I've Been Thinking Archives - LMA-Consulting Group, a supply chain consulting firm https://www.lma-consultinggroup.com/newsletters/ive-been-thinking/ Sat, 30 Mar 2024 06:45:29 +0000 en-US hourly 1 https://wordpress.org/?v=6.5 Where the Talent Has Gone & Strategies for Success https://www.lma-consultinggroup.com/where-the-talent-has-gone-strategies-for-success/ Fri, 12 Jan 2024 16:08:29 +0000 https://www.lma-consultinggroup.com/?page_id=23166 Talent is such a critical topic that we will keep our eyes and ears out for unique strategies and fresh ideas for success.

The post Where the Talent Has Gone & Strategies for Success appeared first on LMA-Consulting Group, a supply chain consulting firm.

]]>

ibt-header

Where Has the Talent Gone?

Where Has the Talent Gone?

The labor participation rate is still under the pre-pandemic rate. According to the Bureau of Labor Statistics, the rate is still running almost 1% below the pre-pandemic rate. This is no surprise to clients as they simply do not have the talent needed for key positions in Manufacturing, Planning, Purchasing, Customer Service, and more. Read more about the Skills Gap in our article.

We believe there are several key reasons for this continuing trend:

  • Baby boomer retirements: 44% of the Baby Boomer generation are at retirement age. By 2030, the youngest of the largest generation in history will be older than 65.
  • Pandemic career changes: The pandemic made people realize that they wanted to find what would fulfill them, and several have changed careers. Also, Families changed their view on how to raise children. In some situations, one parent changed and/or reduced focus on his/ her career (unless flexible) while his partner stayed focused on her career.
  • Current Leadership: The generation following Baby Boomers (Generation X) is not as large. Across clients, whoever is remaining in a leadership role (typically a Baby Boomer, Generation X or Millennial employee) is completely overwhelmed and running around like a chicken with his head cut off.
  • Newer employees: Generally, they are gaining experience, but do not have the knowledge to “figure out complex issues”.
  • The advancement of technology: Technology continues to advance as companies realize they must embrace ERP systems, automation and robotics, artificial intelligence, predictive analytics and more. This has reduced the need for low skilled resources, but it has increased the need for high-skilled resources.

Lack of training & mentoring: For many years, companies could hire talent from the competition. Although this is still possible, there are fewer and fewer resources with the practical experience, systems and data knowledge, and process expertise to fill the roles.

Client Examples

We wish it was an exception, but clients are scrambling (and frequently in chaos). This situation is no longer the exception. It has become the norm. As key people leave the organization or critical changes occur, the resources simply do not exist to successfully navigate these situations as smoothly as they did previously. Thus, clients are scrambling on a day-to-day basis.

For example, multiple clients pop to mind with a key planning, supply chain or operations resource who is completely overloaded. This team member is “juggling multiple balls in the air while doing jumping jacks”. In essence, they are running around filling gaps, resolving issues, and bringing up topics proactively. However, internally, the resource is seen as the issue because she is always racing to keep up with Sales changes, rescheduling due to production ramp up challenges, uncovering system issues, and bringing up potential problems. There was a ‘brain drain’ of expertise and this resource continues to absorb additional tasks to try to keep the balls in the air.

The process is dependent on the system, and the system is dependent on the resources (design, setup, training), the data and transaction disciplines. In our examples, there are completely different situations (challenges, leadership styles, geographies, ERP system maturity, etc.). Yet the result is the same. If the process is dependent on a person, the process will not succeed. On the other hand, the process, system and resources need to be upgraded (including training and education) in conjunction with one another. Our consulting role is to partner with the client to assess the situation, design an upgraded path forward, and partner with the client to roll out and achieve sustainable results.

What it used to take to deliver bottom line results for clients absorbs around 20-30% more effort on average than it did pre-pandemic due to this skills gap (even with our greater experience and internal process upgrades). In some cases, it requires 50-100%! If this situation was an outlier, we wouldn’t be concerned, but it is no longer an outlier. Thus, we are pivoting and will be aggressively highlighting the key issues, warning signs and plans of attack earlier in the process. It will be less comfortable for clients to absorb this news earlier (with less time to absorb the facts), but we are experienced in seeing the signs and knowing the best route to “right the ship”, and so we will force these uncomfortable corrections early on. Fasten your seat belts!

Strategies for Success

There are a few key recommendations to start to “right the ship”.

  • Leadership & Culture: There are fewer resources to bring on board to jump in, figure out a situation and “right the ship”. People follow people; not companies. Thus, you must have exceptional leaders. The only way you will have exceptional leaders is to have an excellent company culture. Of course, company culture goes back to leadership. There are no magical solutions. It take a LOT of hard work, excellent people, the willingness to take risks and invest when no one else is investing, and establish a performance management process that weeds out the poor performers and recognizes the star performers. Read more about this topic is our article How to Attract People to Your Company.
  • Training, education & mentoring: These are NOT the same topic. You can no longer rely on hiring key resources away from the competition. Instead, you must develop them. Provide training (step-by-step processes), education (the why behind what you are doing and how it fits into the big picture), and mentoring (follow me and watch my example as I’ve been there and done that).
  • Supplement resources: Clients are supplementing with consultants, contractors, interim temporary resources etc. Although we are jumping in as consultants to assist clients with critical priorities, we are jointly prioritizing bringing them up-to-speed so that they can sustain the process upgrades on their own.
  • Appreciate different pools of talent: Retired workers might be exactly what you need to help you over the hump and/or bring folks up-to-speed. There are other groups such as veterans to pursue as well.
  • Revisit your job requirements: What do your most successful employees do differently? It might be that they need fundamental skills training but not a college degree. It might be that they need certain characteristics for certain roles but not specific experience. It might be practical ERP knowledge instead of the specific ERP system experience.
  • Meaning, Flexibility & Opportunities for Advancement/ Learning: The name of the game to attract, engage and sustain employees is to ensure meaning, flexibility and opportunities for advancement and/or learning.

