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2014

mfgteamwork-300x228.jpgI’ve always seen the power of networks; however, there is a heightened sense of urgency surrounding the topic for those executives who would like to thrive in today’s new normal business environment. In just the last month, I’ve witnessed countless examples of the critical importance of networks. You’ve run out of materials and need urgent attention. You need to find an exceptional leader ASAP. You have a technical challenge and don’t know where to start. The answer = the power of your network.

What is a network? For a recent presentation I gave on leveraging social networks to drive operational performance, I referred to Webster’s definition of social networks – “a network of friends, colleagues and other personal contacts”. A network can take many forms from in-person to on-line, etc. Options are endless in today’s information overload society.

Although we could talk for pages on the topic, I thought we’d focus on a few questions to start: 1) What’s the value of a network? 2) What is the current state of your network? 3) Where do we start?

1.  What is the value of a network? - Relationships! This cannot be understated in its value. None of us do business with companies. We do business with people. Take a step back from there – we do business with people we know, like, trust and respect. It’s as simple as that.

Perhaps you think it doesn’t relate to you in your current position? Wrong! We never know what will happen from one day to the next. You might be let go from your job. You might get a challenging yet critical assignment from your manager or CEO. You might get a visit from an unhappy employee or the Chairman of the Board. An unexpected event might occur in your personal life (whether good or terrible, it requires immediate attention). Where do you start? In my 20+ years of experience as a business consultant, former VP of Operations & Supply Chain, and as a trade association leader across multiple industries and globally, the answer never varies – with your network.

For example, I’d go to my well-connected relationships to ask for advice in the best ways to search for a new job. I’d go to my industry and functional network contacts to ask for help in researching my critical assignment. I’d go to my organizational development contacts and mentors for help with the unhappy employee or to answer the Board member’s question. And I’d go to whichever expert relates to my personal situation. Recently, my 20-year-old cat whom has been cared for by my adoring parents for the last 12-14 years was dying, and it was traumatic. It helped that my cousin is a veterinary expert. The bottom line is the following: What could be more important than your network?

2.  What is the current state of your network? - This is most often overlooked yet is an essential step in creating a powerful and enduring network. Who is in your network? I guarantee you that no matter how bad you think the state of your network is currently, there is something there to start with – everyone has someone in their network. How have you been treating your network? What do you receive from your network? Prior to jumping on the bandwagon to meet all sorts of new people to add to your network, it has proven extremely valuable to take stock of your current network. Nurture your network.

3.  Where do we start? - So, at some point, we realize we need to expand and build our networks. The first key point is to not neglect your current network! Otherwise, you are 1 step forward, 1000 steps back. Not a recipe for success. Beyond rule #1, it is a good idea to think about your objectives. What are your professional goals? What types of projects will you need to focus on in the next several years? What types of issues continually arise? What opportunities are you pursuing? How do these questions correlate to your skills and your current network? Be clear on your goals.

Next, identify the types of people you’d like to include in your network. What is their core philosophy? It is surprising how often this question is ignored until it’s too late. It’s a waste of time to build a network of people who do not align with the way you do business and your principles and values. What expertise do they have? Are they a functional expert? Industry expert? Is geography important? (Are in-person meetings important?) Do they share a common passion? Do you enjoy spending time with them? Are they members of your extended supply chain?

Success or failure boils down to the power of your network. Do not overlook this essential building block for success.

Prioritize developing a talent edge and everything else will follow. It isn’t capital intensive and doesn’t require precious cash so why not give it a try?

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Why Are Communications So Difficult?

Walk with Confidence

Lean.jpgWe hear a lot about lean, Toyota Production System and the like; however, I rarely hear about Lean I.T. A friend and colleague, Vicki Jeter, is exceptional at designing and implementing lean for I.T. which boils down to providing value in the eyes of the customer, driving out non-value added work, and leveraging systems to achieve bottom line results. We’ve worked together on several projects, and I’ve adopted several of her strategies for success as IT is core to elevating business performance. A few keys include:

 

Provide value - forget about the latest and greatest technical gadgets and software fads; instead, think about how to leverage your systems to provide value for your customers.

Automate - look at each task for what is non-essential and can be automated. There are endless opportunities to automate in I.T. and for the business.

Streamline - if you cannot automate, how can you streamline the process utilizing the system?

Leverage - how can you leverage your systems to improve decision-making and drive bottom line results? Look for underutilized assets, systems, fields, functionality etc.

Eliminate waste - are you performing non-value added tasks or extra steps? Routinize maintenance tasks and systematize all tasks that do not require high skill levels so that your valuable resources focus on what's most important.

 

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Lean: Uncommon Common Sense

 

How Do You Implement Lean for Project Management?

continimprove-300x191.jpgTake any business process. I have no doubt there will be hidden opportunities for process improvement. When is the last time you looked at your processes?

You could follow a program such as lean manufacturing, the Toyota Production System, Total Quality Management and the like. Continuous process improvement builds in change as part of the corporate culture. Or, you can just take a fresh look at your processes. You’ll be surprised by what a review could uncover. A few methods to help uncover hidden opportunities include the following:

1. Ask the people performing the process - Outrageously simple? Possibly; however, in my experience, it is rarely done. Why not start there?

2. Look for unexpected success – What caused the unexpected success?  Can you figure out how to repeat it? It might be a process improvement opportunity.

3. Rejoice in unexpected failure – It might seem odd but unexpected failure can be one of the easiest ways to identify opportunities. As my mentor says, if you haven’t failed, you aren’t trying hard enough. The key is to learn from your failures and find the key to success. Just think about Edison – the light bulb came after countless failures.

