Cost reduction / Margin improvement Archives - LMA-Consulting Group, a supply chain consulting firm https://www.lma-consultinggroup.com/manufacturing-cat/cost-reduction-margin-improvement/ Fri, 29 Mar 2024 00:41:46 +0000 en-US hourly 1 https://wordpress.org/?v=6.5 Strategies for Gaining Packaging Efficiencies in Your Supply Chain https://www.lma-consultinggroup.com/strategies-for-gaining-packaging-efficiencies-in-your-supply-chain/ https://www.lma-consultinggroup.com/strategies-for-gaining-packaging-efficiencies-in-your-supply-chain/#respond Fri, 08 Mar 2024 00:31:54 +0000 https://www.lma-consultinggroup.com/?p=23528 Since packaging is typically 10-40% of the retail price of products, there is no doubt it adds up to a relevant factor in product cost and waste.

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Companies should seize opportunities to increase packaging efficiencies, improving profitability and sustainability

Since packaging is typically 10-40% of the retail price of products, there is no doubt it adds up to a relevant factor in product cost and waste. Packaging encompasses product design, prototypes and trials, materials, production, labor, shipping, and recycling and/or disposal. The most proactive companies pay close attention to opportunities to increase packaging efficiencies throughout the end-to-end supply chain to improve their profitability and sustainability.

Product Design Collaboration

Product design is at the heart of improving packaging efficiency. Our best clients take a collaborative approach to R&D and packaging design encompassing the end-to-end supply chain. For example, in a healthcare products manufacturer, the packaging engineer worked with R&D, manufacturing technicians, procurement resources, and logistics resources with a specialty in warehousing and transportation. In addition, customers, packaging materials suppliers, equipment specialists, and other resources took part in the collaborative design.

By involving these cross-functional resources, the full life cycle could be incorporated into the product design. In this case, they wanted to ensure the design encompassed the optimal packaging design to meet the customer’s visual, strength, and storage specifications while minimizing the materials, labor, and logistics costs. For example, the objective was to minimize the packaging materials while meeting product specifications. However, the team had to review potentially conflicting factors. For example, doubling the number of units of product per package would make the way the package fit in the box less efficient, the box might not be best designed to optimize the pallet, the pallets might not be optimized to fit on the truck, or the customer might not like the visual design or be able to fit the product in the storage area.

In addition, the product’s performance had to remain intact. Reducing the quantity of materials must not negatively impact the way the product worked for the customer. Compressing the product into the package must not negatively impact the absorbency of the product. Using redesigned materials in the manufacturing process must not impact product quality. This healthcare manufacturer successfully redesigned the product and reduced the total cost by more than 20% inclusive of materials, packaging, warehousing, and transportation costs.

Packaging Efficiencies in Bottling

There are vast opportunities to improve packaging efficiencies in the bottling industry. For example, Niagara has accomplished several key objectives in eliminating waste through packaging and innovation. They designed new packaging that eliminates the need for a cardboard tray in their cases and reduced the amount of plastic in their bottles by 60%. Thus, this packaging requires less materials and uses up less pallet space, allowing the company to reduce carbon emissions and ship more water per order.

Since 2009, Niagara improved its carbon footprint by 59% through innovations in design, lightweighting, and packaging. It has also increased its recycled content usage, which reduced greenhouse gas impact by bottle by 12%. Gaining these results requires a full lifecycle view of supply chain from product design through recycling.

Packaging Efficiencies at Amazon

According to Amazon, it continually works to reinvent and simplify packaging options. The company combines lab testing, machine learning, materials science, and manufacturing partnerships to accomplish this goal. Amazon notes that it avoided more than 2 million tons of packaging materials and reduced per-shipment packaging weight by 41% since 2015. The bottom line is that a significant reduction in packaging will reduce costs and improve sustainability.

Improving packaging efficiency can produce dramatic results. The healthcare products manufacturer, Niagara, and Amazon prove that by focusing on packaging design and innovation, tremendous savings in materials, labor, and freight will flow to the bottom line. In addition, carbon emissions are reduced and sustainability objectives are achieved.

