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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Customer service has suffered in the last few years. Yet providing a superior customer experience is paramount to success especially during these turbulent times of volatility, uncertainty, complexity and ambiguity (VUCA). As we see this trend become a reality across a wide spectrum of companies and industries, proactive backlog management has proven effective in ensuring consistent high service levels (on-time-in-full OTIF, quick lead times, and proactive communications).

The Customer Service Priority

Only organizations that provide a superior customer experience will succeed over the long term. Customer service matters especially in volatile and turbulent times. According to Salesforce, 88% of buyers say experience matters as much as a company’s products or services. Do executives pay as much attention to customer service as they do product and profit?

Since customer service suffered during and post pandemic, it has provided opportunities for those companies that prioritize service. According to Forrester, customer experience quality levels have dropped almost 20% in the past year while consumers have less patience than pre-pandemic (according to Netomi’s State of Customer Service Report). As forward-thinking executives see this opportunity, there will be vast opportunities for growth.

Although companies have struggled to satisfy customers, they must flip the equation to drive growth. According to the Digital-First Customer Experience Report by NICE, 95% of consumers say customer service impacts their brand loyalty, naming easy access, self-service, and professional agents as important factors. Every client has numerous examples that reflect this priority. For example, a customer of a building products manufacturer requested an expedite to satisfy a customer request. Because the manufacturer was willing to prioritize what their key customer needed, that customer looked for opportunities to expand business with them down-the-line. They knew that service was essential during turbulent times, and so proactively decided they wanted to partner with suppliers they could count on.

Backlog Management Processes

Although one of the best ways to improve customer service is to improve planning processes so that the “right” products are in the “right” place at the “right” time (read more about these processes in our article, “Proactive Planning to Grow & Scale“), one of the most important processes to ensure success is a proactive backlog management process.

An effective backlog management process sounds quite simple although no matter the type of business, it can prove to be essential to ensuring high customer service levels and OTIF (on-time-in-full). Backlog management can be as simple as downloading an open order report and “working” the report. In businesses that solely ship from stock, it can be essentially simple, assuming the “right” inventory is in stock. In this situation, the Shipping Department would go down the backlog report and ship orders with the only nuance being if they scheduled trucks or if customers picked up orders.

In most situations, the backlog will include orders that require more than just shipping. Typically, orders can be in multiple statuses. Several that pop to mind include:

• Customer orders with inventory to ship
• Customer orders with not enough inventory to ship
• Customer orders waiting on a replenishment order (transfer order) from another facility
• Customer orders waiting on a purchase receipt
• Customer orders scheduled in production
• Customer orders that have to go through multiple production steps in production
• Customer orders that have to go through an outside processing step
• Customer orders that require testing prior to shipment
• Customer orders waiting on customer approval of drawings
• Customer orders waiting on production engineering
• Customer orders waiting on design engineering
• Customer orders in a pre-engineering status
• Customer orders that are ready to ship but waiting on the truck to be scheduled or the customer to pick it up
• Customer orders waiting on international shipping paperwork.
• Customer orders waiting on payment. This could be payment upfront or a customer on credit hold.
• Customer orders waiting on quality holds.
• Customer orders waiting on customer holds.
• Customer orders waiting on responses from the customer.
• Customer orders changes.
• Customer orders that are backordered
• Customer orders that are past due
• Customer orders waiting on additional lines, items or orders so that they can ship efficiently
• Customer orders that are waiting on items that must ship together. For example, in aerospace, there are often right and left parts. Without both, the customer cannot proceed.
• And the list goes on……

Proactive Backlog Management Processes

Thus, given the number of statuses and situations that can arise during the order fulfillment process, proactively managing backlog includes determining which status orders are in and what it will take to get the order out the door on time. The reason it becomes complex can be due to several factors:

• The number of order status possibilities
• The number of people/ departments involved in the process
• The communication links between the departments
• System visibility of the order statuses and timeliness of transactions
• Reporting capabilities to support the backlog management process

Our most successful clients put together a cross-functional process with a daily and weekly cadence with key touchpoints.

Client Success Stories on Backlog Management

A building products manufacturer that was 80/20 make-to-stock with a small segment of make-to-order products struggled with OTIF levels. Thus, instead of constantly looking in the rearview mirror and trying to explain past due, we worked with them to look forward. We developed a view of the backlog report that was due to ship in the next week.

