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

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Outstanding Consultants Honored at 20th Annual Meeting this week

SAN DIEGO, CA — The Society for the Advancement of Consulting® (SAC), the leading global association of independent consulting professionals, today announced the winners of the Corrie Shanahan Memorial Award for Advancing Consulting. The awards were presented at the 20^th annual meeting of the organization, held in San Diego this year with a virtual option to allow global participation. other solutions will be required. Four-day workweeks are more attractive, so that employees can achieve work-life balance. Leaders will have to step up to figure out how to position their companies for the future instead of dictating the past.”

The Consultant of the Year was awarded to Christian Milaster of Annapolis, Maryland. There are two recipients of this year’s award for Creativity & Innovation, Mark Cioni of New Hartford, NY and Heather Lenz of Cleveland, Ohio.

“Consultants continue to play a critical role in helping clients navigate the everchanging economic environment,” said Linda Popky, co-executive director of SAC. “We’re excited to be able to again honor the best-of-the-best with these awards.

“This year, in addition to honoring the outstanding consultant of the year, we are also recognizing two SAC members who each displayed outstanding creativity and innovation—both in their own practice, as well as in how they work with their clients,” she added.

About Christian Milaster

Christian Milaster is passionate about enabling the sustainable delivery of extraordinary care. He is driven to increase the personal satisfaction medical professionals by applying systems thinking principles and implementing systems solutions..

Rooted in German engineering and systems thinking, Christian and his team optimize care delivery by designing and implementing pragmatic improvement and optimization solutions, drawing from a wide range of disciplines, including agile, lean, Baldrige, design thinking, requirements engineering, servant project management, change management, and many more.

He is the founder and CEO of Ingenium Digital Health Advisors, a boutique consulting firm focused on accelerating the adoption of digital health innovation, and of Ingenium Healthcare Advisors, focused on guiding healthcare leaders to get the results they want. Ingenium Advisors now comprises a 16-person team and a consortium of over a dozen expert advisors.

Born, raised, and educated as an Engineer in Germany, Christian started his career at IBM Global Services in Germany before joining the Mayo Clinic in Minnesota, where he worked in various roles for 12 years before launching Ingenium in 2012. His team is spread across seven countries as well as throughout the United States.

About Mark Cioni

Mark Cioni has consulted globally for over 35 years to a wide variety of clients in private industry and government. His deep expertise in domains, including information technology, cyber security, enterprise architecture & organizational change management, helps to maximize client value derived from decisions, operations & performance.

Mark has worked recently to improve the security, resiliency, and reliability of critical infrastructure and helped clients to exploit customer experience & improvement opportunities at the convergence of artificial intelligence, analytics & machine learning & enterprise automation.

About Heather Lenz

Heather Lenz is pioneering the field of social impact consulting with innovative, data-driven strategies that provide real-time insights about social change for clients. Her approach combines the fields of organizational development, design thinking, and data and evaluation with the field of social work. This has led to measurable reductions in some of the most pressing issues of our time, like structural racism, workplace psychological safety, and more—redefining the way organizations approach their missions and drive change for the betterment of people and communities.

With a vision to revolutionize the trillion-dollar social impact industry in the U.S., Heather emphasizes accountability and effectiveness by helping organizations build outcomes-oriented intelligence systems. She is at the forefront of integrating AI and open-source tools into consulting practices, working toward a future where technology seamlessly enhances the nonprofit and government consulting fields, ultimately creating a more impactful and dynamic approach to social change. Her firm, Sangfroid Strategy, has invented new ways to conduct market research on the nonprofit sector, spearheaded innovative solutions for the field of philanthropy to put the commitment to racial and gender equity into practice, and created organizational operating systems to improve the effectiveness of the nonprofit sector.

The Advancing Consulting Awards

The awards are given to independent consultants who have done the most to advance the profession in the previous year. They’re named in memory of Corrie Shanahan, a SAC member who passed away in 2019. Corrie Shanahan was an expert in rapidly strengthening organizational performance, productivity, and corporate culture, and the author of Do it, Mean it, Be it: The Keys to Achieve Success, Happiness and Everything You Deserve at Work and in Life.

“We are excited to recognize consultants that symbolize the “best of the best” in the consulting profession,” said Lisa Anderson co-executive director of SAC. “Just as Corrie exemplified a zest for continuous improvement and achieving outstanding client outcomes, our nominees stood out above the crowd.

