The Minimum Wage Hike

California’s minimum wage went up to $20/hr. for fast food restaurants with at least 60 locations nationwide that do not make bread. This law is causing widespread unintended consequences. For example, Fosters Freeze in Lemoore closed suddenly after the wage hike. Mod 5 Pizza is closing five locations. There are widespread price increases including at In n Out, Burger King and more. Significant layoffs are also occurring at restaurants like Pizza Hut, Round Table Pizza, and Auntie Anne’s as companies determine how to deal with the wage hikes while maintaining profit levels. Some franchise owners are “on the move” to states with less regulation such as Nevada. It will also negatively impact manufacturing and supply chain as companies compete for resources and increase prices. The Skills Gap and misalignment of high-skilled and low-skilled jobs will worsen.

More Shortages & Sky High Prices…..NOT Chocolate!

The price of cocoa has doubled in the last year. After three years of poor cocoa harvests with a weak outlook, the supply of cocoa has been slashed. Thus, prices are escalating and shortages are becoming widespread. Processing plants are saying they cannot afford to purchase the beans. For example, 60% of the world’s coca is produced in Africa’s the Ivory Coast and Ghana, and these plants have stopped or cut processing. Unfortunately, there is a massive misalignment of demand and supply which is creating supply chain shortages and causing inflationary pressures. In addition, substitutes are starting to occur. To read more about persistent shortages, see our article, “Supply Chain Shortages Remain a Concern“.

Egg Inflation

The largest producer of fresh eggs, Cal-Maine Foods, Inc. temporarily shut down one of its facilities due to the bird flu. It also resulted in the depopulation of 1.6 million hens. These issues are bound to lead to further price increases. Egg prices increased over 8% in the last month, have more than doubled since before the pandemic, and are bound to go even higher as potential shortages loom. What is the bottom line? Supply and demand misalignment is creating havoc throughout the supply chain.

It Isn’t All About Food

Oil and gas prices are increasing again, which will have an impact on countless products from medical devices to electronics and industrial machinery. Since the supply chain has been thrust into chaos throughout the world (listen to our recent Supply Chain Chats on what’s going on in the global supply chain), container shipping rates are increasing. And after the recent bridge collapse in Baltimore, the automobile supply chains have been disrupted, and it is likely to lead to inflationary pressures. No matter the product, supply chain risks have been heightened.

How to Navigate

Unfortunately, there is no easy answer and magic wand to resolve the shortages and realign demand with supply. On the other hand, the focus of SIOP (Sales Inventory Operations Planning) is to align demand with supply and provide the visibility and insights to proactively navigate these rough waters. For example, clients are reallocating capacity among production facilities, making make vs buy decisions, offloading to supplement short-term spikes in demand, and maximizing customer and product profitability with a SIOP process. To learn more about these strategies, download our complimentary book, SIOP: Creating Predictable Revenue and EBITDA Growth.

In addition, there is no doubt the proactive clients are finding ways to leverage ERP systems and advanced technologies to automate, digitize and better navigate these trying circumstances. For example, a healthcare products manufacturer is using artificial intelligence and robotics to produce standard product with minimal resources so that they can dedicate their high-skilled talent to their complex product lines supporting aerospace and defense. Another client is pursuing additive manufacturing/ 3D printing to get a leg up on the competition and bring down lead times to support growth plans. There is plenty of opportunities if you look for them!

If you are interested in reading more on this topic:
How Do You Rate in Your Supply Chain?

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Manufacturers wish they left supply chain shortages behind after the pandemic, but they remain top of mind. Concerns remain. According to KPMG, “71% of global companies highlight raw material costs as their number one supply chain threat for 2023.” And the trend isn’t ceasing. According to a survey by LeanDNA and Wakefield Research, supply chain shortages remain a leading concern for manufacturers as they look to the future.”

In fact, if you look at the pharmaceutical industry, shortages have been creating havoc. For example, there have been shortages of over-the-counter drugs and prescription medications for ADHD, cancer and diabetes have been widespread. There has been commentary about a spike in demand, but there are also comments about manufacturing delays. Of course, this is before we discuss the state of logistics disruption.

