process improvement Archives - LMA-Consulting Group, a supply chain consulting firm https://www.lma-consultinggroup.com/tag/process-improvement/ Sat, 30 Mar 2024 06:41:23 +0000 en-US hourly 1 https://wordpress.org/?v=6.5 Lisa Anderson, Manufacturing & Supply Chain Expert Highlights Proactive Backlog Management as a Keystone for Elevating Customer Service in Manufacturing https://www.lma-consultinggroup.com/lisa-anderson-manufacturing-supply-chain-expert-highlights-proactive-backlog-management-as-a-keystone-for-elevating-customer-service-in-manufacturing/ https://www.lma-consultinggroup.com/lisa-anderson-manufacturing-supply-chain-expert-highlights-proactive-backlog-management-as-a-keystone-for-elevating-customer-service-in-manufacturing/#respond Mon, 20 Nov 2023 15:55:23 +0000 https://www.lma-consultinggroup.com/?p=22735 CLAREMONT, CALIFORNIA – November 20, 2023 –  In a business landscape characterized by unprecedented business volatility, maintaining stellar customer service emerges as a critical differentiator for companies navigating the ebbs and flows of the current market. Manufacturing and Supply Chain Consultant Lisa Anderson, MBA, CSCP, CLTD and President of LMA Consulting Group Inc., highlights the [...]

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CLAREMONT, CALIFORNIA – November 20, 2023 –  In a business landscape characterized by unprecedented business volatility, maintaining stellar customer service emerges as a critical differentiator for companies navigating the ebbs and flows of the current market. Manufacturing and Supply Chain Consultant Lisa Anderson, MBA, CSCP, CLTD and President of LMA Consulting Group Inc., highlights the pivotal role of backlog management in elevating customer service levels, especially significant in a landscape where 88% of buyers, according to Salesforce, deem experience as crucial as the product or service being offered. LMA Consulting Group specializes in supporting manufacturers and distributors in strategic planning and comprehensive supply chain transformation, focusing on enhancing the customer experience and robust business growth.

The decline in customer service, a nearly 20% drop according to Forrester, coupled with diminished customer patience, has spotlighted opportunities for companies to prioritize superior service. This is where proactive backlog management plays a vital role, ensuring high service levels, on-time-in-full (OTIF) delivery, short lead times and preemptive communication.

Backlog management can encompass a myriad of statuses and potential scenarios during order fulfillment, ranging from inventory shortages to waiting on customer approvals, purchase receipts, production engineering, international shipping paperwork or even dealing with credit holds and quality controls. “One of the secrets to success in enhancing service levels lies in implementing a proactive backlog management process. Transitioning from reactive to proactive stances can swiftly elevate customer service levels. We have seen it with a building products manufacturer where service levels increased from 38% to 90% by adopting a forward-looking view and assigning orders with tight timelines to specific people or departments to ensure on time fulfillment. We had an aerospace manufacturer elevate service levels from the low 60%s to the low 90%s by implementing a backlog process that tracked progress through multiple steps of the manufacturing process, adding capacity where needed, and introducing advanced technology solutions. It can be done and it delivers results.” states Ms. Anderson.

For deeper insights into navigating the complex landscape of global supply chains, download Ms. Anderson’s special report The Road Ahead: Business, Supply Chain & The World Order and her eBook SIOP (Sales Inventory Operations Planning): Creating Predictable Revenue and EBITDA Growth.

About LMA Consulting Group – Lisa Anderson, MBA, CSCP, CLTD

Lisa Anderson is the founder and president of LMA Consulting Group, Inc., specializing in manufacturing strategy and end-to-end supply chain transformation.  Ms. Anderson is a recognized Supply Chain thought leader by SelectHub, named a Top 40 B2B Tech Influencer by arketi group, a Top 16 ERP Expert to Follow by Washington-Frank, in the Top 10 Women in Supply Chain by Warner PR, in the top 55 Supply Chain & Logistics Experts by flexport, and a woman leader in Supply Chain by RateLinx.  Her primer, I’ve Been Thinking, provides strategies for creating bold customer promises and profits. An expert on the SIOP process (Sales, Inventory Operations Planning), advancing innovation, and making the supply chain resilient, Ms. Anderson is regularly interviewed and quoted by publications such as Industry Week, Bloomberg, Fox News and The Wall Street Journal. For information, sign up for her Profit Through People® Newsletter or for a copy of her book, visit LMA-ConsultingGroup.com.                 
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Media Contact Kathleen McEntee | Kathleen McEntee & Associates, Ltd. | p. (760) 262 – 4080 | KMcEntee@KMcEnteeAssoc.com