“This year’s pool of nominees again was highly qualified,” she added. “In a year of volatility and business change, we were pleased to see so many consultants innovate and thrive. We greatly appreciate the award committee, led by chair Vanessa Khan, for all their hard work to review submissions and evaluate applicants based on a set of pre-defined criteria.”

“Our commitment to create superb value for our clients is a core value for SAC’s consultants. In a world where technological advances, societal evolution, and political shifts result in uncertainty and rapid change, we cannot stand still—we must advance, we must evolve, we must innovate,” stated Christian Milaster.

“To be recognized this year by my peers for having contributed to the advancement of the consulting profession is a true honor—and equally a strong encouragement to continue to do so,” he added. “I’m grateful for the continuous inspiration and support by my fellow SAC members and past award winners that motivated me to reach new heights. I’m thankful for the volunteers who created and coordinated this recognition in honor of an outstanding consultant, Corrie, and I’m humbled by the testimonials of my clients and references that confirm my approach to consulting demonstrates my deep commitment to creating superb value for clients.”

Mark Cioni noted, “I’ve been able to engage more actively with SAC since 2019 and want to thank the entire membership for welcoming me into their community. I’m grateful to receive their guidance and for the opportunity to contribute. This journey was entirely unexpected and I’m humbled to know that the community recognizes my Creativity & Innovation.

“Although I never got to meet or know Corrie Shanahan, I am well aware of her legacy. I can only hope to face my own adversity with a fraction of the courage, tenacity, and joy that Corrie embodied and, if I do, I will count myself a success!” he added.

Heather Lenz adds, “Innovative thinking is at the cornerstone of reimagining the social impact sector. As consultants in this sector, we must help our clients leverage new technology and ways of thinking to transcend conventional boundaries. As a society, we have waited long enough for the ecosystem of organizations set up to improve the lives of people to work well.

“At this moment in time, we have the resources and the technology to transform our social services landscape into one that creates lasting, meaningful, and measurable impact on the lives they serve—and it is our duty to do just that,” she noted.

About SAC

The Society for the Advancement of Consulting (SAC) is the premier association for independent consulting professionals who subscribe to an industry code of ethics and provide significant consulting results among their clients. Founded by Million Dollar Consulting guru Alan Weiss in 2003, SAC offers a series of in-person and online programs to help consultants share best practices and learn from industry experts and thought leaders in the business world. SAC today has members in 14 countries around the world.

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Global supply chains are on the move. Executives have been hit with the harsh reality that the risk (supply chain, geopolitical, cyber, IP, etc.) is far higher than they realized when they outsourced with an eye to cost. In addition to that 80 pound gorilla, they also have suffered with delays, disruptions, and uncertainty in serving customers due to lengthy distances and logistical risk. Thus, supply chains are on the move. Strategies need to be rethought, the end-to-end supply chain assessed, and future customer needs evaluated to get in front of this changing landscape. SIOP (Sales Inventory Operations Planning) is a key process and toolset for successfully navigating this transition with profitable growth fueling the process.

Risks Abound in the Global Supply Chain

Risks abound in the global supply chain. From Russia-Ukraine to China’s extreme risk including threats to Taiwan to the increasing cyber risk, executives are struggling to navigate the global supply chain. A few critical points that “tell the story” of risk include:

• Russia-Ukraine war: The war has disrupted the critical commodities of oil and natural gas. Europe put sanctions on Russia which left them in a bad situation in getting enough energy to power their current lifestyle as well as critical manufacturing, logistics and infrastructure needs. Thus, Europe has been scrambling to address backup sources of supply. In the interim, Russia sold oil and natural gas to China and India. The end result is price escalation in addition to “supply on the move”. Oil and natural gas is used in countless products from medical devices to glasses to phones, thus impacting the global supply chain.
• The China risk factor: China is simply a mountain of risk. China is the number one manufacturer in the world and accounts for almost 30% of the world’s output. Thus, from internal issues (severe water and energy shortages with “solutions” of permitting two coal plants a week) to threatening Taiwan (putting 90% of the world’s advanced computer chips and 60% of the world’s standard computer chips at risk) to monopolizing rare earths (produces 60% and processes 85% of the world’s rare earths) to buying up critical infrastructure around the world (such as controlling both ends of the Panama Canal) and controlling the South China Seas, China wants to control the world’s supply chains.
• Talent & Technology: Resources are limited around the world. For example, according to EY and an iMocha report, 81% of organizations are experiencing a shortage in skilled tech workers. Similarly, the risk of cyber attacks and supply chain security issues increase with each passing day. For example, according to Deloitte’s report 2023 Global Future of Cyber Survey 2023, 91% of organizations report experiencing one or more cyber incidents or breaches.