In addition to product, material and healthcare shortages, clients are experiencing a severe shortage of high-skilled talent and are struggling to upgrade ERP systems and related technologies. These issues are aggravating the shortage situation as multiple clients have the lack of system support creating further shortages and work stoppage in addition to frustrating their employees.

It is simply creating havoc as people jump into jobs they are not prepared to execute, and Executives are struggling to understand why their resources no longer seem to have the expertise they used to have. Worse yet, if they don’t realize this is occurring, the situation gets worse as employees make poor decisions and struggle to keep up. Refer to our article, Where the Talent Has Gone & Strategies for Success.

Strategies for Success

Customers will not suffer endlessly as shortages persist. They will find alternative sources of supply, source from different regions of the world, find backup sources, search for suppliers that can provide visibility and status of the end-to-end supply chain and invest in reshoring, nearshoring, and expanding regional manufacturing footprints.

Thus, proactive executives are getting ahead of these challenges. We have no doubt that the companies that can supply critical items in the next several years with uninterrupted supply will lead their industries for decades to come. What are some of the best practice strategies being deployed?

1. Go back to the basics: It is simply surprising how many clients are running into problems with the fundamentals. Who knew a best practice was to return to basics! According to a leading authority on the subject of generational diversity in the workplace, the younger generations is struggling with ambiguity and decision making. This has proven to be “on the mark” as clients have employees stuck and struggling as they don’t know why the computer is spitting out answers that are wrong and what to do about it. Thus, we are jumping in to define processes, educate on concepts and help clients over this unexpected bottleneck. Perform a supply chain assessment to quickly size up where to focus. Take our complimentary supply chain assessment quiz.
2. Planning best practices: There is no doubt that production planning, materials management, replenishment planning, and each planning expertise is in limited supply yet is cornerstone to mitigating shortages and getting in front of demand. Refer to recent examples of how this topic can make or break success in our recent article.
3. SIOP (Sales Inventory Operations Planning): One of the single best strategies to get in front of changing conditions and ensure profitable growth is to rollout a SIOP process. A SIOP process will align Sales with Operations, demand with supply, and, most importantly, it will provide a proactive view into changing circumstances with recommended solution options, impacts on product and customer profitability, heads up to capacity bottlenecks, and sales funnel changes. Read our book, SIOP: Creating Predictable Revenue and EBITDA Growth.
4. ERP, advanced technologies & automation: No client will succeed with manual spreadsheets long-term. The most successful clients are better utilizing their ERP systems to provide enhanced visibility, flexibility, and service while also pursuing advanced technologies (digital twins, artificial intelligence, IoT, robotics, meta) and automation to improve efficiencies, reduce errors, and increase scalability and profitability.
5. Innovation: Continuous improvement is no longer enough. Only those companies that innovate and turn 1+1 into 22 with collaborative partnerships will succeed.
6. Trends & Metrics: Although it is essential to review progress and results by tracking key performance indicators like OTIF (on-time-in-full), production output, and inventory turns, it is even more important to be focused on “where the puck is going” (not where it has been). Tracking trends, listening to diverse perspectives, researching and trialing new and potential trends is the focus of our most successful clients.
7. Regional manufacturing: Although this topic should arise through your SIOP process, our money is on regional manufacturing. Clients must take control over their ability to service customers. Reshoring, nearshoring, expanding manufacturing and collaborative partnerships are hot topics. For example, even industries such as medical device, pharmaceutical, and computer chips are joining aerospace, food & beverage, industrial equipment, and building products to produce close to customers.
8. Talent: We’d be remiss not to mention that talent will “win” in the end. Attract, hoard, develop, train, and mentor talent!

Shortages are persisting. Geopolitical tensions remain high. Critical supplies such as computer chips, medical supplies, and aerospace and defense products are providing evidence that it isn’t just a lack of “nice-to-have” items. Pursue strategies to ensure you are ahead of the curve, and your business will thrive.