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Sustainability Driving Triple Bottom Line in Manufacturing and Logistics https://www.lma-consultinggroup.com/sustainability-driving-triple-bottom-line-in-manufacturing-and-logistics/ https://www.lma-consultinggroup.com/sustainability-driving-triple-bottom-line-in-manufacturing-and-logistics/#respond Wed, 08 Nov 2023 14:46:20 +0000 https://www.lma-consultinggroup.com/?p=22539 With sustainability increasing in popularity and the carbon footprints of end-to-end supply chains evaluated, innovation and manufacturing will skyrocket.

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With sustainability increasing in popularity and the carbon footprints of end-to-end supply chains evaluated, innovation and manufacturing will skyrocket.

Top manufacturers are prioritizing common-sense sustainability solutions to drive triple-bottom-line results. In fact, there is a significant opportunity for U.S. manufacturers to expand capacity and gain business with a significant advantage in sustainability over China and other manufacturing options. As sustainability continues to increase in popularity and end-to-end supply chain carbon footprints are evaluated, U.S. manufacturing will skyrocket. Technological advances and innovation drive sustainable manufacturing, and, according to the WIPO Index, the United States is one of the top countries in innovation.

Manufacturers are making significant strides in sustainability. There is a focus on sustainability in materials, manufacturing, product life cycle, and logistics. There are countless ideas for improving performance. For example, manufacturers are building sustainability into product design and partnering with suppliers to reduce materials, minimize waste, design for low-impact materials, and transport with a sustainable supply chain. In manufacturing, they can optimize processes to consume less materials and conserve energy and natural resources. There are a host of logistics programs rolling out across the board as well. For example, as regional manufacturing occurs, the distances travelled will be reduced, and as cleaner, energy-efficient modes and options are pursued, sustainability improves.

Pertinent Examples

According to GE, it launched the CFM RISE (Revolutionary Innovation for Sustainable Engines) Program as a part of its commitment to achieve aggressive goals for a sustainable future, including reducing fuel consumption and CO2 emissions by more than 20%. P&G is focused on water usage. Its goal is to increase water efficiency by 35% per unit of production and to recycle five billion liters in its facilities worldwide. Tesla is continually focused on sustainable manufacturing. For example, Tesla recently announced its goal to reduce the use of silicon carbide by 75%, significantly reducing its use of rare earth metals. Instead, the use of a permanent magnet motor will allow the company to scale production more efficiently.

Similarly, a healthcare products manufacturer put together a program to partner with suppliers to redesign materials to decrease usage without impacting product quality and manufacturability. Additionally, the manufacturer brought in the equipment supplier and raw-material supplier to assess how to best utilize its machine to minimize usage and waste, and installed visual inspection equipment to minimize waste due to quality defects. And finally, the manufacturer also brought its customers into the process to assess packaging to minimize plastic and packaging materials while ensuring that the product met the customer requirements, which positively impacted the sustainability of transportation as well.

Regional Manufacturing and Logistics Examples

For a multitude of reasons stemming from the pandemic, including supply chain risk and political risk, the transition to regional manufacturing clusters and reshoring/nearshoring of manufacturing is rapidly increasing in the United States and Europe. China is far less sustainable. For example, China is using the least efficient energy source that emits twice the amount of greenhouse gas than natural gas. According to NPR, China permitted two coal plants a week in the last year, which is six times more than the rest of the world combined. On the other hand, the United States uses mainly natural gas and has advanced manufacturing practices, frequently producing with the lowest emissions in the world.

The logistics arena has also made vast improvements. For example, according to PMSA, the San Pedro Bay Ports together saw steep and dramatic emissions reductions in 2022. The combined numbers reveal drops of 90% for diesel particulate matter (DPM), 97% for sulfur oxides (SOx), 63% for nitrogen oxides (NOx), and equally remarkable declines for other emission categories, compared to the baseline year of 2005. Cleaner, smarter transportation is also a high priority with a multitude of sustainability initiatives being pursued across all modes of transportation including rail, truck, pipeline, and air.