And now Israel is at war. Volatility, uncertainty, complexity and ambiguity (VUCA) is at an all-time high in recent history. The bottom line is that risks have reached a level that is unacceptable to many executives.

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 these extreme risks). SIOP starts with a view into your future customer demand (sales forecast, customer orders, quotes, CRM) and translates that into manufacturing and supply chain requirements. The process will highlight capacity constraints (production, storage, resource), upcoming bottlenecks, forecasts for investment (equipment, inventory, resources), make vs buy decisions, and customer/ product profitability opportunities.

For example, when consulting with an industrial manufacturer that was concerned about risks in the end-to-end supply chain, and so used the SIOP process to visualize what should be done. Based on their demand plan, they were able to see impacts to their supply plans and where risks were in their current manufacturing and supply chain. Thus, they assessed and took action to transition to backup sources of supply, expand their supply base into India, pre-purchase critical commodities to give them time to assess their future needs, and they expanded regional manufacturing by sourcing offload suppliers. By taking these actions, they were able to secure supply to meet their aggressive growth plans.

Assessing Strategies

In our book, “SIOP (Sales Inventory Operations Planning): Creating Predictable Revenue and EBITDA Growth“, we discuss how SIOP will fuel transformative strategies for growth while mitigating risk.

• Supply chain footprint: SIOP looks forward to future customer requirements and determines how to reallocate manufacturing and change the supply chain footprint (reshoring, nearshoring, regional manufacturing, additive manufacturing) to support key customers and grow the business while mitigating risk in how product is manufactured, distributed, transported and delivered in the order fulfillment process. Vast changes are occurring. For example, Apple is moving from China to India, Dell is moving from China to Vietnam, HP is moving from China to Mexico, and Intel is building a ‘mega’ factory in Germany and expanding capacity in the U.S. with its first new manufacturing facility in 40 years.
• Supply chains on the move: As the supply chain footprint evolves, the global logistics landscape must change to support it. Thus, as I said at the IMUI international conference, shipping routes will change and evolve with changing business conditions and risks. For example, in addition to keeping up with manufacturing changes, as China becomes risk laden and the South China Seas becomes uncertain at best, companies will continue to move manufacturing and/or change shipping routes. As delays consume shipping routes such as the Panama Canal, companies will find alternatives, and as strike risks impact supply chains such as the West Coast ports, shipping routes move (and the East Coast gains in this example).
• Examining links: SIOP opens the door to examine every link in the chain. From enabling margin analysis by product groupings, customers, markets and regions to examining the customer experience, the SIOP provides for holistic as well as departmental strategies.
• Margin vs risk: SIOP also provides the data and process for evaluating cost reduction opportunities, pricing strategies, sales channel and marketing options, operations and supply chain alternatives, and inventory and capacity fulfillment options while assessing customer value-add business risk.
• Talent & Technology roadmap: Last but not least, SIOP translates demand and supply plans into talent and technology requirements. More importantly, the resource requirements can will be impacted by the technology roadmap, and so the best SIOP strategies proactively address talent and technology to optimize, digitize and thrive. There are simply not enough resources at any company. Only those that automate, utilize technology and innovate will survive, let along thrive.

As risks abound, the best in class will utilize the proven process of SIOP to proactively navigate changing conditions in a manner that is not only supportive of profitable growth but is also focused on critical risks and long-term success.

Innovation: A Forward Take on Risk

Beyond the uncommon common sense strategies to ensure predictable revenue and EBITDA growth, executives must develop a culture of innovation. The world has become not only complex and convoluted, but also a maze of geopolitical risk dependent on advanced technologies. These advanced technologies escalate risk further as they are dependent on commodities in risk abundant regions of the world and carry the threat of cyber attacks. Thus, the smart are innovating. Only forward-thinking innovators willing to do what most executives will not do (such as invest when everyone else panics) while remaining calm, resilient and strong will thrive for decades to come.