Originally posted in Adhesives & Sealants, March 2024

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Win-Win Focus on the Customer and Costs https://www.lma-consultinggroup.com/win-win-focus-on-the-customer-and-costs/ https://www.lma-consultinggroup.com/win-win-focus-on-the-customer-and-costs/#respond Wed, 06 Dec 2023 20:30:51 +0000 https://www.lma-consultinggroup.com/?p=22847 As companies are searching for ways to successfully navigate these turbulent times, the best ones are achieving a win-win focus on the customer and costs. Since the pandemic, there has been a heightened awareness of the customer experience as companies struggled with supply chain disruptions, delays, shortages, and the lack of resources.

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Clients that focus on providing a superior customer experience along with achieving optimal bottom-line results will perform better than competitors.

As companies are searching for ways to successfully navigate these turbulent times, the best ones are achieving a win-win focus on the customer and costs. Since the pandemic, there has been a heightened awareness of the customer experience as companies struggled with supply chain disruptions, delays, shortages, and the lack of resources. Similarly, as inflation has continued to be a drag on profits, companies are focusing additional efforts on cost reduction and margin improvement programs. Best yet, finding win-win solutions that improve the customer experience and cost will achieve substantial business results.

According to Zendesk CX Trends 2023 report, more than 50% of consumers will switch to a competitor after only one bad experience. This trend is not limited to consumers, as Zippia confirms with the finding that companies focusing on the customer experience increase their revenues by 80%. These are powerful statistics and demand attention. Clients that focus on providing a superior customer experience perform better than the rest.

Improving the customer experience without also improving the cost and margins will not support profitable growth. Thus, forward-thinking clients ensure cross-functional teams continually search for cost-reduction opportunities, experiment with new ways of doing business, and trial strategies to take performance to a new level. Continuous improvement alone will no longer cut it. The best companies focus on continuous iterative improvement as well as what can be seen as radical change.

Pertinent Examples

A healthcare products manufacturer wanted to grow sales after a prolonged period of product stability without an upgrade. In addition, key raw material costs increased significantly due to rising input costs derived from oil and natural gas. However, the company was owned by a private equity firm that wanted aggressive growth and a rapid increase in profitability, and they expected price increases to be offset as well as cost reductions to occur while increasing service levels. These conflicting goals could only be resolved with a cross-functional innovation team.

The leadership team empowered a cross-functional team including R&D, Packaging Engineering, Operations, Supply Chain, and Logistics. The primary focus was on redesigning the product so that it would provide improved performance for the customer while using less materials, optimizing packaging, and improving operational costs. The team involved both customers and suppliers in a collaborative design effort to find opportunities to redesign materials to work better yet reduce usage and scrap, optimize how the product ran on the production lines, and minimize warehousing and shipping costs with compressed packaging optimized for storage and transportation. The team launched an upgraded product line that spurred a 30% increase in sales while reducing costs by 20% in addition to offsetting key input price increases.

Additionally, the manufacturer implemented a demand planning and vendor managed inventory (VMI) program for its number-one customer. By looking into its customer’s demand data and inventory position at its distribution centers across the United States, the company was able to optimize its replenishment plans and reallocate products in a way that maximized customer service levels and reduced lead times while minimizing inventory levels internally and at its customer. In addition, the company was able to plan, which enabled it to optimize truckloads, utilize ideal routes, and maximize the volume of product per truckload, thereby saving 20% in freight costs. Most importantly, it soared to the top category on its customer’s scorecard.

Another medical device manufacturer followed the same path by working closely with its key customer to optimize product designs to provide innovative customer solutions while making the product less expensive to manufacture. It also invested significantly upfront in upgrading to ISO 13485 to ensure compliance and customer satisfaction while expanding the value internally across the entire shop (medical and non-medical) to standardize and promote efficiencies throughout the product flow. The company expanded business with its key customers and improved efficiencies with standard processes and automation wherever possible. Additionally, it assessed customer and product profitability and reviewed operational improvement ideas to reduce scrap rates and improve efficiencies.

Forward-thinking companies think strategically about creating a win-win of enhanced customer value and bottom-line results. Clients that focus on the customer and develop innovative and collaborative solutions tend to also outperform their competition in profitability and performance. During times of volatility, the companies focused on customers and cost will rise above the noise.