Innovative organizations are partnering with their end-to-end supply chain to create sustainable supply chains. The best-in-class companies are driving the triple bottom line with benefits to people, profit, and the planet. As sustainability gains momentum and end-to-end supply chain visibility is achieved, a manufacturing resurgence will follow.

 

If you are interested in reading more on this topic:
Sustainability Gains but the Technology Isn’t Always Ready

 

Originally published in Adhesives & Sealants Industry, November 2023

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Leap Forward and Leverage ERP & Supply Chain Technologies https://www.lma-consultinggroup.com/leap-forward-with-erp-supply-chain-technologies/ https://www.lma-consultinggroup.com/leap-forward-with-erp-supply-chain-technologies/#respond Fri, 07 Jul 2023 09:27:15 +0000 https://www.lma-consultinggroup.com/?p=18915 ERP and related technologies should only be a priority if you want to grow and succeed for decades to come. If not, it will be the same as if you said you wanted to stick with the horse and buggy instead of leaping into a Ford.

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Should ERP & Related Supply Chain Technologies Be a Priority?

ERP and related technologies should only be a priority if you want to grow and succeed for decades to come. By utilizing ERP and supply chain technologies, you’ll maximize your efficiency and drive customer satisfaction. If not, it will be the same as if you said you wanted to stick with the horse and buggy instead of leaping into a Ford.

To put this into perspective, according to Deloitte Insights (from 20220), manufacturers’ average IT budget as a percentage of revenue is 2.14%. Of course, it depends on whether you are small or large, but the ballpark remains valid. If focused on ERP (as a modern ERP system is vital to success), a rule of thumb is that you’ll spend 5-7% of revenue (for the full project price and implementation cost). How do these compare with your budgets?

Why Should ERP & Related Technologies be a Priority?

The future will be for those who are innovating and using technological advances. Manufacturers and distributors are navigating a mountain of geopolitical, natural resource and rare earth issues in addition to navigating interest rate impacts and a host of other economic challenges that create negative headwinds on preparing for profitable growth and contributing to key financial indicators. Instead of pushing a boulder uphill, it makes sense to look for new solutions and strategies to solve old issues. One of these strategies is to maximize the power of ERP and related technologies.

Will my ERP System Suffice?

Of course, the answer to whether you should upgrade your ERP system is that “it depends”. Upgrading your ERP system isn’t for the faint of heart. 80% fail to achieve the intended results. Yet having a modern ERP system that supports your needs is absolutely essential to support growth plans.

No matter your situation, you can start immediately by better leveraging your underutilized asset. In almost 20 years of consulting, I’ve yet to find a client that couldn’t better utilize their ERP system to attain bottom line business results. Read our comprehensive article to find out how – The MacGyver Approach: Leveraging Your Underutilized ERP Asset. For example, an aerospace manufacturing client was struggling to provide high service levels to their customers while dramatically reducing their inventory levels with a wide breadth of products to support their growth goals. In addition to process improvements and common goals, a key ingredient to success was leveraging additional ERP functionality to improve their production and inventory planning processes across their production facilities.

However, as customer expectations have increased, supply chains have become increasingly complex, and margins have been squeezed with rising costs, having a modern ERP system is the only viable path forward for sustainable success. How do you know if your ERP system will suffice and whether an upgrade should be a priority? Read our article on find out the answer. If you determine you should modernize your ERP system, check out our guide for selection and implementation success.

What Technologies are Required to Support Success?

Again, of course, the answer is “it depends”. With that said, the answer is NOT that you can afford to sit still. What is absolutely clear is that only manufacturers and distributors that pursue advanced technologies will thrive in today’s volatile and complex age.

There are countless technologies that might be appropriate. No client should pursue all of them. If everything is a priority, nothing is a priority. The key is to review your growth plans and assess your SIOP (Sales Inventory Operations Planning) process results to set your technology priorities. A few of these technologies that pop to mind include:

  • Robotics: Almost every client is testing, trialing or using robots. There has been controversy over people vs robots in some circles although manufacturers are flipping that equation to people and robots. Read examples in our article, People vs Robots. It doesn’t make sense in every situation. In fact, one equipment manufacturing client chose not to pursue a specific robot because it didn’t provide a return on investment and slowed down the process after thorough testing. On the other hand, another client continues to add welding robots which automates repetitive tasks.
  • Artificial intelligence: Demand planning, also known as sales forecasting, is important for every company, and artificial intelligence can always add value to the forecast yet is especially key for hard to predict patterns such as those in consumer products industries. AI is used in countless manufacturing and supply chain technologies. Check out our recent article on AI, titled “ChatGPT & AI: Good or Bad?“.
  • Predictive analytics: Business intelligence, big data, and predictive analytics are proving essential. Every ERP system can provide you with an overwhelming amount of data. The issue is sifting through the data to get meaningful information for decision making. Read our article to get strategies to turn data into insights. Taking that a step further to using your data to predict the future can give you an advantage over your competition.
  • E-commerce (B2B and B2C): Consumer expectations continue to increase. After all, who doesn’t expect immediate deliveries from Amazon? What goes on behind the scenes to make that happen isn’t a no brainer. Read our articles on manufacturing opportunities in e-commerce and B2B, B2C & Associated Technology.
  • Digital twins: What could be better than simulating your factory, products, your supply chain etc.? Digital twins enable better designs, planning, and much more to contribute to customer success and EBITDA growth.
  • Autonomous capabilities: These capabilities are used widely in manufacturing environments to supply or move materials and components; in logistics and distribution environments to move items and in transportation and goods movement to move products.
  • And many, many more such as drones, blockchain, additive manufacturing, mixed reality/ metaverse, internet of things (IoT), 5G, etc.

The Bottom Line

Jump into the world of technology. Bring on experts and deep dive into those areas that will provide significant benefits to your business. Minimally, you should test and trial the use of advanced technologies. Perhaps you’ll even combine technologies in a new way or develop a new technology to support your profitable growth.

Did you like this article?  Continue reading on this topic:
Modernize Your ERP System: A Guide for Selection & Implementation Success

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SIOP / S&OP: Don’t Reshore; Move Manufacturing Forward https://www.lma-consultinggroup.com/siop-s-move-manufacturing-forward/ https://www.lma-consultinggroup.com/siop-s-move-manufacturing-forward/#respond Wed, 05 Jul 2023 21:47:13 +0000 https://www.lma-consultinggroup.com/?p=18905 Globalization is not working. Geopolitics abound. For example, the war in Russia and Ukraine ravages on. There are concerns around the nuclear power plant in Ukraine, occupied by Russia. And that is aside from the impact on oil, food, commodities and much more. China continues to threaten Taiwan and has already changed Hong Kong. It is no longer the same for business. There are countless risks throughout the world.

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Globalization is no longer working

Globalization is not working. Geopolitics abound. For example, the war in Russia and Ukraine ravages on. There are concerns around the nuclear power plant in Ukraine, occupied by Russia. And that is aside from the impact on oil, food, commodities and much more. China continues to threaten Taiwan and has already changed Hong Kong. It is no longer the same for business. There are countless risks throughout the world. Read our recent article on geopolitics, natural resources, and the supply chain to learn about the larger scope of these risks. The bottom line is that globalization is no longer working. Use SIOP to devise a new path forward.

SIOP to Devise a New Path Forward

SIOP (Sales Inventory Operations Planning), also known as S&OP is a process that will help you navigate changing business conditions (such as the fall of globalization). It provides a proactive view into your demand plan (sales forecast) so that executives can evaluate changes required to your manufacturing and supply chain footprint to successfully and profitably supply the revenue forecast. If you are dependent on China, Russia, Ukraine or other risky countries for manufacturing or anywhere in your supply chain (ie. your suppliers’ suppliers’ supplier) or if your customers are dependent, you should reevaluate. SIOP is a process/ tool that will help you with this process.

Will reshoring and nearshoring suffice?

In our recently released special report, “The Road Ahead: Business, Supply Chain & the World Order“, reshoring, nearshoring and friend shoring are discussed. Every executive should be evaluating these strategies to regionalize your supply chain if you want to have a sustainable business for the long term. A few of the key points include:

  • Reshore: Certainly, smart companies are moving manufacturing closer to customers (which typically is bringing it back to its country of origin if that is where the customer base is located). Extended lead times and delays were unacceptable during the pandemic; however, much worse than that is the fact that executives can no longer “count” on reliable sources of supply in today’s risk ladden environment.
  • Nearshore: If your product requires a significant amount of labor to produce, you might want to nearshore, meaning move manufacturing to a country close to your customers. For example, Mexico has a lower labor rate than the U.S. yet is close (and doesn’t require a container ship to transport), and so several companies are producing in Mexico if they have a high labor content in their products.
  • Friendly shoring: Friendly shoring, also known as friend-shoring, is the same as nearshoring except that you have to be careful about where you are locating manufacturing. Is it a friendly nation to your ‘home’ location with the bulk of your customers? If not, if global conflict arises, you will be left with the same geopolitical risks.