Next, we developed logic to assign the orders due in the next week to specific people or departments. For example, if it was on customer hold, it was assigned to Customer Service. If it was for the Canada location, it was assigned to a different group. If it was a certain product line and didn’t have inventory to cover all orders, it was assigned to the appropriate planner to see if it was scheduled and on track. If it had inventory, it was assigned to Shipping to check on the shipping schedule and to follow up on transportation.

Although reviewed daily, we set a weekly cadence to get together as a cross functional team. We met each Friday to review past due, reasons for past due (which were summarized by category), projected shipments and/or projected past due, reasons for projected past due and action items if there was anything that could be done to get the order done on time. We also discussed recommendations and improvements to the process. By following this backlog management process as well as working on production and replenishment planning improvements, service levels went from 38% to the 90%’s. To hear from our supply chain consulting client directly, listen to our client success story video.

Similarly, in an aerospace manufacturer, past due was climbing, and so we worked with the client to implement a backlog process. In this situation, there were multiple steps to the manufacturing process. Thus, the main focus in managing the backlog report was to trace the progress through the shop. For example, as the item was staged for production, it went into a staging status. As it went through the first machine, it was labeled as step 1 (noting the machine name). Although it was planned for steps 2, 3 and 4 based on standard run rates and queue times, knowing the order started production in step 1 alerted future steps of progress. If materials were short that impacted step 3, the issue was noted and status tracked daily.

By meeting with cross-functional group on a daily basis, service levels were improved from the low 60%’s to the low 90%’s. Once they gained visibility to upcoming work with better clarity, they saw capacity shortfalls. By adding capacity where required, they improved to the high 90%’s. Once ahead of the backlog process, we looked for advanced technology solutions to automate and improve visibility across order statuses to minimize meeting time and to focus on exceptions instead.

The Bottom Line

A secret to success in improving service levels is to roll out a proactive backlog management process. Depending on the complexity of the business, a proactive approach to backlog management could be as simple as prioritizing shipping based on customer due dates or it could involve tracking multiple steps and statuses across multiple departments. Changing from reactive to proactive will rapidly improve customer service levels. If you are interested in talking about implementing a best practice backlog management process tailored to your business needs to improve your customer experience, contact us.

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Production Planning Best Practices to Recover Capacity

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Prior to Uber, a medallion (a transferable permit that allows a taxi driver to operate) cost $1 million dollars in New York city. It was a powerful permit with substantial value. After Uber started up, the low point for a medallion was around $25,000. That is a 40-fold reduction in perceived value! Alternatively, Uber brought customer service up several notches, added customer value and growth exploded. Customer service mattered.

On the other hand, although Uber exists in Japan, it is not well known. Taxis continue to rule the road. Why? This is because taxis are clean, efficient, and provide value. Uber wasn’t filling a gap in perceived customer service deficiency.

Fast-forward several years, and the current value of a medallion is around $137,000. It is up 4-fold yet remains less than 20% of its peak value. Could this be related to service? Absolutely! I used to take Uber or Lyft home from Ontario airport. However, the last 3+ times, it took forever to get a driver, it cost a lot, and it was a frustrating experience with poor customer experience. Taxis are starting to look more reliable and faster. I decided I’d rather drive and pay for parking for more reliable and quicker service for close to the same price. If this spreads, the value equation will continue to change.

How does this boil down? Customer service matters and can drive millions to the bottom line.

Customer Service Rules

The best clients prioritize customer service and customer success. A superior customer experience will create customer loyalty. As the world becomes more volatile, customer loyalty will matter more than ever before. How can you distinguish yourself from the competition? Both simple and advanced strategies can be incredibly effective.