If you are interested in reading more on this topic:
Why Manufacturing Matters and Will Thrive in the Next Decade

The post Supply Chain Shortages Remain a Concern: Strategies for Success appeared first on LMA-Consulting Group, a supply chain consulting firm.

Enterprise resource planning systems, CRMs and other tech such as RFID, barcoding, customer and supplier portals, blockchain, IoT, and GPS tracking all support this goal.

Modern ERP systems are no longer just about transactional processes and standard business processes. They are now pivotal in meeting customer requirements, supporting automation, and integrating other essential technologies like AI, IoT, CRM and e-commerce.

Companies must stand out from the crowd with a superior customer experience to sustain profitable growth during these turbulent times; however, service alone will no longer suffice. Companies must contain cost and mitigate risk. ERP and related technologies are key to achieving these objectives.

During these turbulent times of supply chain disruptions, geopolitical risk, and stubborn inflation, companies must take bold action to mitigate risk, stabilize the supply chain, provide a customer service edge, and contain costs. As wars rage across the world, geopolitical risk has skyrocketed. If there is a disruption at one node in the end-to-end supply chain, the disruption can ripple throughout the entire chain. Executives realize that the risk is simply too high to count on the supply chain remaining stable without securing and gaining visibility to their full supply chain.

Similarly, as the world struggles with limited resources, high inflation and interest rates, there is an intense focus on cash flow and cost containment. Only those companies that automate, digitize, and utilize advanced technologies across their supply chains will be able to support customer requirements while maintaining and increasing profitability, productivity, and working capital. This will become even more critical as those companies that do not invest in their future will not be able to meet customers’ needs, leaving a vast opportunity for those ready to scale and meet customer requests.

Not enough to use your old ERP in new ways

Better utilizing an old ERP system will no longer suffice. To stand out from the crowd, you must go beyond these fundamentals and offer a differentiated or personalized customer experience.

For example, your ERP system must allow for progressive e-commerce capabilities that support not only B2C consumer expectations but also provides advantages for B2B customer ordering and status visibility with ease and effectiveness. Your ERP system should support customer personalization as well as product and service customization.

Similarly, a customer relationship management (CRM) system should be robust in tracking your pipeline, building relationships, and providing relevant insights and statistics of where to focus. Our most successful clients focus on analyzing CRM data, forecasting future customer needs, and utilizing these insights to build customer relationships.

The best clients combine CRM with a powerful business intelligence system to create predictive analytics and assess what if scenarios. The best companies connect directly with their customers’ data and provide proactive insights and differentiated value to their customers.

In addition to gaining sales, companies should utilize ERPs to take customer service to the next level with collaborative customer ordering programs and vendor managed inventory programs. By utilizing demand planning and sales forecasting including the use of AI and predictive analytics as well as replenishment planning and advanced planning functionality, clients can solidify their preferred partner status.

For example, a health care products manufacturer grew the business by outperforming their key customer’s resources in determining what to stock where. Not only did they increase their customer’s fill rate and shorten lead times, but they also reduced their customer’s inventory levels. The customer responded by expanding business and suggesting additional opportunities. In addition, the manufacturer reduced inventory levels and improved their production, warehousing, and transportation efficiencies. Profitability and cash flow increased.

Manufacturer technology that supports supply chain visibility

End-to-end supply chain visibility is essential to responding quickly to changing conditions and in providing Amazon-like status updates to your customers. Several technologies support this type of visibility, including RFID, barcoding, customer and supplier portals, blockchain, IoT, GPS tracking, and more. Smart companies are collaborating with supply chain partners to gain access to status information and to connect, plan, and optimize efficiencies across their supply chain.

For example, if you know the status of key materials, you can better plan production to minimize costs while meeting customer expectations. If you know the status of incoming goods, you can optimize truckloads and modes of transportation to mitigate costs while improving delivery performance.

The metaverse can bring together what customers ask for with what customers need. In essence it can accelerate your SIOP (Sales Inventory Operations Planning) process. In a metaverse collaborative room, any set of customers, consumers, and suppliers can meet virtually to review sales forecasts, projected production plans, and possible supplier/capacity limitations that could affect manufacturing volume. They also can visualize an immersive supply chain network map, see where inventory is, identify issues, and model possible solutions. These types of proactive solutions will upgrade your ability to secure your supply chain, enhance margins, and provide end-to-end visibility.