Talent is such a critical topic that we will keep our eyes and ears out for unique strategies and fresh ideas for success. Please keep us in the loop with your ideas and success stories as well. It will be a key differentiator in the next decade.

If you are interested in reading more on this topic:
Where is Your Supply Chain Talent?

The post Where the Talent Has Gone & Strategies for Success appeared first on LMA-Consulting Group, a supply chain consulting firm.

]]>
The Power of SIOP / S&OP in Fueling Profitable Growth https://www.lma-consultinggroup.com/the-power-of-siop-sop-in-fueling-profitable-growth/ https://www.lma-consultinggroup.com/the-power-of-siop-sop-in-fueling-profitable-growth/#respond Wed, 01 Nov 2023 15:27:52 +0000 https://www.lma-consultinggroup.com/?p=22530 In the last month, clients have been proving the critical importance of SIOP (Sales Inventory Operations Planning), also known as S&OP or IBP (Integrated Business Planning) time and again.

The post The Power of SIOP / S&OP in Fueling Profitable Growth appeared first on LMA-Consulting Group, a supply chain consulting firm.

]]>

ibt-header

The Power of SIOP / S&OP in Fueling Profitable Growth

In the last month, clients have been proving the critical importance of SIOP (Sales Inventory Operations Planning), also known as S&OP or IBP (Integrated Business Planning) time and again. From process (such as food & beverage), job shop (such as aerospace) and ETO (engineered-to-order such as windows & doors) manufacturers to value-add distributors (such as lawn & garden tools), the SIOP process brings focus to the appropriate areas to align demand with supply and ensure execution success. SIOP spans the end-to-end supply chain and includes resources from Sales & Marketing to Manufacturing, Engineering and Supply Chain to Finance & Accounting.

How Does the SIOP Process Work?

The SIOP process facilitates a monthly cadence that starts with the sales forecast and demand planning process, translates those requirements into a manufacturing and supply chain plans, and highlights critical decisions and actions that need to be taken to support the successful execution of those plans. The process results in a predictable revenue plan, a reliable operations and supply chain plan, and a resulting inventory and profitability forecast. The process enables customer and product profitability reviews, make vs buy decisions, and it facilitates the assessment and actions surrounding supply chain risk. To learn more about how to use the process to achieve profitable growth, read our book, SIOP (Sales Inventory Operations Planning): Creating Predictable Revenue & EBITDA Growth.

SIOP Results

Clients gain substantial results by staying committed to a SIOP process. We frequently hear “we already discuss these topics”. However, the organizations that follow a strict cadence in demand and supply reviews, involve executives in the process and communicate across the organization find opportunities and pivot to what’s coming long before those clients that do not follow a SIOP process. The bottom line is they change from reactive to proactive, and bottom line results follow (profitable growth, accelerated cash flow, high customer service levels, operational efficiencies, etc.).

If you are interested in reading more on this topic:
Predictable Revenue & Resilient Operations for Manufacturing Success

The post The Power of SIOP / S&OP in Fueling Profitable Growth appeared first on LMA-Consulting Group, a supply chain consulting firm.

]]>
https://www.lma-consultinggroup.com/the-power-of-siop-sop-in-fueling-profitable-growth/feed/ 0
A Flurry of ERP Discussions https://www.lma-consultinggroup.com/a-flurry-of-erp-discussions/ https://www.lma-consultinggroup.com/a-flurry-of-erp-discussions/#respond Wed, 13 Sep 2023 13:07:12 +0000 https://www.lma-consultinggroup.com/?p=20917 In the last month, there has been a flurry of ERP related discussions. A client went live on an aggressive timeline with an ERP system with little to no data migration as there simply wasn't time.

The post A Flurry of ERP Discussions appeared first on LMA-Consulting Group, a supply chain consulting firm.

]]>

In the last month, there has been a flurry of ERP related discussions. A client went live on an aggressive timeline with an ERP system with little to no data migration as there simply wasn’t time. As you can imagine, there is quite the mountain of follow-up tasks. In talking with a CEO group, there was a lot of ERP activity. One company went live a year ago and is still recovering in terms of smoothing out since go-live although it was successful. Two others are looking at ERP selection projects and another is looking at better utilizing their ERP system. The bottom line is that folks are realizing they must automate, digitize and better utilize ERP functionality and related technologies (AI, IoT, CRM, e-commerce etc.) to support customers and grow profitably.

Why is ERP Strategy Vital?

ERP is one of the most expensive non-equipment purchases a manufacturer or distributor will make, and it is certainly has the most potential to impact customers. The statistics tell the story. 80% of ERP implementations fail to produce the intended result. The key is whether you are negatively impacting customers or if you spent additional fund, needed additional resources, or didn’t gain the efficiencies upfront.

And, so you might wonder why you should upgrade ERP at all? In the current environment, customer expectations have changed dramatically, profitability is critical, and high-skilled talent is not plentiful; thus, upgrading to a modern ERP system and/or expanding the use of ERP in a way that supports your business differentiators is one of the most important decisions your executive team will make.

A modern ERP system is required to support many customer requirements and some of the automation capabilities. Thus, if you don’t have a modern ERP system and plan to grow, you should evaluate it. On the other hand, not everyone should upgrade their ERP system. Clearly, if it isn’t required to support your growth, you will be diverted from the business at a minimum, and lose business at a maximum. If you already have a modern ERP system (one invested in heavily by the provider and one that has a strong base), it is likely you do not need an upgrade.