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

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CLAREMONT, Calif., August 1, 2023/ExpertClick/ — Proactive innovation and disruption are helping businesses to succeed in the current volatile economic environment, according to The Society for the Advancement of Consulting® (SAC). The best companies are leveraging their culture of innovation and advanced technologies to enhance customer experience. Without it, companies risk extinction.

Advanced ERP Boosts Manufacturing in Current Unstable Economy

“Manufacturers must innovate and use advanced technologies to take advantage of these volatile economic times,” points out Lisa Anderson, president of Claremont, CA-based LMA Consulting Group, Inc and manufacturing expert known as the Strongest Link in Your Supply Chain®. “Manufacturers need to do something different than simply trying to navigate increased interest rates, labor costs, raw material, and component costs, while also managing elevated customer expectations.

“Successful executives will create a culture of innovation, so that they are more than simply resilient. They leapfrog the competition and take advantage of opportunities,” she adds. “Instead of focusing solely on continuous improvement, they fast-track progress by expanding the use of ERP with advancements in AI, e-commerce, advanced planning and scheduling, SIOP, IoT, digital twins, and much more. The appropriate use of systems and technology creates a superior customer experience, maximizes profitability, and supports sustainable growth.”

Five Crucial Questions to Standout in a Shaky Economy

“Stand out from your competitors!” advises Kathleen McEntee, president of Kathleen McEntee and Associates Ltd, a full-service marketing firm focused on delivering results by distinguishing businesses with straightforward messaging addressed in the right media to the right audiences. “When the economy gets wobbly, organizations need to shine.”

“Leaders should pose five questions,” she explains. “What is our customer experience? How can it be improved? How do we distinguish our products and services from our competitors? How do we leverage technology to raise efficiency and improve our service and product delivery? And, are our employees true brand ambassadors?”

“Customers want a great experience, with products and services that stand apart from competitors,” notes McEntee. “Technology improves the customer experience, expands our products and services, and creates internal efficiencies. And, our employees should be living the brand.”

Use This Time to Gain Competitive Advantage

Uncertainty and volatility may generate disruption, but they can also create opportunities. Those companies that look for ways to improve their customers’ experiences—in good time and bad—will thrive and prosper, says Linda Popky, president of Redwood Shores, CA-based strategic firm marketing firm Leverage2Market Associates, and author of the book Marketing Above the Noise: Achieve Strategic Advantage with Marketing That Matters.

“This is a great time to look for innovative ways to help your customers. Some times, that involves technology, but others it may mean adding a more human touch that your competitors are lacking,” she said.

Disrupt or Disappear is the New Business Reality

“The current economic conditions are not unstable but simply part of the New Normal® and new realities that all businesses will face,” says SAC Founder Alan Weiss, PhD. “Go on the offensive and create disruption and volatility if you intend to dominate your market. If you try to ‘wait this out’ you will probably disappear.”

As originally published on ExpertClick on August 1, 2023

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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.

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SIOP/ S&OP Playbook: Creating Predictability & EBITDA Growth

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It is not easy to expand your thinking, open yourself up to new ideas, and think creatively while completely focused on day-to-day execution. Yet it will be the most important ingredient to success in the next several years. There are so many challenges and obstacles to overcome (geopolitics, lack of talent, subpar processes, lack of funding, meager technology, non-achievable regulations and more) that using advanced technologies and innovating your way to success will become the only viable option to ensure you can serve your key customers reliably.

Additionally, even though cost savings of 1-3% can equal large dollars, these will not cut it when input prices have been going up by 5%, 10%, 20% and ever higher, and price increases aren’t keeping up. Several clients have seen margins decline due to this equation and are jumping on this situation. Customers and consumers are not accepting the same price increases they accepted initially, and so manufacturers are getting squeezed. The use of advanced technologies (robotics, automation, digital twins, AI) will be required to keep up with key customers’ demand, to reduce costs, and to bridge the skills gap.

Freeing your thinking is vital to innovating your way to success.

Ideas for Freeing the Mind

So how do you free your mind to innovate? You might be able to go to your backyard and watch the dog, go to a restaurant and enjoy time away, or take a hike, but there are also times it makes sense to get away from home to clear the mind. Since I had to go to San Diego to speak with a group of CPA partners about challenges, opportunities and the path forward in manufacturing and supply chain, I had the chance to look out the window and work on the patio (thanks to a complimentary upgrade). See included photo. I also went to the pool restaurant to enjoy guacamole. And, I had the opportunity to catch up with a friend while in town which got me thinking about new topics and ideas. Stay tuned as I’ll be rolling these out. Freeing the mind can help to expand your thinking and stimulate creative juices.