The ever-increasing importance of automation

In addition to automating repetitive tasks, ERP systems and related technologies can keep facilities running at night without people. Since most clients have consciously prioritized which customers to serve due to limited resources, taking advantage of lights out capabilities is quite appealing.

For example, an aerospace manufacturer had a bottleneck in a critical area of the shop that required high-skilled resources to function which created significant past due and unhappy customers. This client purchased a robot and invested in high-skilled talent to modify the robot to work for their needs and connect it to their systems. They were able to program the robot during the day and run lights out on second and third shift, quickly resurrecting their customer service and supporting future growth.

As companies expand and upgrade the use of ERP and related technologies, they can create unique value for customers and in their supply chain. Taking it a step further, to thrive during these turbulent and inflationary times, it is important to automate, digitize, reduce repetitive labor requirements, increase efficiencies, and standardize so that more can be achieved with fewer resources. The best companies engage their people and connect with customers and suppliers to upgrade the end-to-end customer experience.

Originally published on Smartindustry.com on November 17, 2023.

The post Leveraging ERP and related technologies for a diverse customer experience appeared first on LMA-Consulting Group, a supply chain consulting firm.

Lisa Anderson was quoted in a SelectHub article when she warned that, in the area of attracting and retaining workforce talent, competitors will always try to steal your best employees.

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Manufacturing Trends 2024: Maintaining A Competitive Edge

What are the most essential manufacturing trends of 2024? I hate to burst your bubble, but this industry doesn’t just focus on AI, IoT, data mining or advanced manufacturing software.

We’re talking about the big-picture patterns that are shaping the future of manufacturing as we speak. This guide will tell you how to retain labor, keep a carbon-neutral work environment, maintain a positive reputation and more.

Key Takeaways

• Some ideal technologies for manufacturing include IoT, IIoT, AI and data mining.
• When adopting smart factories, there should be a harmonious balance between machines and humans.
• Top manufacturing process types include repetitive, discrete, process, continuous, job shop, 3D printing and more.
• Ideal ways to attract and retain manufacturing employees are giving them satisfactory work environments, liveable pay and benefits, training opportunities. and more.
• Because of the digital twin market’s resourcefulness across the manufacturing and PLM sectors, this market could hit $155.84 billion in value by 2030.

Top Trends for 2024

1. Attracting and Retaining Workforce Talent

Lisa Anderson, founder and president of LMA Consulting Group Inc., warned that competitors always try to steal the best employees.

Pay alone will not suffice. In our experience, the most important priority to retaining top talent is company culture and leadership. People do not follow companies. They follow leaders. Clients with leaders who appreciate talent, offer training and advancement opportunities, and are willing to address poor performers and tough topics are respected and successful. On the other hand, clients with volatile leaders are losing talent at a quick pace.”

To read the full article, click here.

The post Manufacturing Trends: Maintaining A Competitive Edge – SelectHub appeared first on LMA-Consulting Group, a supply chain consulting firm.

As the labor market tightens with changing demographics, companies will need to leverage technology and digitize their supply chains.

The world has never experienced a labor shortage quite like the one we are experiencing. According to the Bureau of Labor Statistics, employment growth will average .3 over the next decade; however, labor participation will drop from 62.2% to 60.4%. In essence, we have entered a secular labor shortage. Similarly, according to the German Chamber of Commerce and Industry, half of German companies are struggling to fill vacancies due to labor shortages. Thus, the only companies that will thrive in the next decade will leverage technology and digitize the supply chain.

The use of technology and automation will be of paramount importance to not just supplement the labor force, but also to meet ever increasing customer requirements and provide visibility across the end-to-end supply chain. Companies must be faster, focused, and perform with lights-out manufacturing and logistics to succeed. Thus, a modern ERP system will be an assumption, not a differentiator. In addition, companies must pursue advanced technologies such as business intelligence and predictive analytics to forecast the future and determine where to focus, artificial intelligence, and IoT solutions to support items such as predictive maintenance, and digital twins to optimize process and product performance.