You could decide to better leverage your ERP system instead. In the last 20 years, we can count on one hand (and perhaps with just a thumb) the number of clients that couldn’t benefit from further leveraging their existing ERP system. The one exception that pops to mind was solely due to risk as removing a card from their house of cards could bring the house down.

ERP Roadmap

At a bare minimum, every company should develop an ERP roadmap to ensure technology supports business growth and success.

Start with strategy. Evaluate several questions:

  • What are your growth plans? Do you expect to buy companies? Expand through organic growth? Partner? Internationally?
  • Do you expect to expand, add or change markets, industry segments or customers? What is required to support these plans? Are you familiar with your customers’ plans?
  • Do you expect to expand, upgrade, or add products? If so, will that change your business requirements?
  • Do you expect to change your supply strategy and related analysis? (insource, outsource, offload, make vs buy, manufacturing type (job shop, process, ETO, CTO), product rationalization, customer/ product profitability, etc.)
  • What is unique to your business or industry?
  • What is unique from a profit driver standpoint?

Once you have thought through your strategy questions, it is time for an ERP assessment. During an ERP assessment, you should evaluate the following:

  • Your business requirements
  • Your critical success factors (profit drivers, differentiators)
  • The requirements fit with your current ERP system.
  • If needed, an ERP system evaluation to select the best ERP system and related technologies to support your business.
  • If needed, an ERP partner to support your ERP implementation.

In ERP circles, there are many “good salespeople” selling bells and whistles, and there is a lot of complexity in the cross-section of business processes, ERP functionality, and technical specs. It makes sense to hire an outside, unbiased resource to assess your business requirements, critical success factors, fit with your current ERP system and evaluate ERP software and partner upgrade options.

To learn more about the topic, read our article on better utilizing your current ERP system and selecting and upgrading your ERP system.

As the manufacturing resurgence accelerates, the need for a modern ERP system and use of related technologies will be vital to support customers and profitability. Please contact us with your success stories and your questions for how to succeed during these volatile times. And, please keep us in the loop of your situation and how we can help your organization get in a position to thrive for years to come. Learn more about these topics in our blog and download your complimentary copy of our recently released special report: The Road Ahead: Business, Supply Chain & The World Order

The post A Flurry of ERP Discussions appeared first on LMA-Consulting Group, a supply chain consulting firm.

]]>
https://www.lma-consultinggroup.com/a-flurry-of-erp-discussions/feed/ 0
The Resurgence of the Manufacturing Workforce https://www.lma-consultinggroup.com/the-resurgence-of-the-manufacturing-workforce/ https://www.lma-consultinggroup.com/the-resurgence-of-the-manufacturing-workforce/#respond Thu, 07 Sep 2023 13:49:03 +0000 https://www.lma-consultinggroup.com/?p=20634 Manufacturing is making a resurgence in the U.S. and other countries around the world. According to the U.S. Bureau of Labor Statistics, there is a shortage of 550,000 stable manufacturing jobs to be filled in manufacturing businesses nationwide.

The post The Resurgence of the Manufacturing Workforce appeared first on LMA-Consulting Group, a supply chain consulting firm.

]]>

ibt-header

The Resurgence of the Manufacturing Workforce

Manufacturing is making a resurgence in the U.S. and other countries around the world. According to the U.S. Bureau of Labor Statistics, there is a shortage of 550,000 stable manufacturing jobs to be filled in manufacturing businesses nationwide. There is no doubt the Skills Gap is in full force if you observe manufacturers offloading, prioritizing customers, and struggling to fulfill demand because of a lack of people. In union industries, employees are threatening strikes and across the board, wages are increasing which leads to intense inflationary pressures. It is a tricky time to navigate yet the best will figure out how to scale successfully.

The Resurgence Will Continue

The manufacturing resurgence will continue as businesses address extreme supply chain risk, unpredictable costs, the need to meet changing customer needs, and U.S. incentives ramp up. For example, Joseph P. Quinlan, head of CIO Market Strategy at Merrill and Bank of America Private Bank has described the current environment in the U.S. in a June 2023 market outlook report, as “the early stages of a manufacturing supercycle pivoting around renewable energy, electrical vehicles and batteries/charging stations, and semiconductors, in addition to rising spending in more traditional areas like ports, highways, grids, airports and the like.” As of April, spending on manufacturing construction — new factories was tracking at a $189 billion annual rate, triple the average rate in the 2010s ($63 billion).

In consulting with manufacturers how to leverage SIOP (Sales Inventory Operations Planning), supply chain management, and ERP to scale successfully, it is clear that there is plenty of scrutiny on make vs buy decisions (reshoring, nearshoring, offloading, expanding capabilities), customer and product profitability analyses, and strategies to scale successfully to meet customers’ requests and expansion plans. The resurgence will continue yet talent remains scarce.

Fulfilling the the Need for Expansion & Scale

There are several strategies smart manufacturers are pursuing to fulfill the need for expansion and scale as it relates to talent. The most successful include the following:

  • Training & development: There is a renewed interest in training and developing employees to expand their skills and learn about new and advanced methods to perform their roles.
  • Mentoring: One of the best ways to accelerate the learning process is to find a mentor. Mentors bring experience to the table and provide insights that cannot be found in a book. Exemplars can show the way forward. If you can entice experienced employees and retired employees to provide guidance, progress will be robust.
  • Apprenticeship programs: Manufacturing thrives on apprenticeship type programs with on-the-job training with immediate feedback and corrective information.
  • Automation, robotics & digitization of the supply chain: Only the successful will look for ways to automate whatever is repetitive, use robots for those tasks that can run through the night without interaction, and digitize the end-to-end supply chain to bring efficiency and to more quickly meet customer needs.
  • 3D printing / additive manufacturing: Why produce what you can print upon demand? If an aerospace engine and a miniature house can be printed, what’s holding you back?
  • ERP & related technologies: Every client can better use their ERP system to achieve results and automate mundane tasks. Prioritize utilizing this already-existing asset and expand the use with related technologies such as artificial intelligence (AI), IoT (internet of things), digital twins, AV/VR (audio visual/ virtual reality), and much more.
  • Retention: Often, the most successful clients are simply those that retain key talent. It sounds easy, but it requires effective leadership, flexibility, investment into employees (training, cross-training, experiences, etc.), and competitive compensation. People follow people. People do not follow companies.
  • Supplement your employees: We are not the typical supply chain consultants as we will jump into the details with a client and partner with key resources to bring results to fruition. More and more clients are pursuing this type of strategy to supplement their workforce by providing support to key talent while advancing their capabilities and ensuring results. To learn how to select a supply chain consultant, read our article.

As the manufacturing resurgence accelerates, the need for talent will increase. Employ key strategies to fulfill this demand for talent and address the Skills Gap. Please contact us with your success stories and your questions for how to succeed during these volatile times. And, please keep us in the loop of your situation and how we can help your organization get in a position to thrive for years to come. Learn more about these topics in our blog and download your complimentary copy of our recently released special report: The Road Ahead: Business, Supply Chain & The World Order

The post The Resurgence of the Manufacturing Workforce appeared first on LMA-Consulting Group, a supply chain consulting firm.

]]>
https://www.lma-consultinggroup.com/the-resurgence-of-the-manufacturing-workforce/feed/ 0
Optimizing Business Decision Tradeoffs with SIOP https://www.lma-consultinggroup.com/business-decision-tradeoffs-run-amok/ https://www.lma-consultinggroup.com/business-decision-tradeoffs-run-amok/#respond Mon, 17 Jul 2023 13:24:23 +0000 https://www.lma-consultinggroup.com/?p=18972 Making the appropriate business decisions will make or break success. Executives get paid the big bucks to make these decisions. Unfortunately, one poor decision can outweigh thousands of good ones rapidly. SIOP (Sales Inventory Operations Planning), also known as S&OP, is a tool that will optimize these tradeoffs for effective decision making.

The post Optimizing Business Decision Tradeoffs with SIOP appeared first on LMA-Consulting Group, a supply chain consulting firm.

]]>

ibt-header

Risk

Business Decision Tradeoffs Run Amok

Optimizing business decisions will make or break success. Executives get paid the big bucks to make these decisions. Unfortunately, one poor decision can outweigh thousands of good ones rapidly. SIOP (Sales Inventory Operations Planning), also known as S&OP, is a tool that will optimize these tradeoffs for effective decision making. You could simply call it “uncommon common sense decision making” where you look across the full spectrum for business impacts and determine the best path forward.

Several companies such as Anheuser-Busch and Target have lost significant business value recently after making decisions that cooled revenue. On the other hand, artificial intelligence (AI) has sparked vast growth in other companies such as Nvidia. This topic popped to mind as I see more and more clients struggling with key decisions in such an uncertain environment. For example:

  • Should they invest in additional facilities to support projected future growth or find a way to staff up third shift with an uninterested workforce? If they choose the shorter term outlook, will they miss the wave of economic boom? On the other hand, if they take “too long” to make and execute decisions will they miss the opportunity?
  • If they choose to reallocate orders among production plants to deliver on time, will the cost be overwhelming? However, if they delay shipment to mitigate substantial freight costs, will their customer go somewhere else with the next order?
  • Should organizations transition away from China due to the elevated risk levels on multiple fronts? If so, should they move manufacturing closer to customers or to a lower labor cost country that is in a friendly region? Or should they simply diversify suppliers?

And, from a macro point-of-view, will growth be hindered by the rise in interest rates and potential recessions or will what looks like unrelenting economic growth continue?

How SIOP Will Optimize Business Decisions

SIOP (Sales Inventory Operations Planning) is a business process that organically brings tradeoffs to the forefront to align demand and supply (Sales and Operations) and enhance business decision making. To learn more about how the process works and keys to implementing it successfully, read our book, SIOP: Creating Predictable Revenue and EBITDA Growth.

From a decision making point-of-view, SIOP surfaces critical tradeoffs through the process. For example, although an industrial equipment manufacturer had plenty of capacity to meet their overall demand plan, they did not have enough manufacturing capacity to meet customer backlog for their large size products. Once they rolled out a SIOP process, they put together a consensus demand plan and translated that plan into a manufacturing and logistics capacity plan.

The manufacturing plan showed that there was not enough welders with the appropriate specialized skills for this product, and the logistics plan showed that there was not enough space to store these larger products in the building with the higher bay to keep up with the demand plan. Thus, the operations leaders evaluated the potential to offload / outsource. Because they had a unique differentiator on this product, it would slash their margin to unacceptable levels. Thus, they evaluated order policy tradeoffs of pricing and lead time to best support profitable growth while they evaluated long-term strategies to address this product line. SIOP brought the issue to light and provided a process to evaluate demand, capacity, and customer and product profitability to optimize their business decision making process.

As business tradeoffs build up, ensure you have a SIOP process to support your growth and success. There will be more opportunities to surpass the competition and shoot up to the market leader position in the next several years than there has been since the Great Depression. Be prepared to navigate these waters with effective decision making to set your company up for success for decades to come.

Please contact us with your tradeoff and decision-making stories, issues, and opportunities and what you’re doing to succeed. And, please keep us in the loop of your situation and how we can help your organization get in a position to thrive for years to come. Learn more about these topics in our blog and download your complimentary copy of our recently released special report: The Road Ahead: Business, Supply Chain & The World Order

The post Optimizing Business Decision Tradeoffs with SIOP appeared first on LMA-Consulting Group, a supply chain consulting firm.