Read more about these strategies in our blog category reshoring/ nearshoring. Although reshoring and nearshoring are important strategies, they will not suffice. China produces at scale. There is no way companies can move enough manufacturing to suffice by itself. Many executives think that they will be OK because they diversified to other southeastern Asia countries. That is not enough. Additionally, according to the Economist, China has expanded its influence throughout southeastern Asia, making these manufacturing havens such as Vietnam riskier. The other big powerhouse and hot spot is India. As discussed in our special report, India offers promise; however, it also comes with infrastructure risks, water risks etc.

The bottom line: Reshoring/ nearshoring is not enough.

Expand Manufacturing Capabilities

Don’t just think about moving manufacturing. Why risk your current supply? If your outsourced company finds out you are reshoring/ nearshoring, you will go to the bottom of the priority list immediately. That will not help your service or viability. Why not expand your manufacturing capabilities near your customers so that you can make a seamless transition? Unfortunately, it is unlikely you will get your equipment and other assets out of China. You can always try that after you have sufficient capacity near your customers.

Whether you insource or outsource doesn’t matter. The key point is that you need to expand your manufacturing and supply chain capabilities ASAP. Start by thinking through several questions:

  • Equipment capabilities: Do you have any manufacturing presence near your customers? If so, take an inventory of your equipment, assets and infrastructure.
  • Talent capabilities: Take an inventory of your talent capabilities. What types of skills do you have? Where are they located? What risks are associated with your talent?
  • Industry 5.0 (manufacturing and supply chain technologies): Take inventory of your capabilities, ease of transition to these new concepts, etc. A few of the top technology enablers include industrial blockchain, drones, exoskeleton robots, additive technology, 5G and beyond, and mixed reality to achieve a superior customer experience, hyper customization, a responsive and distributed supply chain, experience activated (interactive) products, and a return of manpower to factories.
  • ERP system capabilities: Will your ERP system support your transition and expansion needs? Do you have a supplier that is investing heavily to keep up with the latest technologies and incorporating artificial intelligence (AI), internet of things (IoT), predictive analytics, e-commerce (B2C, B2C), WMS, advanced planning and more.
  • Process capabilities: Do you have the appropriate processes to support both strategy and tactics that will be required to navigate the next 10+ years? From a strategy perspective, you should have a SIOP (Sales Inventory Operations Planning) process in place to determine how to best navigate changing conditions to be prepared to supply your ideal customers and achieve profitable growth. From a tactics point-of-view, you will need the execution capabilities to support SIOP which is known as S&OE (Sales & Operations Execution). These processes include demand planning, production planning, replenishment planning, capacity planning, material planning, production scheduling, logistics planning, labor scheduling,
  • Innovation culture: The only way to succeed in the next decade is with innovation. Start creating a culture of innovation. It isn’t something you can dictate.
  • Supply chain capabilities: In addition to demand and supply planning capabilities, you need to elevate to the SIOP process to make sure your logistics, distribution and transportation capabilities will support your changing circumstances.

There is no time to waste in building your manufacturing capabilities. By performing a quick assessment, you’ll know where to focus.

Innovation: Develop New Manufacturing Capabilities

Beyond simply expanding manufacturing capabilities, develop new manufacturing capabilities. Innovate. Create new technologies and advanced capabilities. The future will belong to those who can manufacture to scale while maintaining resiliency and profitability. When you develop new capabilities, choose to locate your manufacturing next to your customers. For example, additive manufacturing (3D printing) enables for on demand production near the point of use (customer, consumer). Innovate and find ways to utilize this technology, combine with other technologies and capabilities, develop new and you’ll surpass the competition and secure your market leadership position for decades to come.

Refer to our SIOP webpage for more information, our blog (SIOP category) for hundreds of articles and learn more about SIOP and what’s important for a successful implementation in our new release eBook, SIOP (Sales Inventory Operations Planning): Creating Predictable Revenue and EBITDA Growth. If you are interested in talking about how to improve profitability, free up cash, and/or improve service, contact us.

Did you like this article?  Continue reading on this topic:
SIOP/ S&OP Playbook: Creating Predictability & EBITDA Growth

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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!