Pertinent Examples

An electrical power solutions manufacturer struggled with an ERP system upgrade, and it impacted every aspect of the business, requiring additional resources to support customer requirements. A base ERP system is no longer acceptable. Instead, a modern ERP system that supports customer expectations such as configure-to-order (CTO), customer relationship management (CRM), and customer-related functionality — including customer portals, order fulfillment visibility and backlog management — is essential.

Since the ERP team didn’t have the time required to fully prepare, the executives quickly supplemented with additional consulting and temporary resources, developed interim solutions for tracking backlog, and ordered ahead to support the transition. Even with one of the best management teams in the industry, until modern ERP functionality was available, they had to implement several stop-gap measures to avoid significant customer impact.

An industrial manufacturer struggled to forecast revenue accurately one month ahead, causing frustration with their board of directors. An assessment of their business processes and use of technology showed that their sales and order entry systems did not talk with their production and inventory control systems. Although Sales could estimate revenue, Operations had no idea which products would be required to support that revenue until Engineering completed design. Thus, although performing above expectations, the two rarely met.

To turn this situation around, we had to build a bridge between the two systems with a data model. However, that alone wouldn’t resolve the issue, as the product details were not known soon enough to ensure seamless delivery and revenue predictability. Thus, in addition, the team created a digital-twin-type capability to predict the product grouping and model information with a SIOP (sales inventory operations planning) process so that materials could be purchased and capacity planned. Once this information was built into automated dashboards, Production was able to transition from reactive to proactive, thereby creating predictability in shipping plans and taking it a step further with proactive margin enhancement strategies.

An aerospace manufacturer continually struggled with on-time delivery, and customers were losing patience. The issue was a bottlenecked area of the manufacturing process that simply could not keep up. They could not find enough high-skilled resources to run the machinery on second and third shifts, and overtime was maxed out. The team pursued an alternate strategy to employ a technological solution to run lights out around the clock.

They purchased a robot and focused their most advanced resources on modifying the robot to work in their manufacturing environment. With the upgraded robot, their high-skilled resources refocused attention on setting up the machinery during day shift, which allowed the robot to perform the repetitive tasks on second and third shift. Order delivery performance improved rapidly, and customer complaints disappeared as the bottleneck was removed. Later, they focused on upgrading their distribution processes with lights-out capabilities as well to further differentiate performance.

Forward-thinking companies will pursue smart technology upgrades while their competition focuses on containing cost. The companies that figure out how to do more with less and digitize their supply chain will thrive while the rest struggle. Resources will no longer be plentiful, and so pivoting with technology will be the only route to executing successfully while meeting ever increasing customer expectations.

Originally published in Adhesives & Sealants Industry.

The post Automate, Digitize, and Thrive in the Supply Chain appeared first on LMA-Consulting Group, a supply chain consulting firm.

Medtech companies’ focus on supply chain resiliency and mitigating supply chain risk has increased over the last few years as the pandemic triggered extended lead times, delays, and rising costs. Executives must now be able to pivot quickly to changing conditions, and they want to be in control of their ability to successfully serve customers. In reviewing options to meet these objectives, the critical importance of enterprise resource planning (ERP) and related manufacturing and supply chain technologies has risen to the top.

Taking Control of the Customer Experience

One way to take control of manufacturing and the supply chain as well as build resiliency into the customer experience is by focusing on expanding manufacturing and reshoring manufacturing closer to customers. Reshoring Initiative data show the combination of reshoring and foreign direct investment (FDI)-related job announcements last year reached record high levels—a trend that is expected to continue. As companies reshore, there is a significant emphasis on automation, robotics, 3D printing/additive manufacturing, and other supply chain technologies to reduce costs, minimize hard-to-find talent, increase quality, and keep abreast of customer requirements.

