannot find what you need when you need it.

3. Flow – Although you can go down the Toyota Production System or Lean path in terms of flow, if that sounds Greek to you, don’t despair. I’ve found flow to be uncommon common sense. Take a step back and observe how your product moves through the building. How does it flow? Does it make sense? Do you happen to drive in circles? Sounds silly but frequently occurs.

4. WMS light – One of my colleagues introduced me to this term, and I love it. In essence, whether or not you need a fancy software solution down-the-line to optimize your warehouse, there’s no reason to jump from crawling to running the marathon in a day. Which WMS (warehouse management system) tools can be of benefit to drive results? How do you make progress in that direction without having to jump full in to a complex WMS system? WMS light – focus on what makes sense with tools that support it.

5. Mixed mode – In today’s environment, you must understand your business. Is it pick and ship? Do you ship 1 piece at a time or in bulk? Do you support retail, distribution, etc.? In today’s world you might need to do 2 or 3 completely different processes. You must set your warehouse up to support each of them – and it’s unlikely to be the same setup for each.

 

 

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

Bedrock Topic: Inventory Accuracy

What are the Benefits of SIOP?

Top 3 Causes of Poor Inventory Management

Supply Chain Collaboration