• OTIF (on-time-in-full): Although OTIF seems like a no-brainer (after all, who doesn’t expect products on time), we’ve seen many client examples of significant business growth and success stemming simply from “doing what you said you would do”. Starting with the simple strategies can go a long way.
• Quick deliveries: Amazon has proved that quick delivery has value. When my Mom (who has never ordered directly from Amazon since she calls me to place orders) thinks next day delivery is ‘late’, you know quick delivery has become the standard.
• Reliability: Beyond OTIF and delivery performance, ensuring your products and services are reliable is important. This includes receiving the expected quality in product and service and communicating issues upfront.
• Going the extra mile: There are countless examples of employees going the extra mile. For example, when my car broke down, my mechanic picked me up and took care of my car. When I asked for something a restaurant didn’t have, they made it anyway. And I could keep going with endless examples.
• Customer collaborative programs: We worked with customers to develop processes to figure out what their customers’ needed, where their customers’ needed it, and when the customers’ needed it (collaborative ordering, vendor managed inventory). In essence, our customer took over the ordering process and made sure their customer’s distribution centers/ branches had the right products at the right place at the right time to provide excellent service while minimizing inventory and product costs (production, transportation, distribution, etc.) for the customer and supplier. A win-win.
• New products: Bringing products to market before customers realize they need those products can be risky yet transformational. Just think about the examples. When Toyota wanted to introduce vans in the U.S. market, they drove vans across the country to see what customers might need that they wouldn’t realize or mention in a customer survey. Who knew they needed that cup holder or USB port before they had it? Similarly, who knew they needed an iPhone or even an iPod when walking around with a Sony walkman?
• New services: Figure out what would provide value and what your customers need even if they haven’t requested it or thought about it. Pay attention. Who knew they needed an Uber before Uber existed? Anyone who was picked up in a dirty taxi with an unfriendly driver could figure it out.

Companies that follow these simple and advanced strategies add value for their customers. They will grow faster and more substantially than their competition, and they will add more profit to their bottom line. In fact, they will add more profit to their customers’ bottom line as well.

Please contact us with your stories, issues, and ideas on customer service. And, please keep us in the loop of your situation and how we can help your organization prepare to thrive and mitigate your highest risks. SIOP (Sales Inventory Operations Planning) is one of the strategies and toolsets to help you achieve customer service objectives. If you cannot get ahead of changing conditions and needs, you won’t be able to provide a superior customer experience. Learn more about this strategy in our book, SIOP: Creating Predictable Revenue and EBITDA Growth.

The post Does Customer Service Matter: Uber vs Taxis? appeared first on LMA-Consulting Group, a supply chain consulting firm.

Customer Relationship Management (CRM)

During times of volatility it is of paramount importance to stay in tune with your customers. Otherwise, you could set and execute strategies that are a waste of limited time, money, and resources as conditions evolve. We are seeing a great reset occur. Baby boomer owners of closely-held companies are selling. Depending on the buyer, everything changes. For example, if a strategic buyer purchases the company, and they happen to have a manufacturing facility with excess capacity in the same region, it is likely they will consolidate, thereby changing the entire supply chain. On the other hand, if a strategic buyer purchases to gain entry into the marketplace as their current operations are in Europe, they are likely to invest and expand the facility. Or, the buyer could have production sourced from Asia but want a footprint domestically. A private equity buyer will have different objectives altogether. There are countless scenarios that could occur.

Additionally, public companies are reevaluating their supply chain based on lessons learned from the pandemic and emerging goals such as sustainability. As they reconfigure their supply chain, impacts will be widespread on their end-to-end supply chain. Additionally, mid-tier companies are evaluating the risks of producing in China in conjunction with their customers’ increasing expectations for rapid deliveries and order changes. Forward-thinking organizations see opportunity to take market share as their competition struggles, and so they are preparing for the future. And this is before you consider the shortage of resources and skills. The bottom line is that customer requirements and supply chains are “on the go”. Thus, you must keep up with your customers and ideally get ahead so that you can create your future instead of responding as they occur.

Customer Relationship Management to the Rescue

Customer relationship management has always been an assumption to achieving a superior customer experience and profitable growth. There is no doubt it will be even far more integral to survival in the future. More importantly, those who can stand out from the crowd will have an opportunity to take market share and thrive.

CRM processes offer several benefits:

• Increase customer lifetime value
• Grows revenue
• Improves profitability
• Supports SIOP with the alignment of business silos
• Improves products, services, and customer support
• Allow you to be ready for what’s next

The best practice customer relationship management processes boil down to a few core concepts:

• Staying in touch with customers on a regular cadence with the frequency and mode related to the customer’s strategic relevance, profitability, opportunity for growth etc.
• Tracking potential customer opportunities for expansion (new ship points, products, regions, etc.) including the probability of success, likely timing, likely products, likely regions, funding status and/or gate status (also known as pipeline management)
• Uncovering and tracking new potential customers and market opportunities
• Tracking the order fulfillment cycle from lead to quote to order to installation etc.
• Keeping track of your relationship network and what’s important for future success
• Tracking key events and changing conditions related to your industry, network, etc.
• Using a coordinated and proactive approach with customer communications including feedback loops.
• Tracking customer agreements (inventory agreements, service level agreements, etc.)