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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.

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Common Sense Manufacturing Practices Driving Sustainability Improvements https://www.lma-consultinggroup.com/common-sense-manufacturing-practices-driving-sustainability-improvements/ https://www.lma-consultinggroup.com/common-sense-manufacturing-practices-driving-sustainability-improvements/#respond Wed, 09 Nov 2022 20:41:43 +0000 https://www.lma-consultinggroup.com/?p=18051 Posted in Adhesives & Sealants Industry, November  2022 With the increase in interest in sustainable materials and manufacturing, there will be a significant opportunity for U.S. manufacturers that use common sense, good manufacturing practices. In fact, because manufacturers have realized that it is far less environmentally friendly and energy efficient to produce in Asia, India, [...]

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Posted in Adhesives & Sealants Industry, November  2022

With the increase in interest in sustainable materials and manufacturing, there will be a significant opportunity for U.S. manufacturers that use common sense, good manufacturing practices. In fact, because manufacturers have realized that it is far less environmentally friendly and energy efficient to produce in Asia, India, and the like, as sustainability increases in popularity and end-to-end supply chain carbon footprints are evaluated, U.S. manufacturing will soar. Technological advances and innovation drive successful sustainability in manufacturing, and, according to the World Economic Forum, the United States is one of the top countries in innovation.

Are you focusing on sustainable manufacturing? Successful companies are stepping up their efforts in sustainability. There are countless ways to improve sustainability while following common sense manufacturing practices. For example, manufacturers have rolled out lean initiatives, maintenance improvements, and machinery and equipment upgrades that have reduced the waste of materials. There has also been significant focus on rolling out improvements to reduce energy, material, and water waste. Additionally, companies have started using cleaner energy such as natural gas and renewable sources.

Pertinent Examples

According to Siemens, Coca-Cola HBC Australia has a priority to be as environmentally friendly and carbon efficient as possible in manufacturing. It has invested in a high-speed line that is not only one of the fastest in the world, but also energy efficient and water efficient. Additionally, 100% of the electricity comes from renewable sources, and Coca-Cola HBC Australia has put metrics and reporting in place to measure energy and water consumption.

Similarly, an absorbent products manufacturer focused on how to reduce materials, packaging, waste, and transportation costs to achieve the win-win of margin improvement and carbon-footprint reduction. Since pulp is one of the most water-intensive manufacturing processes, the manufacturer focused attention on updating and maintaining equipment, waste reduction and recycling, and auditing water usage. In the converting process, there was an intense focus on reducing waste and scrap by working with equipment suppliers, engineering, and operations resources, and by partnering with suppliers on material development. The company partnered with several suppliers to adjust material compositions and to jointly develop materials to run more efficiently on the lines with 20%+ less scrap and to reduce material composition without impacting product quality.

From a transportation standpoint, the R&D engineers and the packaging engineers redesigned the products, packaging, and manufacturing process to compress the product as much as possible without impacting quality. They also reduced the packaging materials and designed the product to maximize the pallets that would fit on a truck. Additionally, the logistics professionals implemented a transportation management system (TMS) to analyze transportation routes, carriers, and how to maximize the number of boxes on a truck. The system put together multiple-stop truckloads for shipping lanes to minimize transportation expenses as well as the carbon footprint. The bottom line equated to a 20-40% advantage.

A building products manufacturer focused attention on electricity costs and usage. It pursued several improvements to become more energy efficient. In addition to partnering with the local electric company and hiring an energy expert, the company conducted an energy audit and put together energy plans. It incented its people to work in non-peak hours to strategically schedule downtime during peak hours. The company also retrofitted and upgraded equipment, optimized air compressors, and improved its industrial furnace energy efficiency.

Resilient and successful organizations are partnering with suppliers on material formulation and adjustments, partnering with equipment manufacturers to optimize the use of the equipment to minimize waste and maximize efficiency, and are innovating within their organization to find ways to reduce energy, water, and material usage. Sustainability will not occur without internal and external focus. The most successful companies are focusing on win-win-win strategies to impact people, profit, and the planet. As sustainability gains momentum and end-to-end supply chain visibility is achieved, there is an opportunity for a U.S. manufacturing renaissance to follow.