Expanding Your Thinking

Once your mind is freed up, it is far easier to focus on innovating and trialing new technologies. AI and ChatGPT will transform the way we do business over time. Digital twins are revolutionizing our ability to simulate real world situations. Robotics are changing the manufacturing floor. Are you trying new technologies like these out? Additionally, are you reading about new topics? Deliberating putting yourself in new situations? Asking questions? Expanding your thinking will be critical to innovation. Learn more about innovating for success in our recent article in Adhesives & Sealants Industry.

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

The post Strategies to Expand Thinking to Innovate & Advance Technology appeared first on LMA-Consulting Group, a supply chain consulting firm.

Originally posted in ASI – Adhesives & Sealants Industry – June, 2023

Innovation allows companies to achieve higher levels of growth, profitability, employee engagement, and success.

According to the Global Innovation Index (GII), Switzerland ranks first in the world with the US edging out Sweden for the second position. China continues to ascend and is in the eleventh position, and the only middle-income economy within the top 30. India also rated number one in the lower-middle income category. It is apparent that innovation, growth, and success seem to go hand in hand. This insight rings true in the business world as well. The most innovative clients have the highest levels of growth, profitability, employee engagement and success.

New Product Development

One of the most visible forms of innovation is developing new products and submitting patents. No manufacturer can thrive long term without a keen eye to research and development, designing new products, and upgrading existing products. The World Intellectual Property Organization (WIPO) reported that the demand for patents hit record levels in 2022. It is no accident that India’s patent applications shot up by 25% as they emerge in the manufacturing realm. China filed the most international patent applications, followed by the US and Japan.

New products can drive success. For example, at a lighting manufacturer, the CEO put a heavy emphasis on designing new products to enter new markets and maintain their top position in their industry. He was one of the only executives investing in people at the height of the Great Recession. Excellent talent was available, and so he hired when the competition cut and invested resources into research and development. Fast-forward a few years and they had developed new products, got architects to spec their products into plans, and they were growing steadily in the new market.

Supply Chain Innovation

Innovation does not come just in the form of new products. You can reconfigure, repackage, develop new services, and find ways to meet unmet needs. These forms of innovation can be far more important as few people develop the new sticky pad. Even the iPhone was an iteration of the iPod which was simply a better “Sony Walkman”. Supply chain innovation can be a critical ingredient to success in the next decade. During the pandemic, executives learned that supply chain should be integral to their strategy to drive profitable growth. Start with your ideal customer and find the best way to grow and innovate with them.

For example, in a piping insulation manufacturing company, providing high quality products and rapid service was cornerstone to growing the business. They had built a distribution network to position product closer to their customers to provide short lead times and quick turnaround service; however, since they didn’t store all items at these distribution centers, they also experienced increased freight costs to supplement customer orders and ship direct from the manufacturing facility when needed. Service suffered because the right product was not in the right place at the right time, and storage costs increased with this model and due to the bulky nature of the product. Thus, a focus was put on innovating the supply chain model to find a new solution to provide short lead times and high service levels while minimizing costs and inventory.

The executives invested in supply chain consultants, supported innovation with trials/ pilots of new replenishment strategies, rolled out advanced ERP and planning system functionality, reviewed and upgraded processes, and designed inventory analytics to support improved service at lower costs and inventory levels. Not only did service levels dramatically improve from the high 30%s to the 90%s for On-time-in-full (OTIF), but costs and inventory levels were reduced. As improved and predictive information became available with business analysis and reporting, they also were able to make key pricing, product rationalization, and service policy decisions sooner and created a resilient supply chain.

Operational excellence is no longer enough. Innovation has become cornerstone to success. There will be more opportunity than ever before during the next decade, but only for those companies continually innovating and improving with changing circumstances. Those that innovate will be ready to take advantage of market opportunities and will pivot with evolving conditions. Will you innovate and grow or decline and die?

Lisa is founder and president of LMA Consulting Group, Inc., a consulting firm that specializes in manufacturing strategy and end-to-end supply chain transformation that maximizes the customer experience and enables profitable, scalable, dramatic business growth. She recently released SIOP (Sales Inventory Operations Planning): Creating Predictable Revenue and EBITDA Growth as an e-book that can be found at https://www.lma-consultinggroup.com/siop-book/.