The bottom line is that a CRM process will increase BOTH your value and your customers’ value.

Do You Need CRM Software?

Of course, the answer to whether you need a CRM software to be successful in customer relationship management processes is “it depends”. Multiple clients utilize CRM tools and consider them essential and directly supportive of customer growth and success. On the other hand, there are several client examples of success using old school tools such as tracking contacts in a black book, picking up the phone and using Outlook or Excel to track additional details (inclusive of all core best practices).

With that said, CRM is different from other software functionality such as sales forecasting where it depends on the complexity of the business, volume of customers etc. All modern ERP systems have at least a minimum level of CRM functionality, and so using CRM will make sense in most situations. The key question will be timing vs resources and benefit for your situation. With that said, not all clients choose to use the base CRM functionality provided in their ERP system. It depends on the system functionality needs that will best support your sales team and customer needs. Of course, not all CRM systems are created alike!

How to Select a CRM Software

You should pay attention to selecting the best software and partner to meet your business needs. As is true with best practices in ERP selection, selecting CRM software starts with your business requirements.

Collect your business requirements to support your CRM process. What functionality is important in developing a customer relationship management plan for your situation. For example, a few questions to consider in getting started include:

• Starting with the basics, will the software track contacts, customers, leads, and prospects?
• Will the software allow you to track contacts at each customer from different departments? For example, in several industries, the key point of contact is one department such as engineering or maintenance whereas the orders go through another department such as purchasing. You will want to keep track of key contacts, not just those related to the order.
• Will the software support tracking inventory agreements and service policies? To what degree?
• How sophisticated is the pipeline tracking? There are a large number of questions related to this topic.
• How does the software integrate with email? There are varying levels of integration options that can make or break success.
• How does the software integrate with social media and email communications? Again, each of these could break into a multitude of questions.
• Does the software have artificial intelligence (AI) capabilities?
• What advanced reporting and analysis capabilities are built into the software?

Next, research CRM software options. Although this appears easy to do online, it is far from easy to get to the appropriate level of detail to end up with software options in the appropriate price range with the most critical functionality features. As a globally recognized expert in selecting software, our Google searches only yield appropriate results less than 20% of the time. Frustrating! You don’t need a lengthy list. A few decent choices that meet the majority of your requirements will suffice.

Depending on your company size, complexity, investment budget, and other factors, you will perform a simplified or comprehensive RFP (request for proposal) where you compare the software options to your business requirements to narrow the selection options. Typically, you should demo 2 or 3 options to see how the software will be used to meet your business requirements. Track how each software satisfies your business requirements and focus on those critical to your process. It is easy to get lost in bells and whistles the software suppliers want to show you instead of focusing on what will drive value for your business.

In addition to comparing functionality, you’ll want to compare pricing and partners. Pricing is another black hole. Getting apples to apples pricing is nowhere near as easy as it appears, and it is always extremely misleading. Dig into pricing until you have a side-by-side comparison of like items, considering short term and long term. Typically it is best to use a total cost of ownership calculation over 5 or 10 years, depending on your circumstances.

Finally, dig into the partner. 80% of success is in implementation, and your partner will be integral to this result. Every supplier will have success stories and talk a good game or they will not be in business very long. In fact, there are more sharks in software sales than in almost any other industry. They sound wonderful, but when rubber meets the road, it is often a different story. Make sure you don’t marry the wrong partner while selecting the “right” software.

Using CRM Software

You will be performing customer relationship management processes prior to rolling out software. Thus, you can ramp up over time, starting with the top priorities from a functionality perspective that will drive results and minimize manual labor. For example, if you aren’t using a CRM software currently, start by tracking contacts. It will be easy to ramp up from there with potential client contacts. Build a rollout plan that best supports your business. You’ll gain a quick payback with CRM software if rolled out in a thoughtful way. For example, do NOT track unnecessary, nice-to-have information that ties up your sales team with keying into CRM software instead of talking with customers. On the other hand, tracking key information will provide exponential value when analyzed and is worth taking 5 minutes to input. Use common sense!