Nearshoring also remains popular for companies that want to improve customer performance by moving manufacturing closer to customers. Mexican exports, for example, rose 5.8% to $52.9 billion in May 2023, the second highest reading on record, according to Bloomberg. Mexico is also automating, digitizing, and employing advanced manufacturing methods. Case in point: Global automotive technology firm Luminar announced in April the build-out and ramp up of a new highly automated, high-volume manufacturing facility in Monterrey, Mexico. Moreover, Nuevo León Gov. Samuel García, said at the World Economic Forum in January that an “advanced manufacturing platform” would soon be launched in the state to focus on process digitization and automation.

Besides supporting reshoring and nearshoring initiatives, medtech firms also are interested in deploying advanced manufacturing techniques to augment their competitiveness. With skyrocketing inflation, manufacturers are paying more for materials, components, labor, and freight. In addition, the cost of capital has increased significantly, further decreasing margins, and limiting cash flow. Thus, manufacturers are searching for opportunities to increase efficiencies, automate repetitive processes, utilize robots, and embrace digitization as much as possible to decrease costs, increase margins, and better control customer pricing.

To grow their business, manufacturers are focusing on providing customers with a superior experience. In the current Amazon-impacted business environment, customers expect rapid deliveries, 24/7 service, and quick responsiveness—elements that once were considered forward-thinking and innovative but have now become essential. To stand out from the crowd, companies must go beyond these fundamentals and offer a differentiated or personalized customer experience. Thus, using a modern ERP system is essential to success because it will support these basic needs and augment them with such related technologies as customer relationship management, order fulfillment visibility, warehouse management system, transportation management system (TMS), e-commerce, advanced forecasting and planning, artificial intelligence, and predictive analytics.

A healthcare products manufacturer that distributed products throughout the United States wanted to improve their service levels, lead times, and inventory levels across its various facilities for customers. The manufacturer accomplished this goal by rolling out a vendor managed inventory system with suppliers and set aggressive scorecard metrics. The manufacturer used an ERP system to connect to its key customer’s demand and inventory data, and developed a forecasting and replenishment planning system. Hence, the manufacturer was able to establish an efficient system to maximize service levels for its customer while minimizing inventory levels and costs by utilizing business intelligence reporting to identify forecast exceptions and advanced planning functionality to proactively manage service levels. The software provided visibility into key customers’ distribution centers so the manufacturer could decide how to reallocate inventory to improve service while reducing inventory. Additionally, by integrating the replenishment orders to its customers’ locations with ERP and TMS systems, the manufacturer maximized multiple-stop truckloads and route in an optimal sequence to minimize freight costs.

Manufacturing and Supply Chain Technologies

There are numerous manufacturing and supply chain technologies that yield a substantial return on investment. 3D printing is providing a distinct advantage to manufacturers interested in providing quick prototypes to customers, and it is being used in several medical and industrial applications. According to G2 and Oxford Performance Materials, more than 75% of American patients with damaged skulls from disease or trauma received implants made by Oxford Performance Materials’ 3D printer. GlobalData predicts that customization, lower production costs, and quick turnarounds will drive the medical 3D printing market’s growth. Such benefits, along with the sector’s 23% compound annual growth rate (IndustryArc data), is prompting smart manufacturers to increasingly pursue clinical trials for 3D-printed products.

Augmented reality (AR), virtual reality (VR), and digital twins (a digital representation of an intended or real-world physical product, system or process) are some of the promising technologies in manufacturing and supply chain circles. They are particularly valuable in the current business environment as companies grapple with limited high-skilled resources, cost management concerns, and delivering a superior customer experience. AR/VR is used to train employees on ways to use and maintain equipment, about trials and simulations responsibilities, in collaborative product design, and in remote monitoring and factory audits. Digital twins can be used to evaluate “what if” scenarios to optimize the plant floor or data sets. An engineer-to-order manufacturer, for example, can utilize a digital twin to evaluate capacity with various configuration forecast models to stay ahead of customer requirements and result in a more efficient and responsive supply chain.  