Originally published in Adhesives & Sealants Industry, December 2023

 

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Proactive Backlog Management to Dramatically Improve Service

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How Packaging Can Contribute to the Triple Bottom Line https://www.lma-consultinggroup.com/how-packaging-can-contribute-to-the-triple-bottom-line/ https://www.lma-consultinggroup.com/how-packaging-can-contribute-to-the-triple-bottom-line/#respond Thu, 22 Dec 2022 18:46:16 +0000 https://www.lma-consultinggroup.com/?p=18271 With the increase in interest in the three P’s of the triple bottom line (people, planet, and profit), packaging rises to the forefront. It is controllable, and there are several options for how packaging can contribute to the triple bottom line.

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Originally published in Adhesives & Sealants Industry Magazine, December 2022

Companies can focus on win-win-win strategies to impact people, profit, and the planet with supply chain strategies that reduce packaging, modify materials, improve processes, and reduce transportation and logistics costs.

By Lisa Anderson, Founder and President, LMA Consulting Group

With the increase in interest in the three P’s of the triple bottom line (people, planet, and profit), packaging rises to the forefront. It is controllable, and there are several options for how packaging can contribute to the triple bottom line. Starting by expanding your view from your suppliers’ suppliers to your customers’ customers, you’ll find several opportunities for recession proofing your business by partnering with supply chain partners to achieve the ultimate win-win-win.

Almost every raw material and finished good requires packaging. If you can minimize packaging without impacting product quality, you will have a direct impact on the triple bottom line by reducing materials and waste while increasing efficiency, effectiveness, and profitability. You could also redesign packaging to better utilize the packaging design to improve the carbon footprint, profitability, and people’s lives.

When assessing sterile medical applications, you could research the clinical requirements for the barrier. Good packaging design, material selection, and composition can minimize the requirements for the barrier. In a non-sterile application, you might evaluate the use of recycled content and biomaterials.

Pertinent Examples

As it relates to packaging design, material selection and composition, an adult incontinence manufacturer wanted to redesign the materials to perform better yet use less materials in the product for a win-win-win for the customer, manufacturer, and supplier. The R&D, Package Engineering, Purchasing, and Supply Chain teams collaborated closely with the supplier to develop new materials that would achieve the objectives. After several iterations, trials, and revisions, the team accomplished the triple bottom line. Less materials were used in the product, less packaging was required, less waste occurred on the lines with close alignment between operations, equipment suppliers, and key suppliers, and the product performance and customer satisfaction improved.

From a logistics perspective, the resulting packaging was designed optimally to maximize the product in the box, on the pallet, in the warehouse, and most importantly, in a truck so that they could gain up to 20% additional product on the truck for the same price. It also optimized warehousing and storage requirements so that they could shut down an overflow storage facility, not only reducing the movements but also reducing damage and wasted packaging materials.

In another example related to this manufacturer, the team was able to minimize the waste associated with the construction and elastomeric adhesives as well as the fastening tapes by focusing on the manufacturing process. Operations put attention on centerlining the process, asset care, and people development, and these “basics” delivered consistent results over time. Since materials were a preponderance of product cost, these saving went straight to the bottom line, but, more importantly, the people felt engaged, and the customers could count on receiving quality products that met their specifications on-time so that they could serve their patients.

In a life sciences manufacturer of proteins, a cross-functional team focused attention on forecasting sales by package sizes so that they could better align their operations resources to priority tasks to have the right products in the right package in the right place at the right time. Since they had several custom products in custom sizes, it wasn’t a simple task to standardize what was achievable while gaining a directionally correct view by package sizes so that they could set their bottling schedule to align with customer demand. However, after creating a demand plan to support sales growth objectives and translating that plan into bottling requirements by size, they were able to reduce waste, minimize non-essential inventory, and support aggressive growth targets with high on-time-in-full percentages and reduced lead times, creating loyal customers.