Incorporating into SIOP, also known as S&OP

CRM software will not achieve the intended results if not incorporated into a SIOP process (Sales, Inventory & Operations Planning). CRM is incorporated into the demand plan which is the “S” of SIOP and required to drive capacity and staffing, sourcing, long-lead time material, and customer and product priority decisions at a minimum. SIOP inclusive of demand planning is not a one-time process; instead it should be conducted on a monthly cadence, looking out at a 12-24 month horizon. Results will follow.

As clients gain traction, they are tempted to skip monthly cycles. Keep the priority focus on SIOP inclusive of your demand plans. If you focus on exceptions and changes, the process will be quick yet critical to keeping resources aligned on priorities and addressing changing conditions. Undoubtedly, with the level of volatility in today’s business environment, sticking to the process will yield exponential results. For example, one of our most successful clients is vigilant in prioritizing Executive SIOP meetings (and associated processes). Even in months where key executives believe there are no changes, 80% of the time something arises through the process that keeps them ahead of the curve in pivoting strategies or ensuring the alignment of demand and supply, and most importantly, the related resources. This client will undoubtedly be better prepared for the next curve ball.

If you want to pursue upgrading your demand planning process, upgrading your use of technology and/or incorporating into a SIOP process, review our SIOP webpage of resources or contact us to discuss further.

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Managing Increased Complexity with High OTIF & Efficiencies Using Technology

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NxtGen Nexus: The Importance of Customer Service “Employees follow people, not companies. Are you investing in leaders, and are your leaders leading?” comments Manufacturing and Supply Chain Expert Lisa Anderson, MBA, CSCP, CLTD, President of LMA Consulting Group Inc.

We are in a time period that will prove more important than almost any other because more companies will surge past the competition during these turbulent times, propelling them forward for years to come. Executives will have a choice – push the pedal to the floor and achieve success or be tentative and pull on the parking brake and slowly retreat and decline. One way to stand out from the crowd and push the pedal to the floor is to create a customer service edge. Undoubtedly, with the immense and widespread service failures, it is a unique opportunity to shine.

For example, on several recent trips, there were delays, shortages, and complications. Specifically, my first flight and connecting flight were both delayed with the first arriving 15 minutes after the connection was scheduled to leave the gate. Of course, there were lines everywhere, and if you call the airline, they have an automated person say they will return your call in 4 hours – long after flights can be resolved. Of course, travelers are frustrated. It’s no wonder as I paid twice what I’d typically pay for the delayed flights. I found a replacement flight for my connection on another airline on my own, and 10 minutes after purchasing it, I received an alert that it was delayed by an hour. Oh my goodness!

Click here for the full story.

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We are in a time period that will prove more important than almost any other because more companies will surge past the competition during these turbulent times, propelling them forward for years to come. Executives will have a choice – push the pedal to the floor and achieve success or be tentative and pull on the parking brake and slowly retreat and decline. One way to stand out from the crowd and push the pedal to the floor is to create a customer service edge. Undoubtedly, with the immense and widespread service failures, it is a unique opportunity to shine.

For example, on several recent trips, there were delays, shortages, and complications. Specifically, my first flight and connecting flight were both delayed with the first arriving 15 minutes after the connection was scheduled to leave the gate. Of course, there were lines everywhere, and if you call the airline, they have an automated person say they will return your call in 4 hours – long after flights can be resolved. Of course, travelers are frustrated. It’s no wonder as I paid twice what I’d typically pay for the delayed flights. I found a replacement flight for my connection on another airline on my own, and 10 minutes after purchasing it, I received an alert that it was delayed by an hour. Oh my goodness!

Rating Service – High End Restaurant or Pizza Hut?

From a restaurant perspective, apparently restaurants believe people no longer eat on Sundays and Mondays in California. Actually, they cannot find people. Similarly, on my recent trip for business travel, restaurants close on Mondays and Tuesdays in the town (perhaps Sundays as well, but we have yet to arrive early enough to eat in town). Thus, after driving further and eating at the only choice on Monday and Tuesday, we looked forward to eating at a high end, popular restaurant in town on Wednesday. We arrived at the restaurant thinking we had plenty of time to eat and work on a presentation for the next day because the door said it didn’t close for two hours. We talked with the server about an interesting dessert, and after 40 minutes or so, we asked to order dessert. We were told the kitchen closed 20-25 minutes ago, but we could stay for another 15 minutes while they cleaned up. We were surprised as no one mentioned we couldn’t order and that it was closing imminently. Proactive communication and service wasn’t on the menu.

