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Originally published on Patrick Daly Interlinks Podcast on 3/12/2024

The post Building Agility and Resilience for Business in 2024 appeared first on LMA-Consulting Group, a supply chain consulting firm.

CLAREMONT, CALIFORNIA – January 25, 2024 –  Amidst escalating global supply chain challenges, LMA Consulting Group remains at the forefront of offering strategic solutions. Lisa Anderson, MBA, CSCP, CLTD, President of LMA Consulting Group Inc., highlights the critical situation: “The recent turmoil in the Red Sea, triggered by Houthi drone and missile attacks, has significantly amplified risks in global shipping, particularly affecting the Suez Canal and Red Sea routes. These complexities, combined with ongoing disruptions at the Panama Canal, underscore the urgent need for agile and robust supply chain management.”  

The Red Sea, a vital maritime artery, is now a high-risk zone due to geopolitical tensions. Houthi attacks have forced a significant rerouting of shipping lines, with many opting for the longer journey around the southern tip of Africa.  This detour, while safer, adds around ten days and 1900 nautical miles to typical Asia-North Europe services, escalating costs and prolonging delivery times.  

Additionally, the Panama Canal faces challenges from drought-induced vessel limitations, further exacerbating global supply chain disruptions. Its reduced capacity is compelling more ships to navigate through the already stressed Suez Canal.

Ms. Anderson advises, “In this volatile global context, businesses must swiftly adapt and strategically plan ahead. Exploring alternate routes, diversifying supply sources and considering nearshoring or reshoring are imperative to mitigate these emerging risks.“

LMA Consulting Group is at the forefront, aiding clients in traversing these intricate challenges. By implementing a comprehensive Sales Inventory Operations Planning (SIOP) process, businesses can boost agility, secure capacity and maintain a dependable supply chain despite these disruptions. Companies that had preemptively diversified their manufacturing and supply chain networks are now experiencing the benefits of reduced risks and enhanced customer service.

LMA Consulting specializes in guiding businesses through turbulent times with strategic planning, comprehensive supply chain transformation and resilience-building solutions. For more insights, download Ms. Anderson’s 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.  A recognized supply chain thought leader, Ms. Anderson has been named a Top 40 B2B Tech Influencer by arketi group, a Top 16 ERP Expert to Follow by Washington-Frank, among 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.” offers strategies for creating bold customer promises and profits. An expert on the SIOP process, advancing innovation and enhancing supply chain resilience, Ms. Anderson is regularly interviewed and quoted by leading publications. 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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The post Succeeding During Volatility: A Focus on the Fundamentals appeared first on LMA-Consulting Group, a supply chain consulting firm.

What is clear is that VUCA (volatility, uncertainty, complexity, ambiguity) is continuing in the forefront and will continue to be our “new normal”. As I recently debated with the Wall Street Journal, we are in an era of non-stop disruptions. Look no further than the escalating war of Russia and Ukraine (with Russia making even more money to fund the war with the higher prices of oil and their increased sales to China and India), China sending spy balloons over US critical infrastructure while Zero-COVID policies disrupted supply during 2022, weather events, strikes, bloated inventories, and much more. The bottom is that if you don’t take control of your manufacturing, you will be at the mercy of these non-stop disruptions.

Ways to Take Control of Your Manufacturing

The good news is that there are many ways to take control of your manufacturing. The key is to stop leaving your ability to fulfill customer demands to chance. If you do, you will continue to be deterred, delayed, and derailed in servicing your customers and have no hope in taking advantage of opportunities as they arise.

Let’s look at a few good options:

• Domestic manufacturing/ reshoring: Expand domestic operations and/or move your operations back to where they came from (assuming your customers are there as well). This is the ultimate in taking control by fully taking control of your manufacturing process. There are several U.S. companies’ reshoring. For example, I was recently quoted in Sports Business Journal about Daktronics on their domestic sourcing strategy. Several big companies like Tesla, Intel, and others are investing in domestic manufacturing whereas mid-market companies are as well but are less likely to promote these moves until complete.
• Nearshoring/ Friendly shoring: Expand your sourcing to nearby countries (to your customer base), and, most importantly, ensure you expand and/or move to countries with friendly relations to the U.S., Europe, and other allies. If you move supply and get turned off at the next disruption, you have wasted an enormous amount of money and given intellectual property and capabilities to unfriendly nations.
• Backup sources of supply: If you cannot quickly reallocate your manufacturing capabilities, it must be a critical priority to develop backup sources of supply. Even if you have control of your manufacturing, you should develop backup sources of supply. The next decade will not be for the faint of heart, but it will be full of opportunities for those who are proactive and forward-looking.
• Build partnerships with regional/ local suppliers: Instead of taking full control of your manufacturing operations, you can source regional/ local supply partners. For example, a client has greater sales opportunities than their existing facilities can supply, and so they are proactively qualifying suppliers and offloading volume to regional manufacturers.
• Outsource a portion of your manufacturing process: Instead of fully outsourcing a product or group of products, you might have an opportunity to outsource a manufacturing operation. For example, a client is outsourcing machine shop work and completing the remaining operations steps in-house. Similarly, they outsource the weld process to a different group of suppliers for certain products. These actions allow them to fulfill their sales volume with high service levels while maintaining control of service and quality to the customer.
• Leveraging technology like 3D printing: For certain types of products, companies are using 3D printing/ additive manufacturing to rapidly produce close to customers and/or next step manufacturing operations.

Priorities to Keep in Mind

As you reevaluate your manufacturing footprint, you should be keeping several priorities in mind:

• Raw material supply: It might be obvious, but as you move or reallocate manufacturing operations, it is important to consider your raw material, component, and ingredients supply base.
• Transportation infrastructure: If anything has become clear since the pandemic, it is that container shipping, trucking, rail, air and last mile delivery must be in sync with the end-to-end supply chain. Otherwise, nothing else will matter as your customer will not receive their product.
• Distribution network: Similarly, to transportation infrastructure, as you reallocate manufacturing capacity, consider impacts and requirements for your distribution network. Is your distribution network flexible?
• Technology: There is no way to succeed if your technology infrastructure is not supporting your end-to-end supply chain visibility and performance. Is your ERP system agile? Do you have business intelligence, dashboards, and reporting? Are you connected to supply chain partners with EDI, Blockchain, etc.? Are you automating as you expand domestic capacity?
• Talent: Certainly, there is no chance for success without the manufacturing and supply chain talent to execute these changes. Have you reallocated responsibilities? Expanded capabilities? Provided training? Supported in-house resources with supply chain consultants, trusted advisors, etc.?
• Capital & cash: Do you have access to capex (capital expenditures) and the working capital to fund whatever actions you need to take? It isn’t free to take control of manufacturing. There will be investments and cash required to support long-term success.
• SIOP / S&OP: Smart executives are rolling out Sales, Inventory & Operations Planning programs to get in front of customer demand, how they will fulfill that demand (reallocating manufacturing capacity, make vs. buy), and whether they should make changes to their pricing, supply chain footprint, cost reduction programs and other execution plans.

Please contact us with stories, issues, and opportunities on what you’re doing to take control of your manufacturing. 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 eBooks including our new release, SIOP (Sales Inventory Operations Planning): Creating Predictable Revenue and EBITDA Success.

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Our clients continue to experience an unprecedented level of volatility and complexity. The common themes include:

• Continued supply chain disruptions: From computer chips to commodities to everyday components/ materials, clients continue to experience shortages and/or extended lead times.
• Continued challenges in finding people: Whether you are looking for a production employee or a Director of Supply Chain, no client is having an easy time finding talent. The best realize they must keep the top talent they already have!
• A Focus on Taking control: Whether you are reshoring, nearshoring, sourcing new suppliers, adding backup suppliers, offloading or partnering, the best are taking control of their ability to support customers.
• Understanding the customer: Customers’ needs are evolving with changing business conditions. The best are staying on top of their ideal customers’ changing needs and preparing for where the puck is going, not for where the puck is.
• Preparation for Inflation & Deflation: There is no doubt clients are experiencing increasing prices yet there are also deflationary pressures. The successful are preparing for both in a smart way so that they can take advantage of opportunities yet not be weighted down in cost and inventory.
• Opportunities Abound: Because there is a wave of owner operators looking to sell and stodgy organizations are cutting costs, slashing inventory and delaying investments and new products with worries over what’s coming, opportunities will abound for those prepared for growth and investing in technology, automation and talent to ensure the growth can be successfully delivered and profit flows to the bottom line.