]]>
https://www.lma-consultinggroup.com/business-decision-tradeoffs-run-amok/feed/ 0
China’s Water Crisis Impact on Manufacturing & Supply Chain https://www.lma-consultinggroup.com/chinas-escalating-water-crisis/ https://www.lma-consultinggroup.com/chinas-escalating-water-crisis/#respond Wed, 07 Jun 2023 14:20:51 +0000 https://www.lma-consultinggroup.com/?p=18846 According to an article in Foreign Affairs, the per capita available water supply around the Northern China Plain (253 cubic meters) is nearly 50% below the UN definition of acute water supply.

The post China’s Water Crisis Impact on Manufacturing & Supply Chain appeared first on LMA-Consulting Group, a supply chain consulting firm.

]]>

ibt-header

According to an article in Foreign Affairs, the per capita available water supply around the Northern China Plain (253 cubic meters) is nearly 50% below the UN definition of acute water supply. Beijing, Shanghai, and other major cities are at similar—or lower—levels. Even Egypt’s well-known water plight (570 cubic meters) is better than China’s, and Egypt doesn’t support a manufacturing base like China does. There are already repercussions. For example, China has historically been a significant producer of aluminum, but now imports aluminum from Russia (the instigator of the war with Ukraine). When China runs dry, will it prioritize the manufacturing of your products and materials or its own?

Water Feeds Electricity

Water is required for electricity. In China, they use 60% coal (it is no wonder why China emits more greenhouse gases than the entire developed world combined), 20% hydro, and 20% nuclear, solar and wind. Hydropower, or hydroenergy, is a form of renewable energy that uses the water stored in dams, as well as flowing in rivers to create electricity in hydropower plants. It appears that China might be closer to acute water distress than the world realizes. What happens when China’s manufacturing comes to a halt because the 20% hydro is unavailable without water?

Why are we encouraging solar production and offering incentives to produce in China (instead of the U.S.)? Likewise, why are we encouraging the production of EVs with batteries made mainly in China using vast amounts of coal and requiring transport across the world? China produces most of the active pharmaceutical ingredients (APIs), computer chips (aside from advanced computer chips which are made in Taiwan), and many other items related to critical infrastructure, materials, and national security.

Impact on Manufacturing

Aside from the boatloads of political risk associated with China, this severe water shortage issue has the potential to be FAR WORSE than the pandemic. Let’s NOT let that happen again.

Why is the U.S. government blocking rare earth mining? China accounts for 63 percent of the world’s rare earth mining, 85 percent of rare earth processing, and 92 percent of rare earth magnet production. Yet rare earth minerals are used in the production of electronics, clean energy, aerospace, automotive and defense. What happens when China runs short of water?

China produces most of the active pharmaceutical ingredients (APIs), computer chips (aside from advanced computer chips which are made in Taiwan), and many other items related to everyday life, critical infrastructure, materials, and national security. Need I go on? 🙂

China will try to prevent this the issue as they want to dominate the world on their timing. Thus, they are taking action. They are moving heavy manufacturing away from the most distressed areas and investing heavily in water management infrastructure. They are using cloud seeding to boost rainfall and sometimes to engineer better weather (for the Olympics) which can damage agriculture and create storm events. Yet even with these measures (and more), estimates show them running short of water by 2030. That is only 7 years!

2030 is NOT much time to move your manufacturing and supply base to another part of the world. Remember, it is not simple. You need to pay attention to water, electricity, natural resources, access to suppliers, facility availability for manufacturing, ability to control your logistics (for example, are the port terminals you go through owned by China?), talent, and much more. As more manufacturers reshore and nearshore, what will be the impact on your supply chain? Will you be early or wait to see what happens? If you wait, your situation is likely to change rapidly – and not for the better. Assess your situation now and develop a path forward that makes sense given your end-to-end supply chain and growth objectives.

Roll out a SIOP (Sales Inventory Operations Planning) process as it will provide the tools and process cadence to ensure you are looking ahead, forecasting demand, making decisions based on customer and product profitability, and determining how to best supply your demand to mitigate key risks, support your business growth objectives, improve your customer experience, increase profitability, and accelerate cash flow. Learn more about how to use SIOP to succeed during volatile times in our new eBook SIOP (Sales Inventory Operations Planning): Creating Predictable Revenue and EBITDA Growth. Download your complimentary copy.

Please keep us in the loop of your situation and how we can help your organization prepare to succeed during volatility and prepare to take advantage of the vast opportunities to come in the next several years.

The post China’s Water Crisis Impact on Manufacturing & Supply Chain appeared first on LMA-Consulting Group, a supply chain consulting firm.

]]>
https://www.lma-consultinggroup.com/chinas-escalating-water-crisis/feed/ 0
Interconnection of People, Technology & Businesses https://www.lma-consultinggroup.com/from-finland-to-estonia-to-the-hustle-of-london-paris/ https://www.lma-consultinggroup.com/from-finland-to-estonia-to-the-hustle-of-london-paris/#respond Mon, 17 Apr 2023 20:49:03 +0000 https://www.lma-consultinggroup.com/?p=18682 On a recent trip to Europe, I was fortunate to combine work with pleasure. Finland is diverse from Helsinki to the arctic circle, and we were thrilled to gain picturesque views of the northern lights. I was surprised there are multiple cruise ships that go from Helsinki to Estonia each day because the people and countries are interconnected.

The post Interconnection of People, Technology & Businesses appeared first on LMA-Consulting Group, a supply chain consulting firm.