Winning Strategies

In each of these examples, the manufacturer communicated and coordinated across the end-to-end supply chain to achieve success. Within each supply chain partner, a cross-functional team participated to ensure the packaging and product was designed, redesigned, and adjusted with the supplier, manufacturer, customer, and even the end customer in mind. The most successful companies are focusing on win-win-win strategies to impact people, profit, and the planet with an eye across the supply chain to reduce packaging, modify materials and composition, improve processes, and reduce transportation and logistics costs while improving overall performance to the customer.

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5P Accelerator Process to Fast-Track Growth & Profits During Business Volatility https://www.lma-consultinggroup.com/5p-accelerator-fast-track-growth-profits/ Wed, 20 Apr 2022 14:07:52 +0000 https://www.lma-consultinggroup.com/?p=3974 Our most successful clients are constantly thinking about how to thrive in ever-changing, volatile conditions.  They cannot afford to wait to see what is working for their competitors and then go "all in". Instead, only those who are resilient, innovative, and thinking five steps ahead will thrive in the next decade. 

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Our most successful clients are constantly thinking about how to thrive in ever-changing, volatile conditions.  They cannot afford to wait to see what is working for their competitors and then go “all in”. Instead, only those who are resilient, innovative, and thinking five steps ahead will thrive in the next decade. 

Thus, they are constantly evaluating the marketplace, their industry, impacts related to the geographies they serve, and changes impacting their supply chain partners. They are looking for what trends might impact their business and if there are opportunities they should pursue. In addition, they are scanning the environment for potential bottlenecks and risks that could negatively impact their plans and assessing strategies to mitigate any serious risks. 

We see our role as staying ahead of the curve so that we can help manufacturers and value-add distributors proactively navigate these volatile times while growing the business, increasing EBITDA, and accelerating cash flow.  Thus, we’ve developed a proprietary process to incorporate the following:

  • Industry Best practices:  incorporating the best strategies that drive proven results from industries as diverse as aerospace and defense, building and construction products, food & beverage, and life sciences will allow you to use proven techniques for the 80% while focusing extra attention to shine on the 20% that is your unique differentiator
  • The Advantage of Size:  whether incorporating the nimble, entrepreneurial spirit of a small or medium size company, the results focus of a private equity backed company to the rigorous process orientation and cross-training advantage of a large, complex, global organization, your organization will gain.
  • Global Trusted Advisor: including viewpoints from expert advisors from diverse disciplines (financial, legal, business), global communities, and trade and professional associations, you’ll gain valued insights instantaneously. 
  • Practical Results: And, most importantly, we’ve bounced these against “what works”, is immediately pragmatic and has delivered rapid results.

5P Accelerator(SM) is our proprietary process that fast-tracks growth and profits.

5p-no-logo

Our 5P Accelerator(SM) focuses on the core factors of success:

  • People:  Success begins and ends with people.  Clients that consider people their #1 asset far surpass the results – and more importantly, the engagement of their people than those who see them as costs. 
  • Processes: Systems, processes, and technologies enable the standardization and automation of best practices while also accounting for the ability to tailor the process on the fly to support changing customer requirements and market conditions. 
  • Plan: There is the “right” mix of planning the work; working the plan. Analysis paralysis and getting lost in plan details will lead to quick failure; however, on the other hand, jumping into action before ensuring you have a directionally correct plan will cause you to sprint on a hamster’s wheel getting nowhere. 
  • Priorities: No two products, customers, or tasks are created equal, and if everything is a priority, nothing will be a priority. Since focus drives 80% of success, prioritization becomes essential. Think through benefit, impact, urgency, the rate the issue is improving or worsening, and sequencing when evaluating priorities. Choose no more than 3 critical priorities to focus on simultaneously.
  • Profit drivers:  To ensure bottom line results, you’ll need to identify profit drivers. Search for those levers you can pull that will increase pricing power, reduce key cost components, apply technology and automation to increase margins, and that will differentiate you from the competition and accelerate growth. 

As you roll out the 5P’s, success will start to follow; however, to accelerate results and ensure sustainability in your rollout, it will be important to also pump up your wheel by understanding the power of focus, why speed is more important than perfection, and how relationships will drive your end-to-end supply chain success, and you will fast-track growth and profits.

Contact us if you are interested in leveraging 5P Accelerator(SM) at your organization.