Winning the Game

The most successful clients are emerging with a winning formula:

• Retaining, developing, hiring & supplementing talent to think three moves ahead (as in a game of chess)
• Providing this visibility to the organization and key partners (customers, suppliers, trusted advisors)
• Making the appropriate strategic decisions, investments, and allocation of resources to support the path forward
• Ensuring the successful execution of these plans – after all, 80% of success is in execution
• Incorporating sustainability so that the processes will carry forward into the future

How Can LMA Support You?

Our ideal clients are thinking about these strategies for winning the game. Our best expertise is in helping clients to:

1. Determine how to think three steps ahead – develop processes to look ahead, evaluate strategies and facilitate key decisions for creating your future (instead of reacting to your future) with supporting processes such as IBP (Integrated Business Planning), also known as S&OP (Sales & Operations Planning) or SIOP (Sales, Inventory & Operations Planning)
2. Partner with the client to execute “make it happen”, also known as S&OE (Sales & Operations Execution) in technology circles.
3. Leverage processes, tools, ERP systems and related technologies (automate what makes sense and manage exceptions)
4. Teach the client to fish.

We prefer complex environments (ETO, CTO, collaborative ordering/ VMI, combined BTB/ BTC, high-tech/ high-touch, etc.) which lead us to industries such as building and construction products, life sciences/ healthcare products, aerospace and defense, industrial products, and food and beverage. We are driven by our passion for advancing manufacturers.

And we are thrilled to have recently been included on key lists:

• Top 55 Supply Chain & Logistics Expert
• Top 10 Women in Supply Chain
• Top 16 ERP Expert

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

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In thinking back to the tours and events we’ve participated in, spoke at or led in the last 30 days, it provides a great cross-section of manufacturing and logistics industries and company sizes:

• Professional Women in Healthcare – spoke on the Amazon Effect
• Aerospace & Defense Forum – spoke on the resilient supply chain.
• Anti-seminar themed Executive Luncheon – was a panelist on the topic of increasing demand
• CSCMP state of the industry event – listened to the president of CSCMP discuss the latest statistics and timely topics in logistics
• ProVisors manufacturers and distributors event featuring a City National Bank expert discussing an economic forecast
• The Founder of UGG brand talking about how he created the UGG brand and grew the company from the back of his van to what it is today
• Tours of UPS, Amazon, Pacific Mountain Logistics, Shamrock Foods, Goodwill, Lifestream, ESRI and more.
• Meetings with 9 academic institutions in the Inland Empire and surrounding areas 
• Harvey Mudd executive roundtable event on M&A and preparing for sale.
• Webinars with APICS-IE on IoT and with the Society for the Advancement of Consulting on overcoming obstacles, leveraging PR and more.
• And more…

So, what is at the cross-section of ALL of these tours, events and/or interactions?

The need for a resilient end-to-end supply chain!

What is in common is the sheer amount of volatility and disruption. Whether the disruptor or the disrupted, entire industries are transforming the way business is done. Some are preparing to have artificial intelligence and automation take over. For example, according to research performed at the University of Redlands, 60%+ of jobs are subject to automation by 2025. Others are dealing with massive benefits or disruption from changes in trade, depending on their role while others choose to ignore the hoopla and are growing while everyone else is caught up in the chaos! And this is just the beginning. Trade wars or not, many companies are near-sourcing, and looking at additive manufacturing and vertical integration. What’s next? If you develop a resilient supply chain, the idea is you don’t have to worry because you’ll successfully navigate disruption to achieve peak performance. Contact us if you’d like to find out how to create a resilient supply chain. 

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Thinking about our clients, colleagues and trade association/ trusted partner contacts from across multiple industries and company sizes, four overarching themes emerge in response to the question, “What’s ahead for business?”. 