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Are You Ready for a Systems Transformation? https://www.lma-consultinggroup.com/are-you-ready-for-a-systems-transformation/ Wed, 18 Jul 2018 18:09:44 +0000 https://www.lma-consultinggroup.com/?p=6708 The need for a systems transformation seems to be arising more frequently lately.  How do you know if it is time to consider a systems transformation?  Let's start by defining a systems transformation. 

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The need for a systems transformation seems to be arising more frequently lately.  How do you know if it is time to consider a systems transformation?  Let’s start by defining a systems transformation.  In essence, a systems transformation is an upgrade of the way you perform business inclusive of your people (allocation of resources, skillsets, etc.), processes, systems and information flows/ collaboration partners.  

Although there is never a bad time in terms of elevating your business performance, the investment and disruption might not be ‘worth it’ – does the return on investment make it the ‘right’ time?  

Here are questions to ponder in answering that question:

  1. What are your growth plans? – If you are performing well and growth is slow, you are unlikely to require a systems transformation. However, if you expect solid levels of growth, you’ll need one. There are two reasons: 1) Even if you are providing an exceptional customer experience currently, to maintain that with growth is a different ballgame. 2) As you grow, if you don’t want to add people to support each new level of growth, you’ll need to devise systems to grow in a scalable, profitable way.
  2. Will your margin levels sustain your business needs? – Of course, no one would complain about increasing margin; however, the key question is what has to be done to achieve the result? Take a look at whether your profitability and margin levels are sufficient to satisfy stock price expectations, investor needs, reinvestment plans, business valuation goals etc. We have run across “cash cow” businesses that yield enough profit for the owner’s lifestyle and objectives. There might not be a reason to invest in an upgrade. After all, there is risk and disruption with every activity of this magnitude.
  3. What are your customers’ expectations? – No matter your growth and profitability, if your customers’ expectations are changing or increasing (as they often are in today’s Amazonian environment), the key question is whether you’ll be able to meet them with your current setup. We see that it can go either way – depends on the industry, your customers, the marketplace etc.
  4. What are your employees expectations and capabilities? – Will your employees stick with you if everything remains status quo. This can completely depend on your employees. We have run across people who prefer “what works” and are quite happy not to upset the apple cart. On the other hand, we have also seen many job seekers look for new opportunities because the executives weren’t interested in growth – the company’s or the employee’s. It is important to think through what will happen. If you choose the status quo and your employees don’t align, it might force you into a different strategy, and you’ll be worse off for not thinking proactively.On another note, if you don’t have employees capable of leading a systems transformation, you will need to shore up your team. Certainly you can supplement with short-term resources to fill in gaps and consultants to advise on skills not required over the long-term but you might also need to fill in gaps within your team. Don’t overlook this critical component but also don’t let it deter you from making the leap.
  5. Do you have the funds? This is the one that deters most executives. It is quite tempting to hold off until later when it seems like it is a ‘better time’. However, are you defining better time as one when you feel better or one as defined by the questions above? As my consulting mentor says, there is always money. It is a matter of priority. Recently we ran into a client that never has borrowed money. It can be a smart and prudent strategy if it supports your business objectives; however, the CEO was questioning whether he should continue this strategy. If it is the ‘right time’ for an upgrade, and it will provide a return on investment over the long-term, he should absolutely borrow to fund the near-term investment to gain the value down-the-line.Of course, that doesn’t mean you should dig a hole the size of the Grand Canyon to fund your systems transformation. We have seen many executives accidentally throw money out the window when it wasn’t the best timing or get carried away and spend ‘too much’. In these cases, you might never recover from your upgrade! Gain advice from experts with an eye to return on investment. Keep in mind that taking prudent risk will be required!

Give a systems transformation some thought. What would you accomplish?  Is it the right time?  If you’d like a second set of eyes to evaluate these questions, contact us.

© Lisa Anderson

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A Systems Checkup https://www.lma-consultinggroup.com/a-systems-checkup/ Mon, 05 Feb 2018 20:34:38 +0000 https://www.lma-consultinggroup.com/?p=5966 Early in the year is an appropriate time to perform a systems audit.  Most clients could benefit from this at any time of the year as we often discover some significant gaps. 