The Metaverse can bring together customers’ wants and needs. In essence, it can accelerate the SIOP (Sales Inventory Operations Planning) process. In a metaverse collaborative room, retailers and their suppliers (or any set of customers, consumers, and suppliers) can meet virtually to review sales forecasts, projected production plans, and possible supplier limitations that could affect manufacturing volume. They can also visualize an immersive supply chain network map, see where inventory is, identify issues, and model possible alternatives.

The internet of things (IoT) and artificial intelligence (AI) are transforming the supply chain as well. As ERP systems, machines, and vehicles capture data with IoT, AI will learn how to predict breakdowns and recommend predictive maintenance plans, making preventative plans obsolete. Forklifts and autonomous vehicles will capture many signals and provide alerts to prevent impending safety incidents, and advanced planning systems will utilize machine and operational performance data to predict run rates and provide insights on how to minimize usage.  

Robots are bringing a new level of efficiency and repetitiveness to manufacturing. Industrial manufacturers are using welding robots to produce parts around the clock to minimize labor costs, quality issues, and injuries. Similarly, an aerospace manufacturer developed a robot that could produce on second and third shift with lights-out manufacturing a complex process to address a critical shop bottleneck. The aerospace firm quickly alleviated past due orders and got in front of its customer’s needs.

Manufacturers are also pursuing visibility across the supply chain so that customers can check status around-the-clock and supply chain partners can gain visibility and respond to changing conditions. Thus, digitizing information in the supply chain is a priority. This can range from simple concepts of barcoding/ RFID, lot tracing, and electronic data interchange to complex and collaborative topics such as customer portals, supply chain control towers, and port optimizers. Taken a step further, companies are investing heavily in blockchain to gain an immutable ledger of product and financial transactions across the supply chain.

The Bottom Line

Smart executives will leverage ERP systems as well as manufacturing and supply chain technologies to create a customer service edge. Equally important, they will automate, digitize, and turn data into insights to help their organizations become forward-thinking, resilient, efficient, cost effective, and predictable. Since only these uniquely positioned, innovative manufacturers that can scale up or down rapidly will be prepared for the change and volatility in the global supply chain, they will have the unique opportunity to leapfrog the competition, capture market share profitably, and be in the position to thrive for decades to come.

Lisa Anderson is founder and president of LMA Consulting Group Inc., a consulting firm specializing in manufacturing strategy and end-to-end supply chain transformation that maximizes the customer experience and enables profitable, scalable, dramatic business growth. She is president of the Inland Empire Chapter of APICS, the leading trade organization of supply chain management. Anderson recently released Future-Proofing Manufacturing and the Supply Chain Post COVID-19 as an e-book. 

Originally published in MPO November/December issue.

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Manufacturing appears to be turning the corner. According to the ISM, the Purchasing Managers Index (PMI) recorded a contraction but at the slowest pace of the recent cycle. In fact, this is the third straight month of improvement. The expansion of the PMI is indicating a recovery on the horizon for manufacturing.

S&P Global also surveys the economy, and their statistic shows that manufacturing is near stabilization. Their Purchasing Managers’ Index came in at 49.8 with production increasing at a marginal pace. Thus, the most respected surveys align and are trending positive for manufacturing.

Manufacturing Expansion Beyond the Statistics

Beyond the economy’s signals, manufacturing has the potential to surge. Whether reading surveys, talking with clients or collaborating with colleagues, it is clear that smart executives are expanding manufacturing footprints, reshoring from Asia, and finding regional partners to increase manufacturing. According to a poll conducted by Forbes, Xometry, and John Zogby Strategies, 82% of CEOs have already implemented — or are actively pursuing — reshoring strategies.

These expansion and reshoring activities will accelerate the manufacturing resurgence. The bottom line is that manufacturers are realizing that the risks associated with China, manufacturing long distances from key customers, and other geopolitical conflicts and wars such as the Russia-Ukraine war are simply too high. Forward-thinking executives are taking control of their ability to serve customers. To read more on this topic, read our article “Take Control of Manufacturing to Wrestle Volatility to the Ground.”

Where Should Manufacturers Focus?