 

Updated as of April 20, 2022

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Brushware magazine: Efficiency or Resiliency? https://www.lma-consultinggroup.com/brushware-magazine-efficiency-or-resiliency/ https://www.lma-consultinggroup.com/brushware-magazine-efficiency-or-resiliency/#respond Sun, 01 Nov 2020 21:57:56 +0000 https://www.lma-consultinggroup.com/?p=13941 According to a McKinsey survey about COVID-19’s impact on operations and the future supply chain, supply chain leaders believe it will be transformed. For example, close to 75% experienced issues in the production, distribution and supplier footprint that will require changes in the future, and a whopping 93% of respondents plan to increase resilience across [...]

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According to a McKinsey survey about COVID-19’s impact on operations and the future supply chain, supply chain leaders believe it will be transformed. For example, close to 75% experienced issues in the production, distribution and supplier footprint that will require changes in the future, and a whopping 93% of respondents plan to increase resilience across the supply chain. The pre-coronavirus full focus on efficiency is moving over in favor of resilience. Clients and colleagues are seeing the critical importance of creating resiliency and customer responsiveness in their supply chain.

Even before COVID-19, executives were interested in increasing customer responsiveness. Amazon has been transforming both B2B and B2C businesses. As customers get used to rapid deliveries, the ability to change orders at the last minute and easy returns, it becomes the new expectation. However, prior to the pandemic, the ingrained philosophy to reduce costs and increase efficiencies remained dominant, and so customer responsiveness and resiliency was seen as more of a “nice-to-have” so long as there wasn’t a hit to the financials.

The pandemic has proven that resiliency has become a “must”. The ability to respond and be agile has gained in importance. For example, during the pandemic, clients ran out of inventory or critical materials/ components due to disruptions in the supply chain. Having a backup supplier in the same geographic region as the core supplier was of no help! Even if the backup supplier was in another region of the world, lead times were too long to address changing customer requirements. If your backup source of supply was close to your manufacturing operations and consumer demand, you were most likely still out of luck unless you had consistently ordered supply from your secondary backup supplier so you’d gain priority. The need for resiliency has become clear.

Do we have to choose between efficiency and resiliency? Not necessarily. Clients that have pivoted to rethink how to achieve efficiency and resiliency simultaneously will thrive post COVID-19. In essence, they need to find the appropriate balance between an internal and external focus, a reduction of costs and an increase in agility, an increase in labor efficiency by locating production to lower cost countries and an increase in customer responsiveness by locating production closer to customers and a focus on the monthly profit and loss statement and creating flexibility with working capital reserves.

How should we achieve the “AND” of efficiency and resiliency? Start by understanding your customers’ customers, and the associated changing buying behaviors and evolving customer needs. The quicker you pick up on these changes, the quicker they can be incorporated into your strategic decisions, your supply chain network and your new products and services offerings. Proactively collaborate with customers and suppliers so that you can rapidly realign demand and supply to improve the customer experience, increase profitability and cash flow. Certainly, to bring these goals to fruition, you’ll need to pay close attention to upgrading your talent and technology.

The most successful executives will focus on creating both efficiency and resiliency. If you think of the definition of efficiency as organization plus speed, and you think of the definition of resiliency as the speed to recover, you’ll find speed in common. Latch on to that commonality and find innovate ways to achieve the win-win of  efficiency and resiliency.

 

As originally published in Brushware Magazine on November 2020

Click here to see the original PDF.

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Pricing & Profits: It’s Not All About Revenue https://www.lma-consultinggroup.com/pricing-profits-its-not-all-about-revenue/ Sat, 04 May 2019 19:39:42 +0000 https://www.lma-consultinggroup.com/?p=7901 According to CFO Magazine, Amazon's profit doubled to a record $3.6 billion in the first quarter yet reported its lowest growth rate in quarterly revenue since 2015.

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According to CFO Magazine, Amazon’s profit doubled to a record $3.6 billion in the first quarter yet reported its lowest growth rate in quarterly revenue since 2015. In today’s Amazonian environment, subscription services such as Amazon cloud and Kindle services as well as disruptive forces such as the 3rd party seller services (as our clients worry about from the opposite viewpoint) are driving profitable growth for a company that once lost money continuously. Are you considering ways to ensure your pricing makes sense and delivers the results you intend?