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Early in the year is an appropriate time to perform a systems audit.  Most clients could benefit from this at any time of the year as we often discover some significant gaps.  A subset of the questions we look into further include:

  1. Do you have clarity of your current processes? It certainly seems apparent to start here but there are many clients who would check a box less than a “B” rating.  How about you?
  2. Do your people and/or facilities perform processes in a standard way? Do you want them to do this?  Or do you encourage differentiation?  There is no right answer across-the-board here! 
  3. Do you know how to utilize your ERP system to support your core processes? Do you hunt and poke around until you figure it out or is there clarity for the basic elements of the process?  Perhaps take a step back – does anyone know how to use the system to perform these processes?
  4. Do you look for opportunities to further leverage your ERP system by joining user groups, going to conferences, brainstorming with your team etc? The vast majority of companies use 20% of an ERP system’s functionality.  Moving the needle to 30% of the best functionality for supporting your business objectives can accelerate results.
  5. How do your processes and systems interface with your customers, suppliers and other supply chain partners? If you don’t know, find out!  You might be missing a HUGE opportunity.

Lisa Anderson

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Kaizens & the Importance of Metrics https://www.lma-consultinggroup.com/ibt-december-18-2017/ Mon, 18 Dec 2017 14:48:49 +0000 https://www.lma-consultinggroup.com/?page_id=5820 My colleague and I led a Kaizen workshop on metrics last week with a process manufacturing client.  It is always interesting to brainstorm which metrics are the most relevant in tracking a company's success.  They are NOT always the same. 

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My colleague and I led a Kaizen workshop on metrics last week with a process manufacturing client.  It is always interesting to brainstorm which metrics are the most relevant in tracking a company’s success.  They are NOT always the same.  Companies are in different industries; they are different sizes; the profit drivers of the business are different; executives’ focus is different…..and the list goes on.   However, every business should take a few minutes to strategize on metrics.  Do you know what you are doing AND whether the metrics you are tracking are relevant to your success?

One tip to implement this week: 

As we said in kicking off the metrics Kaizen, it can be a great place to start by taking stock.  What are you tracking already?  Why?  Do you make decisions based on the metrics you track?  If not, why not?  In essence, take a pulse.  Next, it can be quite valuable to gain feedback on what should be tracked.  Have you asked the people talking with customers on a daily basis?  How about those producing and shipping to your customers?  I bet they will have something to say!  Certainly, executives always have a wish list for metrics.  Do you know which metrics are on the list?  

Although you might be tempted to jump on the long list you are likely to generate in talking with all the stakeholders in the organization, don’t do it!  Make sure to understand the impact.  Which will lead to decisions that will impact customers?  Which are likely to drive profitability?  Start with a small number.  Prioritize and start using for decision-making before you move on. 

November 23, 2017

© Lisa Anderson

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Which Business Best Practices Do Top Notch Trusted Advisors See? https://www.lma-consultinggroup.com/which-business-best-practices-do-top-notch-trusted-advisors-see/ https://www.lma-consultinggroup.com/which-business-best-practices-do-top-notch-trusted-advisors-see/#respond Thu, 05 Oct 2017 20:35:27 +0000 https://www.lma-consultinggroup.com/?p=11424 In my ProVisors ODAM (Ontario-hosted Distributors and Manufacturers group – don’t you love the play on words?) meeting this month, we discussed business best practices we’ve seen with our manufacturing and distribution clients.

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Best business practices, this way…. In my ProVisors ODAM (Ontario-hosted Distributors and Manufacturers group – don’t you love the play on words?) meeting this month, we discussed business best practices we’ve seen with our manufacturing and distribution clients. It was a fascinating discussion as our group is diverse and consists of the most respected attorneys, CPAs, commercial insurance, business financial advisers, and consultants from around Southern California. Yet, we agreed rather quickly on core best practices. Thanks to Ron Penland for making the meetings engaging and trend-worthy.

Here are some of the top themes surrounding best practices:

  • Start by understanding financial statements and cost – it’s interesting how often this arises with our clients.
  • Look for the value add.
  • Find ways to scale without increasing costs. There are many options such as leveraging technologies, best practices, trade associations and more.
  • Leadership equals profit improvement. End of story.
  • Don’t start planning your exit “too late”.
  • Consider process improvement techniques such as lean manufacturing, SIOP (sales, inventory and operations planning), etc.
  • Be aware of your indicators and metrics.

More Best Practices

Are you reliant on figuring everything out yourself? We hope not! The most successful people find groups, attend seminars and conferences, engage with trade associations and interact with others who are up-to-speed on the latest trends and timeless success traits. If you think you might need to go a step further, feel free to contact us and we’ll suggest a few strategies for you.

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