There will be more opportunities than ever before as prepared, innovative, and resilient manufacturers will have the opportunity to take market share as they can service customers with ever increasing expectations in a scalable, profitable manner. Unfortunately, the rest that rest on their laurels, reacting as events unfold will not be able to keep up with key customer needs and gain traction quick enough to succeed in today’s volatile environment where customers expect customized products, personalized service, with rapid execution and innovative solutions.

Thus, during manufacturing month, we should be thinking five steps ahead of the competition. Don’t just bring manufacturing back; instead, think about expanding manufacturing in a new way. Automate where it makes sense (starting with repetitive tasks), digitize so that there is supply chain visibility and resiliency, utilize 3D printing and additive manufacturing to slash product development lead times and produce custom products on demand, analyze what if scenarios with digital twins, leap forward with AI and predictive analytics, and ensure your foundational processes, ERP system and related technologies are on solid footing.

Become passionate about talent and leadership. Our most successful clients retain top talent. There are no exceptions. Without your #1 asset, there will be no business. With the rate of retirement and the future of the workforce, there is a large gap to sustain business, let alone thrive in the next decade. Fundamental topics are arising at clients at a quick pace. Inventory accuracy, order fulfillment, and other bedrock topics can be much more challenging than they appear.

Only those who invest in proactive processes such as SIOP (Sales Inventory Operations Planning), dedicate the time to training, education, and development, and prioritize proactive organizational development and supply chain partner relationship building efforts will succeed. Yet this is still not enough. Innovation and resilience will be required to succeed during these turbulent times.

The Bottom Line

A manufacturing resurgence is underway. The only question is whether you will jump in and take control of your destiny or observe from the sidelines.

If you are interested in reading more on this topic:
Taking Control: Reshoring, Nearshoring, Friendly Shoring & Manufacturing Expansion

The post A Manufacturing Resurgence Is On Its Way appeared first on LMA-Consulting Group, a supply chain consulting firm.

CLAREMONT, CALIFORNIA – September 29, 2023 –  Manufacturing and Supply Chain Consultant Lisa Anderson, MBA, CSCP, CLTD, known as the Strongest Link in Your Supply Chain® and President of LMA Consulting Group Inc.,  underscores the pivotal role of Enterprise Resource Planning (ERP) systems in modern business strategy. LMA Consulting Group specializes in supporting manufacturers and distributors in strategic planning and comprehensive supply chain transformations, focusing on enhancing the customer experience and facilitating robust business growth.

In a rapidly evolving digital age, the emphasis on ERP systems has never been more pronounced. More than just supportive tools, these systems are integral for sustaining profitability and addressing evolving customer needs. “Modern ERP systems are no longer just about transactional processes. They are now pivotal in meeting customer requirements, supporting automation and integrating other essential technologies like AI, IoT, CRM and e-commerce. The real question today is not just about possessing an ERP system but ensuring it aligns seamlessly with business aspirations and customer expectations,” stated Ms. Anderson.

Given the hefty investment ERP systems often represent, their implementation requires meticulous planning and strategic alignment. “A roadmap is essential for achieving desired outcomes. I’ve seen instances where the urgency led to ERP implementation without data migration causing elongated post-implementation recovery phases, resulting in lost customers and revenue,” she added.

A strategic evaluation, coupled with a thorough ERP assessment, can guide businesses in identifying core business requirements, discerning profit-driving factors and ensuring that their ERP system aligns with their overarching goals. With the complexities of ERP solutions, where each provider is touting unique features, seeking external expertise provides an unbiased perspective, allowing businesses to navigate the complexities with clarity and confidence. 

For deeper insights into navigating the complex landscape of ERP and global supply chains, download Ms. Anderson’s special report The Road Ahead: Business, Supply Chain & The World Order. Additionally, her resource SIOP (Sales Inventory Operations Planning): Creating Predictable Revenue and EBITDA Growth offers invaluable strategies for organizations. Download it at LMA website,  Amazon and Apple.

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. She has been interviewed by Fox News and published the ebook, Future-Proofing Manufacturing & the Supply Chain Post COVID-19, 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, 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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