It’s Not All About Revenue

Ask questions of your sales representatives, customers, marketing department, executives, and competitors about pricing:

  • When is the last time you raised prices? Why are they at the level they are set?
  • Who sets your prices? Think carefully as this could lead to some interesting discussions.
  • Do you know how your prices compare to your costs?There are lots of reasons NOT to set prices this way but knowing this relationship is relevant.
  • How does your pricing stack up with the competition? Again, high or low is irrelevant but considering your strategy is key.
  • Since it has come up frequently lately, I’ll also throw in this one: Is your pricing so complex that your ERP system won’t support it?That would certainly be something to re-evaluate.

Pricing is an important topic, assuming you are interested in profitable growth. It is worth taking the time to ask a few key questions of your internal and external resources. Gather your executive team and put some focus on whether what you are doing makes sense and supports your strategy or if it is out of date. With the pace of change at an all-time high, reviewing this topic once every few years is by NO MEANS enough. 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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Why Financial Acumen is Relevant to Operations https://www.lma-consultinggroup.com/financial-acumen-relevant-operations/ Mon, 26 Sep 2016 20:54:29 +0000 https://www.lma-consultinggroup.com/?p=4209 Have you put your organization under review to look for ideas and solutions that may be right in front of you? Take a step back and look for those strategic weapons with an eagle eye at improving performance and your bottom line. As we brainstormed our unique value proposition with our advisory board and marketing [...]

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Have you put your organization under review to look for ideas and solutions that may be right in front of you? Take a step back and look for those strategic weapons with an eagle eye at improving performance and your bottom line.

As we brainstormed our unique value proposition with our advisory board and marketing team, the topic of financial acumen rose to the surface. Traditionally, we’ve talked about people, processes and systems and how our unique combination of these elements delivers superior business performance; however, this statement failed to include a vital element of our success – financial acumen.

When I was a VP of Operations and Supply Chain, we constantly were pursuing how to reduce costs while improving the performance of the product and service to our customers. Understanding how to get to true costs – not double or triple counting cost improvement programs isn’t as easy as it seems like it would be. Costs are also critical for thinking strategically about pricing, what focus to put on certain products or customers etc.

Thus, having this financial acumen is essential and noteworthy. Fortunately for me, I had a finance mentor early in my career path; thus, I decided to get an MBA with an emphasis in Finance. Of course, although quite valuable, I learned 100 times more from a a Finance Director who worked for me later in my career. He was invaluable because he knew costs, how to analyze capital investments, and what was important when it came to variances, contribution margins and cash flow. What else could you want in a superhero? Thanks Marty!

Thus, we have evolved this unique formula to the “right” combination of people (culture, change, leadership etc.), processes and protocols (inclusive of systems, finance etc.) – and it has a great alliteration of P’s to boot!

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5P Accelerator to Fast-Track Growth and Profits https://www.lma-consultinggroup.com/5p-accelerator-to-fast-track-growth-and-profits/ https://www.lma-consultinggroup.com/5p-accelerator-to-fast-track-growth-and-profits/#respond Tue, 26 Apr 2016 21:24:47 +0000 https://www.lma-consultinggroup.com/?p=10380 Energy spent on focus, speed and relationships can help companies chart a course for growth and increase revenue. Our most successful clients are constantly thinking about where they are headed. They think about why they are going there — how does it fit with their vision? How does it have meaning for their customers? Employees? Supply [...]

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Energy spent on focus, speed and relationships can help companies chart a course for growth and increase revenue.

Our most successful clients are constantly thinking about where they are headed. They think about why they are going there — how does it fit with their vision? How does it have meaning for their customers? Employees? Supply chain partners?

They also think about emerging trends — what is most likely to impact their business? What do they have control over? What opportunities can they leverage? Can they turn lemons into lemonade? How?