1. The customer experience: It doesn’t matter whether we are talking about manufacturing, logistics, healthcare or services, the customer experience is of paramount importance. This is quite different from customer service! The customer experience relates to how the customer feels after interactions with you and your firm. Whether you achieved perfect OTIF (on-time-in-full) or not, if the customer doesn’t want to do business with you, you haven’t achieved a superior customer experience. What will you do to up the ante?
2. The holistic view: Although this is a common thread in our client conversations, it isn’t commonplace. It has become a “must” as the global marketplace is more interconnected than ever before, systems and technology are more connected with everyday interactions, and the customer and profit must go hand-in-hand. Clients who address a singular topic such as running a kaizen instead of looking at the holistic view of what will dramatically improve their business performance will be left in the dust. Are you looking at what your executives or Board are asking about or are you taking a step back to look at your business from the holistic view?
3. Volatility is the new norm: The stock markets and business performance are becoming less and less related to one another yet both are volatile. There is uncertainty in global trade, government shutdowns, the impact of artificial intelligence and robots, natural disasters such as the California fires, what the disruptors such as Netflix and Uber will do next and much more. Are you thinking about how to create a resilient end-to-end supply chain?
4. The Coming Power of manufacturing and supply chain:No matter your industry, you better pay attention! For example, according to a Healthcare Finance article, by 2020, supply chain expenses will eclipse labor as the new number one cost in healthcare. Also, according to a Chairman at the City of Hope, the cure for several types of cancer is within reach but will be cost prohibitive unless manufacturers figure out how to produce in volume and less expensively. Certainly, Amazon is turning the world upside down, creating an entirely new relevance to the art of maximizing service, inventory and margins simultaneously. Reshoring is on the rise, additive manufacturing is uniquely positioned to transform industries (customized, immediate products on demand), and bringing the customer closer to the source is a recipe for success. Do you still see manufacturing as outsourced to China or as a force? 

Our most successful clients will be thinking about these trends to integrate into their strategy, their customer conversations and their employee and partner plans. Are you positioned to take advantage of the opportunities and avoid the risks? If you would like an expert to assess your situation, contact us. 

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In today’s new normal business environment, volatility is the new norm. Change is required to remain competitive or to become competitive. If you manage change better than your competition, you’ll have the opportunity to leapfrog the competition.

In the last several years, I’ve seen a multitude of examples of companies going through change – the implementation of a new enterprise-wide system, a company sale process, a company turnaround, double digit sales growth, business process change and improvement, etc. This trend is only increasing as Executives realize that change is not only a necessary evil but is also required to support continued and improved business results.

Based on my experience with multiple companies in multiple industries in managing change, I’ve uncovered a few secrets that apply to all of them in how to manage change while achieving positive results. Communication is the obvious path to success; however, the secret is in the communication process, material etc.

1. Explain the whys. This might sound obvious but it is often overlooked. Begin by communicating about the change – why is it required? What if we don’t change? Why is it important to the company goals? Once people understand why, they can accept the change. I’ve found that the opposite of the common thinking of “people don’t like change” to be true – so long as people understand the change and are communicated with proactively, they are typically fine with change – and many are even excited about it.
2. Communicate the plan. It doesn’t matter if you have a detailed plan; just communicate the basics – what is happening, what are the likely next steps, how will the change affect them, etc. Don’t worry about what you don’t know. Just tell them what you know and what you are able to communicate at this time, and let them know that you will communicate as you know more – and do what you say you will do. If it is a sensitive subject matter such as a company sale, communicate what you are able to tell them and let them know that there are elements of the process that you cannot share but that as you are able to share additional information, you will. The critical part is that they know that you will communicate what you can when you can – this avoids the large issue that arises when people with missing information fill in the gaps with what they think (and it is almost always much worse than reality – and it definitely results in significant roadblocks to success).
3. Listen. Provide a vehicle for people to communicate their concerns, ideas etc. You don’t have to have all the answers; just listen. Listening is an undervalued and underused skill – use it! You’ll be surprised by the results – the key is to truly listen. Don’t think about your next appointment or what you’ll have for dinner. Focus your attention on listening.

I’ve heard feedback that these secrets sound “too simple”. My response to that is “great” – I’ve found that it doesn’t matter if it is simple or complex. The result is what matters, and these secrets “work”. Why waste time with a complicated and hard to understand process if you can achieve the same results or better ones following a simple one?

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