After calling restaurants in nearby towns, we discovered everything would close in the next 20 minutes. Thus, I called Pizza Hut because we needed a place to work, and they said they would be open for another 80 minutes. Bringing back memories from high school, we pulled into Pizza Hut which is mainly open for deliveries. The server provided exceptional customer service, making us feel welcome and special. We were able to get a lot done and closed the place. She didn’t kick us out, but we decided to leave so that she could leave for the night. Next we went to the lobby of our hotel, fueled by the Pizza Hut server with new energy and a second wind, and we were able to complete our presentation. Even though I haven’t been to Pizza Hut in years, I was a fan and told all sorts of people about our experience. Would your employees go over and beyond for your customers when no one is watching?

Are Your Employees Providing a Customer Service Edge?

Employees follow people, not companies. Are you investing in leaders, and are your leaders leading? Just think about if you’ve ever seen an unhappy employee provide exceptional service? It is unlikely! As challenging as it is during these turbulent times, emphasize the value of customer service, starting with your employees and expanding to customers. Simply treat people as you’d like to be treated, and lead by example. That would be a great start for most clients……

Please keep us in the loop of your situation and how we can help your organization thrive during these times of volatility and disruption. There will be more winners created than at any other time than since emerging from the Great Depression. To gain additional ideas and insights on how to best navigate these volatile times and thrive, read our new eBook Thriving in 2022. Learning from Supply Chain Chaos. Download your complimentary copy.

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Every successful client is experiencing rapid growth and changing customer requirements. To support this growth in a scalable, profitable manner, a modern ERP system is not preferred; it is a base requirement.

Why Has Modern ERP Become Essential

Pre-COVID, although preferred, it was less essential in supporting significant improvement and enabling customer loyalty. It is always achievable to better utilize an ERP system (even in the worst of situations), and although this fact remains true, it is no longer providing a BIG enough step up and the flexible customization required to scale fast and efficiently enough to meet changing customer needs while maximizing EBITDA.

According to KPMG, for the majority of U.S. CEOs, the pandemic has meant an acceleration of digital transformation by months or even years. During an Inland Empire Economic Partnership Board meeting recently, it was announced that research shows that technology has accelerated by 7 years. Although there are several technologies considered a priority, modernizing and upgrading ERP is a cornerstone launchpad for growth. Clients and colleagues are seeing the critical importance of not only having a central database for performing business transactions but also one that enables a superior customer experience.

What a Modern ERP System Do For You

ERP systems provide a solid infrastructure which will support scalable, profitable growth. Taking orders, deciding what to purchase, planning what to produce, tracking operational progress, storing inventory, shipping orders, invoicing the customer and tracking costs should be commonplace in ERP. These systems should also allow for the automation and integration of business processes that support business growth and profitability. Modern ERP systems typically support the vast majority of business processes and allow for reporting and analysis of these business processes and transactions whereas legacy ERP frequently stop short at supporting the full needs of businesses in today’s business environment. Turning data into insights has also become critical.

Expanding Capabilities with Related Technologies

For example, a mid-market manufacturer had to upgrade because their system didn’t support credit cards or inter facility transfers. Although upgrading was a significant undertaking, they gained not only these foundational requirements, but they also were able to better track and manage inventory, understand costs and analyze margins after upgrading their ERP system. After ironing out go-live issues, they had an upgraded base and could expand with CRM (customer relationship management) capabilities as well as B2B/ B2C and e-commerce functionality so that they could grow the business successfully.

In another manufacturer, they had a highly customized ERP system that supported their current needs expertly; however, it didn’t support scalable growth. It was also highly dependent on programmers with specialized knowledge. This risk became evident when their top programmer tragically died in an accident. Although they were able to make it beyond that situation, they knew they had to upgrade their infrastructure to support their aggressive growth goals. Since the executives wanted to minimize risk, they started with accounting to strengthen their base, expanded with reporting/ business intelligence to gain insights for growing the business and then upgraded the base. By taking this approach, they also gained insights into data issues to address upfront to ensure success down-the-line. After upgrading to a modern ERP base, they planned to accelerate success by further automating operations to gain efficiencies and customer responsiveness.