Our role is to stay ahead of the curve so that I can help my clients achieve dramatic results. Thus, we’ve incorporated the following best practices and thinking into the development of our proprietary processes:

  • Best practices across industries (ranging from aerospace to building products to food & beverage to distribution) and company-sizes (from small, family-owned businesses to facilities and divisions of multi-billion dollar, global enterprises)
  • Expert advice from our collaborations and alliances of clients and colleagues inclusive of top-notch trusted advisors, communities of executives and business owners, and trade association experts and professionals.
  • And, most importantly, we’ve bounced these against “what works” and is immediately pragmatic.

5P Accelerator(SM) is our proprietary process that fast-tracks growth and profits.

Our 5P Accelerator(SM) focuses on the core factors of success:

  • People – success begins and ends with people. Do you consider your people assets or costs? Give me a strong leader with a mediocre strategy any day over a weak leader with a strong strategy!
  • Processes – the foundation of success; similar to a house, if you don’t have a solid foundation, fancy curtains will not be sufficient to withstand a storm.
  • Plan – too many executives jump to action and skip the planning step. A plan is not only a part of your foundation (imagine a football team without a playbook) but it also provides an important collaboration vehicle.
  • Priorities – if I only had a dollar for every executive who wasted time on non-essential priorities, I’d be rich! What seems like a priority because your boss or customer happens to be yelling over the phone or a respected boss, peer or Board member is asking about isn’t necessarily so…..
  • Profit drivers – considering what is essential to your strategy, key customers and potential customers, profitability, cash flow or other critical factors should be of utmost importance.

Unfortunately, getting the 5Ps “right” can be challenging enough; however, it might not be sufficient for success. Add in focus, speed and relationships to tip the scales in your favor to fast-track growth and profits.

Please refer to our webpage to learn more and contact us if you are interested in leveraging 5P Accelerator(SM) at your organization.

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Strategies to Reduce Operational Cost without Capital Investment https://www.lma-consultinggroup.com/strategies-to-reduce-operational-cost-without-capital-investment/ https://www.lma-consultinggroup.com/strategies-to-reduce-operational-cost-without-capital-investment/#respond Thu, 12 Feb 2015 15:22:59 +0000 https://www.lma-consultinggroup.com/?p=11222 Focus on operational cost reduction strategies to continue growing efficiently while also giving yourself pricing wiggle room.

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Focus on operational cost reduction strategies to continue growing efficiently while also giving yourself pricing wiggle room.

As businesses look to find ways to grow profitably and build efficiencies into the process upfront, maintaining low operational costs remains paramount.  It also provides pricing flexibility as you are able to reduce your breakeven point for covering costs. A few strategies to consider include:

1. Reduce waste – sounds obvious but often requires significant focus. Focus demands priority. Dictating priority doesn’t last long; instead, it must be a priority backed with support when “the going gets rough”.  Reducing waste reduces raw material cost – if raw materials are a significant portion of your business cost, consider prioritizing. If they aren’t, ignore this item!

2. Improve operational efficiency – find a way to resolve roadblocks, analyze root causes and improve your throughput. Improving operational efficiency frees up capacity for growth. You might be able to free up crews/people that can be re-focused on other, value-added activities that will increase profitability and support business growth.

3. Minimize machine breakdowns – it is obvious that minimizing machine breakdowns will improve operational efficiency. In addition, it typically also reduces waste because lining out the machine when starting back up uses extra materials. A healthy focus on preventative maintenance combined with operator training programs typically does the trick.

4. Reduce inventory levels – although the main benefit of lower inventory levels is increased cash flow, it also can reduce operational cost. For example, if there is less inventory on hand, it is typically quicker and requires less people to cycle count, pull inventory, etc. It also can reduce costs significantly if your company is at the breakeven point in terms of warehouse space.

5. Continuous improvement – don’t forget to ask your employees for ideas! In my experience, employees are able to generate significant ideas to save operational cost when asked. Be genuinely interested and you’ll be amazed with the results.

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PR Newswire: Delivery, Pricing and Sales Support Top List of Three Ways Customer Expectations Changed for Manufacturers and Distributors According to Research https://www.lma-consultinggroup.com/press-release-7-15-2014/ Tue, 15 Jul 2014 15:35:35 +0000 https://www.lma-consultinggroup.com/?page_id=5535 Originally published on PR Newswire on July 15, 2014 CLAREMONT, Calif., July 15, 2014 /PRNewswire/ -- Lisa Anderson, president of LMA Consulting Group(SM) and a supply chain management expert, hypothesized that Amazon and companies like Amazon have had an impact on service demands for manufacturers and distributors. In a recent study measuring the "Amazon Effect," [...]