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Originally posted in Adhesives and Sealants Industry in May of 2023

As the healthcare industry supply chain faces more challenges, supporting industries must be proactive, resilient, and innovative.

Although the visible bottlenecks in the healthcare supply chains are getting calmer, volatility will remain high. From the impacts of increasing interest rates and bank failures to labor and material shortages to global conflicts, the risks in healthcare supply chain will skyrocket. This situation will create as many opportunities as challenges, and so the proactive, resilient, and innovative companies will thrive while the rest diminish. The key will be deliberately making that choice and ensuring your end-to-end supply chain partners are on that same trajectory.

Current Status of Healthcare Supply Chains

Since the supply chain is an interlinked series of suppliers, manufacturers, and logistics partners, the bottleneck moves from one link to the next as demand and supply are out of alignment. During the pandemic, the visible signs were abundant with ports stacked up at the ports. Fast-forward to post pandemic and much of China was locked down for almost a year, the Russia-Ukraine region has been in war and the Great Resignation has grown across the world (reducing the number of people in the workforce to lower than pre-pandemic levels), severely limiting supply while demand raged as people started to spend money, catch up on medical appointments and live life again.

Thus, critical shortages and extended lead times remain while there is a glut of inventory in the “wrong” products in the “wrong” place at the “wrong” time, leading to continued disruption, inflation caused by limited supply, and recessionary signals caused by the cost of capital and the oversupply of “wrong” products throughout the supply chain. To make matters more challenging, global tensions are on the rise with China and several other countries that supply essential medical devices, key materials, and active pharmaceutical ingredients, as well as other critical commodities and components.

Inflation, Workforce Issues & Labor Shortages Adding to the Volatility

Inflation, workforce issues and labor shortages are further disrupting healthcare supply chains. The country faces a shortage of up to 124,000 physicians by 2034, including 48,000 primary care physicians, according to the American Medical Colleges. Of immediate significance, according to The American Hospital Association, 136 rural hospitals closed from 2010 to 2021 alone. And, according to the Chief Healthcare Executive, the Texas Hospital Association has warned that 1 in 10 hospitals in that state is at risk of closure, with nearly half of that state’s hospitals projecting negative operating margins. As these medical professional shortages persist and closures occur, patients still require attention. Thus, healthcare is on the move, and the supply chains will have to catch up. Thus, more of the “wrong” items will be in the “wrong” places at the “wrong” time., thereby creating additional disruption, inflation to move and/or transfer them (from one owner to the next), and inventory stockpiles in the “wrong” place.

The Successful Path forward

There will be more opportunity than ever before for proactive, resilient, and innovative companies to gain market share during these volatile times. The successful companies will take control. Starting by targeting their ideal customers, they will focus limited resources on what provides the most value to these key customers, including providing value-add services such as vendor managed inventory so that their customers have the “right” products in the “right” place at the “right” time with minimal resources and risk.

They will go further into their supply chain to assess risk and mitigate shortages of critical components and supplies due to resolvable issues such as delays in transportation and material and labor issues at a third-tier supplier. Reliability will be prioritized over cost, and additional suppliers will be qualified even though the cost and time required is high. Backup suppliers will be scalable to mitigate issues such as those that occurred in the baby formula market. And taking control of essential healthcare supply chains will become a priority as reshoring and nearshoring production gains momentum. For example, Costa Rica and Mexico are building strong medical device manufacturing clusters to support healthcare supply chains. And the successful will deploy technology to support the sustainability and scalability of these initiatives.

It is no longer sufficient to leave manufacturing and supply chain reliability to chance. The proactive, resilient, and innovative will thrive and gain the opportunity to grab market share from those remaining on the roller coaster of volatility. Think ahead, be proactive and be willing to invest in supply chains of the future to support your ideal customers and be uniquely positioned to grow and thrive.

Lisa is founder and president of LMA Consulting Group, Inc., a consulting firm that specializes in manufacturing strategy and end-to-end supply chain transformation that maximizes the customer experience and enables profitable, scalable, dramatic business growth. She recently released SIOP (Sales Inventory Operations Planning): Creating Predictable Revenue and EBITDA Growth as an e-book that can be found at https://www.lma-consultinggroup.com/siop-book/.

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