]]>

ibt-header

From Finland to Estonia to the Hustle of London & Paris

On a recent trip to Europe, I was fortunate to combine work with pleasure. Finland is diverse from Helsinki to the arctic circle, and we were thrilled to gain picturesque views of the northern lights. I was surprised there are multiple cruise ships that go from Helsinki to Estonia each day because the people and countries are interconnected. Old Town Tallinn, Estonia is the best preserved medieval city in Northern Europe.

From there, moving on to the hustle and bustle of London and Paris and surrounding areas brought a well-founded view of Europe. While outside London, I was able to meet with a client, and while in Paris, I met my global strategy group with members from North America, Europe, and the Pac Rim. Thus, it brought up the importance of the interconnectedness of the world especially with the current volatility.

International Business Expansion Success Stories: From Finland to Estonia to the Hustle of London Paris - LMA Consulting Group

International Business Expansion Success Stories: From Finland to Estonia to the Hustle of London Paris

Interconnection of People, Technology & Businesses in Europe

On my trip to Europe, I saw the interconnection of people, technology and business everywhere I looked. First, every country spoke a significant amount of English as the common language. Common technology platforms are taking over around the world. Frustrating not to talk to a person, yet most airports require scanning of documents to get through security and customs. Airlines are now cutting off groups by requiring scanning of boarding passes. In some ways, it is more efficient with fewer errors, but on the other hand, there is a need for the human connection in some situations. Similar to NY, London and Paris are dominated by cabs, but you can easily schedule a Bolt or Uber (although you might have to wait for multiple drivers to decide if they want to pick you up). Taxi cabs are more reliable.

My friend asked in every location we visited about people, and the unanimous response was that there is a lack of skilled people across the board. In Finland, I wanted to keep the shuttle driver on our good side (to avoid -23 degree weather), and so I tipped for each trip. It was well worth it! In the UK, our client expressed frustration over finding enough people (and it limiting growth). They are working on automation around the clock in a critical work cell. People and technology often go hand-in-hand.

In the UK, it worked out to our advantage in that we got the premier expert on British Royalty for a tour of the Cotswolds villages (as I think no one else was available, and staying at the Four Seasons on American Express points has its advantages), and so it was quite the interesting conversation to/ from the beautiful country and my almamater (for summer school) of Oxford University. I sent my best friend from college an important picture of a Cadbury bar since we lived on them for breakfast.

In Paris, we arrived in-between strikes about the increasing retirement age mandate. Who knew people scheduled strikes? Luck was on our side again because we came during a down season which meant we had access to the best guides and experiences. From a business perspective, I met colleagues from around the world in Paris to discuss the future and the path to success. Again, the need for people to fill in on bookkeeping duties and research support arose as availability of resources is key to success. Clients frequently contact us about how to get connected with business, technology, and other resources.

From a work perspective, Europe is the best place for me to go because I am more of a night person, and so I had Teams calls every night to ensure clients’ business continued to run smoothly. And, fortunately for me, one of my colleagues joined us in Finland and the UK and so there was also opportunities to collaborate in person.

Interconnection of Business

With China flexing its muscles over Taiwan, flying multiple balloons over the US (did you know there were more than the one discovered by a reporter?), buying up assets in Africa and Latin America, we should be well aware of how our businesses are connected. Dig into the following:

  • Who are your suppliers’ suppliers? Do you know who and where they supply materials?
  • Who are your customers’ customers? Do you know who is in their supply chain and who they are dependent on?
  • Who do you consider your key talent? Do you know what engages your key talent? Could they be talking to the competition?
  • Are you in control of your manufacturing? Do you produce internally? Do you have backup plans that can scale? Are you paying attention to which countries are aligning with China? Are you sourcing anything from these countries?
  • Do you have the appropriate technology to connect with your end-to-end supply chain? From reliable internet to modern ERP systems to AI, IoT and robotics, you need the appropriate technology to connect, gain visibility and efficiency.
  • Do you have a SIOP (Sales Inventory Operations Planning) process? (also known as S&OP) SIOP brings people across your organization together on a common goal and extends this alignment to your supply chain partners. Download our complimentary book, SIOP: Creating Predictable Revenue and EBITDA Growth

Start taking action to stay ahead of the fray and succeed in this interconnected world.

Please keep us in the loop of your situation and how we can help your organization stack the deck to not only survive but also to be prepared to take advantage of the vast opportunities to come in the next several years. One great way to start your journey is to roll out a SIOP process to better navigate the volatility and uncertainty. Learn more about how to use SIOP to succeed during volatile times in our new eBook SIOP (Sales Inventory Operations Planning): Creating Predictable Revenue and EBITDA Growth. Download your complimentary copy.

The post Interconnection of People, Technology & Businesses appeared first on LMA-Consulting Group, a supply chain consulting firm.

]]>
https://www.lma-consultinggroup.com/from-finland-to-estonia-to-the-hustle-of-london-paris/feed/ 0
Northern Lights, Husky Sleighs, & Stacking the Deck for Success https://www.lma-consultinggroup.com/northern-lights-husky-sleighs-stacking-the-deck-for-success/ https://www.lma-consultinggroup.com/northern-lights-husky-sleighs-stacking-the-deck-for-success/#respond Sun, 26 Mar 2023 15:00:26 +0000 https://www.lma-consultinggroup.com/?p=18654 I went to Finland to see the northern lights, or the aurora borealis. Getting there is no piece of cake. We flew through London, took a 2-3 hour flight to Helsinki, Finland, and then took another flight to northern Finland (almost another 2 hours) and then drove 40 minutes to the resort (of course, north). It isn't for the faint of heart with temperatures in the negative numbers, requiring 6 or 7 layers minimum to allow you to stay outside for short bursts of time (although not very long as you'll start growing icicles), but the experience is worth it!