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Originally published on PR Newswire on July 15, 2014

CLAREMONT, Calif., July 15, 2014 /PRNewswire/ — Lisa Anderson, president of LMA Consulting Group(SM) and a supply chain management expert, hypothesized that Amazon and companies like Amazon have had an impact on service demands for manufacturers and distributors. In a recent study measuring the “Amazon Effect,” Anderson found that respondents ranked three areas where customer’s expectations have been impacted the most on the past three years, which include: delivery/lead time, price negotiation and comparison, and pre-sale and post-sale service and support.

“For many of us in the manufacturing and distribution industry, these responses didn’t come as a complete surprise,” explains Anderson. “If there is one trend in common with all of my clients, it’s that customers have been demanding more for less – and quicker than ever before. Shortened lead times have become the standard for running a manufacturing or distribution company competitively. Additionally, with the increased use of technology—customers want ordering, pricing and delivery information online, up-to-the-minute and available 24/7—much like Amazon. Without a technology infrastructure that readily communicates sales and service information to your customers, you won’t be able to compete or deliver products cost-effectively. Margins will suffer and profitability will decline. “

Two-thirds of manufacturers and distributors participating in her service gaps research study have reported having to respond to the elevated service standards established by companies like Amazon. Anderson, who recently helped manufacturers and distributors better understand workforce skills gaps and the impact on their operations, is also studying the effect Amazon has on customer expectations and service standards that are quickly becoming the benchmark with which consumers measure company value and whether they will do business with that company. 

The complete Amazon Effect Service Gap report will be available in August. To automatically receive the free report when it is available, register here.

About LMA Consulting Group – Lisa Anderson, MBA, CSCP

Lisa Anderson is a leading expert in selecting & implementing strategic priorities and ranked 16 most influential in supply chain by SAP. Known as “The Manufacturing Connector” Lisa has the unique ability to zero in on the critical strategic priorities and bridge the gap between strategy and execution to achieve dramatically improved service levels, accelerated cash flow and increased profits. With a keen focus on elevating business performance, Lisa is passionate about not only synthesizing strategic priorities that will deliver business results but also in designing an implementation approach that delivers rapid results.

Prior to founding LMA Consulting Group Inc., Lisa was the Vice President of Operations and Supply Chain of PaperPak, Inc. Her twelve-year tenure included transitions and promotions through the company transformation from a $100 million family-owned business, through a merger and acquisition of three businesses into one $350 million dollar global company, followed by a management leveraged buyout in combination with an investment banking group.

A sought-after writer and speaker, Lisa has spoken at the Global Supply Chain & Logistics Summit, the APICS International Conference and as a visiting lecturer at the University of Southern California’s Entrepreneurial Program. Lisa is the author of “Leverage Social Networks Business Results,” has published hundreds of articles and has been quoted in the media including The Wall Street Journal, ABC News and Industry Week.

Lisa serves as an Advisory Board Member for the Advanced Supply Chain Certification program at California State University Fullerton’s Extended Education, is Board approved in Supply Chain strategy by the Society for Advancement in Consulting, is an APICS Certified Supply Chain Professional (CSCP) and won the APICS Southwest District’s Milt Cook Award in 2011.

With a blend of management, finance and operations, Lisa received her MBA with an emphasis in Finance from California State University Fullerton and her BSBA with an emphasis in Operations Management from the University of North Carolina at Chapel Hill.

She has traveled extensively throughout North America, Central America and Europe, including a summer in Oxford when attending the University of North Carolina. Lisa tries to make as many stops as possible at in New Orleans to enjoy a beignet at the Café de Monde. And, in recognition of her extraordinary tenacity to accomplish goals, her colleagues fondly refer to her as “pit terrier.”

The post PR Newswire: Delivery, Pricing and Sales Support Top List of Three Ways Customer Expectations Changed for Manufacturers and Distributors According to Research appeared first on LMA-Consulting Group, a supply chain consulting firm.

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