Advantage Beyond a Solid Infrastructure

Modern ERP offers advantages beyond providing a solid infrastructure for growth. These types of systems have advanced reporting and dashboard capabilities (business intelligence) built into the system. Some offer an artificial intelligence component with predictive analytics as well; however, simply having the ability to slice and dice data to make decisions can support profitable growth. These systems also have extensions for IoT applications such as predictive maintenance, customer portals and e-commerce, and automation and robotics. There is significant investment into future technologies so that the software stays ahead of the changing needs of the business.

Although it might be tempting to jump to the latest exciting technology and skip the ERP upgrade, don’t be tempted by shiny objects. It is akin to focusing on window dressings when the walls are not yet in place. The most successful executives have a scalable infrastructure that supports the execution of their strategy. Start by making sure you have a modern ERP system that will support your business objectives. 

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Selecting and Implementing an ERP System

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The pace of change among manufacturers had been increasingly significantly before the pandemic, said Lisa Anderson, president of Claremont, CA base LMA Consulting Group, which specializes in manufacturing and supply chain strategies.

It’s no surprise that Covid-19 disrupted manufacturing companies across the globe. Like nearly all industries, manufacturing had to quickly—and fundamentally— alter business operations in the wake of the pandemic. What is surprising is how deep and game-changing the impact was for manufacturers, as supply chains dried up and consumers radically shifted their buying behaviors for everything from toilet paper to sporting goods. Manufacturers quickly realized they needed better tools for accurately forecasting ongoing changes in customer demand and stabilizing supply sources.

Manufacturing executives are also seeing the need to address long-term trends, such as serving the growing demand for personalized products and services tailored for specific customer segments. The importance of product personalization comes through in a recent global survey of 1,091 business leaders from Harvard Business Review Analytic Services conducted in December 2020, which included 137 executives within the manufacturing industry. One-quarter (26%) of manufacturing executives say they are highly likely to invest in personalized products and services over the next 24 months to support their customer experience (CX) strategy.

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Well, no doubt about it, when it rains, it pours. I had a tooth ache that lasted about a week, and so I called my dentist. They took an X-ray, and it didn’t really show anything; however, when looking with a microscope, they could see the fracture. We had to do exploratory work to try to see what was required. Unfortunately, they couldn’t find the end of it, and so they sent me to a specialist to take a 3D X-ray. Unbelievably, the 3D X-ray didn’t show it either. Thus, after another X-ray for good measure, we had to do an exploratory root canal (my first) part 1 to see if it could be saved. Of course, that didn’t clarify it either and so the specialist conferred with my dentist, and they decided to proceed with part 2 which will likely solve it for several years minimally. Let’s hope!

I love Broadway plays and since that isn’t possible in person, I thought we’d use a fun one with this post. Have you seen The Little Shop of Horrors? Well, I had the opposite experience. What stood out was the level of caring that went into the process. My dentist was truly concerned to minimize my pain, and you could see her struggle with what to recommend for what was best for me. She wasn’t thinking about her practice or what was quick so she could get back to her day. The customer experience was top of mind. Are you thinking about what is best for your customers?

One Tip to Implement This Week:

I find that I talk a lot about the customer experience. After all, it is what differentiates successful companies from average companies. What are you doing to stand out from the crowd?

1. Do you think about your customer’s outcomes or your outcomes?: What is your first thought? You don’t have to share but think about it. How do you get to know what your customer needs?
2. How do you know what your customer needs? Sure, start by asking; however, I find that more often than not, they don’t know. Instead, pay attention to what they aren’t saying. Read between the lines. I don’t always know what I need until someone shows me an example.
3. Is your entire organization thinking about your customer? Everyone should be responsible for the customer.
4. Will digital help or hurt? By no means should we always default to digital. On the other hand, if you aren’t thinking about it, you are missing the boat. Instead, don’t jump to conclusions. Use your common sense.

Consider these strategies to provide a superior customer experience and make an impact. Read more about these types of ideas to navigate and successfully emerge post COVID-19 in my free eBook Future-Proofing Manufacturing & Supply Chain Post COVID-19. Please send your feedback and stories. I will incorporate into an article, video or interview.

Stay safe & healthy.

The post A Fractured Tooth & The Power of the Customer Experience appeared first on LMA-Consulting Group, a supply chain consulting firm.