The post Northern Lights, Husky Sleighs, & Stacking the Deck for Success appeared first on LMA-Consulting Group, a supply chain consulting firm.

]]>

ibt-header

I went to Finland to see the northern lights, or the aurora borealis. Getting there is no piece of cake. We flew through London, took a 2-3 hour flight to Helsinki, Finland, and then took another flight to northern Finland (almost another 2 hours) and then drove 40 minutes to the resort (of course, north). It isn’t for the faint of heart with temperatures in the negative numbers, requiring 6 or 7 layers minimum to allow you to stay outside for short bursts of time (although not very long as you’ll start growing icicles), but the experience is worth it!

We went on a snowmobile aurora hunting experience (and nearly froze but saw amazing lights) and went aurora hunting in a car (definitely more comfortable). Part of the reason for coming to Finland is to stay in igloos so that we could see them from the hotel as well! All I can say is I’m glad I chose to spend the extra money for the igloos attached to a cabin with a fireplace!! During the day, there are lots of unique options such as riding in a husky or reindeer sleigh. I thought the huskies were adorable and just never stopped running and so included a view from my sleigh. Thanks to Paul for steering us through the course!

Northern Lights Husky Sleighs

Stacking the Deck for Success?

You cannot control everything; however, you can stack the deck so that you can be more likely to succeed. Seeing the aurora borealis is hit and miss since it is up to nature; however you can stack the deck. Go to the artic circle to one of the best places to see them (such as Finland). Visit during the time of year you are more likely to see them (November through March). Stay for at least 3 nights to have a better opportunity of avoiding cloudy nights. Go to a place where they will wake you up when the northern lights are visible. And, you will have stacked the deck in your favor. It isn’t guaranteed but it is more likely. Luckily, we saw them!

It is hard to control variables in business. In today’s volatile business environment, there are simply too many issues that could arise. For example, the collapse of Silicon Valley Bank causes uncertainty in the financial markets and increased the need for liquidity. Additionally, Russia, China and Iran (let alone North Korea) are creating instability throughout the world, impacting exchange rates, ease (or lack thereof) of doing business, causing shortages of key commodities and more. Train derailments and other supply chain challenges. And, new technologies like ChatGPT are transforming industries. Instead of waiting for one of these many issues/ disruptions to arise and disrupt your business, stack the deck in your favor. You will be more likely to succeed.

How to Stack the Deck in the Current Business Environment?

Given everything going on in the world, a few priorities to help you stack the deck for success include the following:

  • Maintain liquidity: Ensure you have access to liquidity. There will be more opportunities than ever before to invest as the proactive companies grow and the weak diminish.
  • Right-size inventory: As goes hand-in-hand with maintaining liquidity, right-size your inventory to free up cash flow yet service customers. Utilize best practice demand and supply planning processes and implement SIOP (Sales Inventory Operations Planning) processes to ensure success. Get your complimentary copy of our new release, SIOP: Creating Predictable Revenue and EBITDA Growth to learn how to achieve success.
  • Retain key talent: The successful are those with access to key talent to best navigate these tumultuous times and take advantage of critical opportunities. Know your A players and treat them as your most important asset. You’ll find that there is nothing more important.
  • Take control of your manufacturing: Do not leave your manufacturing in countries that can be considered our enemies. Who do you think they will prioritize when something goes wrong in the world or if there is a shortage of supply of a key material?
  • Be resilient: How can you respond to changing conditions quickly? Should you manufacture closer to your customers? Should you have backup sources of supply? Should you dual source critical materials?
  • Be technologically astute: Roll out the appropriate technology to allow you to attract and better serve your ideal customers in a way that is more efficient, productive and profitable.
  • Pay attention to data: If you pay attention to changing circumstances and trends in your data and utilize predictive analytics, you can steer proactively instead of driving by looking in your rear-view mirror.
  • Process upgrades: Utilize best practices, tailor to your organization, and educate and engage your organization.

Please keep us in the loop of your situation and how we can help your organization stack the deck to not only survive but also to be prepared to take advantage of the vast opportunities to come in the next several years. One great way to start your journey is to roll out a SIOP process to better navigate the volatility and uncertainty. Learn more about how to use SIOP to succeed during volatile times in our new eBook SIOP (Sales Inventory Operations Planning): Creating Predictable Revenue and EBITDA Growth. Download your complimentary copy.

The post Northern Lights, Husky Sleighs, & Stacking the Deck for Success appeared first on LMA-Consulting Group, a supply chain consulting firm.

]]>
https://www.lma-consultinggroup.com/northern-lights-husky-sleighs-stacking-the-deck-for-success/feed/ 0
Silicon Valley Bank’s Failure Kicked Off a Liquidity Crisis https://www.lma-consultinggroup.com/silicon-valley-banks-failure-kicked-off-a-liquidity-crisis/ Mon, 20 Mar 2023 19:17:17 +0000 https://www.lma-consultinggroup.com/?page_id=18615 Silicon Valley Bank's Failure kicked off panic in the financial markets and banking system. They had too much money tied up in long term bonds paying at low interest rates, and they didn't have the liquidity to keep up with the depositors requests to take money out of the bank. This bank catered to venture [...]

The post Silicon Valley Bank’s Failure Kicked Off a Liquidity Crisis appeared first on LMA-Consulting Group, a supply chain consulting firm.

]]>

ibt-header

SVB Crash

Silicon Valley Bank’s Failure kicked off panic in the financial markets and banking system. They had too much money tied up in long term bonds paying at low interest rates, and they didn’t have the liquidity to keep up with the depositors requests to take money out of the bank. This bank catered to venture capital backed companies in the tech space, and there were several depositors with more than $250,000 in the bank when it collapsed. Unfortunately, since the FDIC only insures to $250,000, these depositors would lose the rest. The government stepped in to assist. However, the liquidity crisis spread to Signature Bank and several others. What does all this mean and what can companies do about the liquidity crisis?

What Does All This Mean?

We are in a liquidity crisis. The increase in interest rates has increased the cost of capital. It was certainly not the only issue that caused the Silicon Valley Bank crisis as there were the normal gamut of issues when a company goes bankrupt, but it was a key factor and likely the straw that broke the camel’s back.

Interest rates are not going down anytime soon since inflation continues to rage as demand remains robust and supply is limited. Thus, products will cost more, and if you have to borrow money to purchase materials and pay employees until customers pay their invoices, you will pay more (assuming you can get a loan). Thus, proactively managing inventory and cash flow is essential.

Proactive Inventory Management

Every dollar you have in inventory is a dollar of cash flow tied up that cannot be used elsewhere. Inventory serves an important purpose to protect against variability (of both demand and supply). Since we are in volatile times, inventory can make or break success in your ability to service customers. On the other hand, if you have “too much” inventory, you are throwing money out the window, and with the high cost of capital, you might be paying a hefty interest rate for the privilege. Even if you aren’t borrowing the money, you cannot invest the funds in R&D or other ways to add value to the business.

A SIOP (Sales Inventory Operations Planning) process, also known as S&OP, can help you align demand with supply and proactively address inventory. For example, an aerospace client had a significant amount of money tied up in inventory. A certain amount of inventory was important to their success because a wide breadth of product availability was part of their unique differentiator in the marketplace which created a barrier to entry for potential competitors. However, they still had an opportunity to reduce inventory while maintaining/ improving service levels by implementing best practices in planning and inventory management.

In this situation, we aligned all sites on a common goal, highlighted the importance by putting an executive in charge of the initiative, and provided resources including process and ERP upgrade support, training and education programs, incentives, rewards, and recognition. We developed a collaborative demand plan and determined the best way to supply the volume. The sites worked together to determine how to share inventory and maximize profit. In less than a year, we were able to reduce inventory by 30-40% on the core product lines while increasing service levels to customers.

Please keep us in the loop of your situation and how we can help your organization roll out a SIOP process, reduce inventory and free up cash while improving service to customers. Learn more about how to use SIOP to succeed during volatile times in our new eBook SIOP (Sales Inventory Operations Planning): Creating Predictable Revenue and EBITDA Growth. Download your complimentary copy.

The post Silicon Valley Bank’s Failure Kicked Off a Liquidity Crisis appeared first on LMA-Consulting Group, a supply chain consulting firm.

]]>
SIOP (Sales Inventory Operations Planning) Book Published https://www.lma-consultinggroup.com/siop-sales-inventory-operations-planning-book-published/ https://www.lma-consultinggroup.com/siop-sales-inventory-operations-planning-book-published/#respond Tue, 14 Feb 2023 22:45:23 +0000 https://www.lma-consultinggroup.com/?p=18510 I am thrilled to announce that I have published a book on SIOP (Sales Inventory Operations Planning), also known as S&OP and IBP (Integrated Business Planning). Why is SIOP VITAL to Success? I think our introduction says it well, and so I'm going to give you a preview. As I look at the chaos that [...]

The post SIOP (Sales Inventory Operations Planning) Book Published appeared first on LMA-Consulting Group, a supply chain consulting firm.

]]>

ibt-header

I am thrilled to announce that I have published a book on SIOP (Sales Inventory Operations Planning), also known as S&OP and IBP (Integrated Business Planning).

Why is SIOP VITAL to Success?

I think our introduction says it well, and so I’m going to give you a preview.

As I look at the chaos that has occurred in the supply chain the last few years and its negative impact on service, growth, and profitability, I see a need for a proven process. The SIOP (Sales, Inventory and Operations Planning) process, also known as S&OP, is the answer. It shines a light on what is needed, engages all departments across the organization and proactively aligns demand with supply to enable growth and profitability. SIOP creates predictability in revenue forecasting and builds an operational rhythm that ensures the appropriate strategic and tactical decisions are made to drive EBITDA growth and working capital improvements.

You need SIOP if you have ever said, “Why is all this inventory on the shelf yet we don’t have what we need?”, “How will we ever make this sales plan?”, or “Will our customers trust us to deliver?”. These are clear signs that Sales and Operations are not aligned.

SIOP provides the playbook to avoid pitfalls, navigate changing conditions, and grow the business. For example, recent SIOP wins include a rapid 40% increase in business growth, a drastic on-time-in-full (OTIF) improvement of 54%, and a 50% reduction in inventory (which made Finance happy) while maintaining customer service levels (which made Sales happy).

As I believe manufacturing and supply chain will be cornerstone to success in the decades to come, I wanted to share this exciting guide and associated best practices. A special thanks to my co-author Diane Garcia and to the entire LMA team especially Liz Cruz, Jesse Dalton, and Cindy Orshonsky who have been instrumental in helping clients implement SIOP programs to successfully navigate supply chain chaos, achieve bottom line results, and, most importantly, engage their employees.

How Do I Get a Copy?

 Exclusively for our newsletter subscribers

Because you are a loyal newsletter subscriber, I’m pleased to extend a complimentary download here. All I ask is if you like the book, please provide a customer review on Amazon. It will help us gain momentum with this critical topic.

Amazon Kindle or Paperback

Purchase your copy here

Apple iTunes

Purchase your copy here.

Please keep us in the loop of your situation and how we can help your organization get in a position to thrive for years to come.

The post SIOP (Sales Inventory Operations Planning) Book Published appeared first on LMA-Consulting Group, a supply chain consulting firm.

]]>
https://www.lma-consultinggroup.com/siop-sales-inventory-operations-planning-book-published/feed/ 0