4. Think about how to dramatically speed up the process - In today’s environment, speed matters. Don’t just think about 20% improvement. What would it take to double your speed? It’s likely process improvement ideas will emerge.

5. Ask customers & suppliers – Whether internal or external, don’t overlook the unique opportunity to ask your customers and suppliers for ideas and feedback. How can you improve the link and connections between you? Multiple heads are better than one!

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The Keys to Implementing Process Improvement to Drive Results 

Business Process ROI

ecommerce-300x200.jpgAre you offering e-commerce options for your customers? If not, you’ll be left in the dust! It is no longer an option for companies if success is an objective. E-commerce eliminates time and distance as barriers – who can afford not to offer customers a way to get “what they want when they want it”? Better yet, it is often at better margins to boot! For example, according to Modern Distribution Management’s 2013 State of E-commerce in Distribution, the number of distributors whose e-commerce revenue comprises 5-10% of total revenue has grown by 50% since last year. Substantial!

E-commerce has been popping up all over lately. Not only have I been working with several clients who require e-commerce solutions but I’ve also recently completed quite a bit of research on e-commerce to prepare to sit on a panel to discuss its impacts. As important as e-commerce is to business success, there are many considerations to consider. A few key ones include: 1) Start with strategy. 2) Become a generalist – rapidly. 3) Systems design & integration is paramount.

  1. Start with Strategy: As with most business topics, it makes sense to start with the big picture. What products and services do you want to sell via e-commerce? What are your customer requirements? Do they expect delivery in 1 week? 1 month? 6 months? Or 8 hours? Which channels do you utilize? Are omni-channel fulfillment strategies required? How does this fit in with the rest of your business? What is your business strategy? Is your organization ready?

There are countless questions; however, the most important first step is to take the time to think about strategy. Although you cannot take “too long” as undoubtedly, you’ll be left in the dust, it is equally important to develop your e-commerce strategy in a deliberate manner vs. backing into it. Recently a key contact chose this approach and put critical projects aside to consider the new business environment.

  1. Become a generalist – rapidly: I’m sure you’ve heard the advice to specialize, specialize, and specialize. When it comes to e-commerce, you must be an expert generalist. Oxymoron or not -we better get good at it!

Manufacturers will need to make rapid changeovers and quickly respond to customer needs. Flexibility and agility are key to success.Distribution centers and even smaller warehouses must re-design their warehouse to simultaneously support multiple channels – traditional distributors, retail, e-commerce, etc. Typically the optimal warehouse process and layout is different for each of these, and so you must find a way to support all of these customers efficiently and effectively.Planning & transportation will also change. You’ll need to optimize cost, service, and speed for all of these types of customers on the fly. If you have multiple facilities, you’ll want to dynamically optimize across your network (known as dynamic optimization).

  1. Systems design & integration: In order to stay ahead of these changes and be an expert generalist, it will be of paramount importance to leverage technology. Are you able to redesign processes on the fly? Do you even know what they are? If not, do not despair – you are far from alone. However, immediately, find out, document, leverage experts, build flexibility into your processes and get on top of it.

Do you have the latest systems which will help you cut across multiple channels and business processes in an efficient and effective manner? Which critical business requirements must your system have? Are your people ready for this transition? What skills and experiences do they need to succeed in this new environment?

How many purchases do you or your family members make over the internet? How does this compare to 5 years ago? The opportunity of e-commerce will pass us by if we do not jump aboard. What are your next steps?

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The Amazon Effect

outsourcing-300x174.jpgFor many years, companies outsourced as a natural course of activity. Unfortunately, often times, they didn’t even perform an analysis of the total benefit; instead, everyone else was outsourcing and so CEOs, Board of Directors and the like expected it to occur. Now, I host executive discussions and the topic arises in reverse. Let’s bring back manufacturing to the U.S. Even Walmart is promoting their investment into U.S. manufacturing….

Of course, I advocate looking at the facts. It is not so easy to move factories, equipment and people all around. Take stock of what you are doing and consider the following factors:

1. Customer requirements - Many of the reasons folks are considering in-sourcing or near-sourcing is because customer requirements were missed in the initial assessment. How quickly must you respond?  With R&D? Customer deliveries? Answers? Is your process set up to succeed?

2. Total cost - I doubt anyone who outsourced thought it would become a cost detriment to do so; however, in many cases, it has! Consider ALL costs – transportation, IP, inventory carrying cost, rising wages, etc.  We have gotten to the point where the total cost for value-add products is close to equal.

3. Cost driver – Consider the costs that matter in your business. Don’t bother even thinking about in-sourcing if you produce a small, light-weight commodity product with a high labor component. Of course it will make sense to produce somewhere else. With that said, which country could change as labor and other costs change? On the other hand, if your product is value-add, bulky, heavy and has stringent customer expectations (across the world), I imagine you wonder why you outsourced in the first place.

4. Strategic - What differentiates you from the competition? Your product? Your service? Your R&D? Keep what is strategic and core to your business within your control.

5. Options – Go back to the beginning. Why are you even considering this topic? What do you want to accomplish? Reduce cost? Get rid of a non-core process? Are there other ways to achieve that same goal? Shouldn’t all options be considered?

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Is Outsourcing Dead?

to-measure-is-to-know.jpgOne of the keys to success for any business is to watch metrics trends. In my experience, if a client watches key trends, they tend to be more successful than most. If they don’t, they struggle. Fortunately and unfortunately, it is as simple as that.

One of the first questions I ask when I work with a manufacturing or distribution client relates to metrics. Which do they track? Why? What does the trend look like? I often find clients who track all sorts of metrics; however, I rarely find clients who not only track trends but watch the trends. It seems laughable that we’d employ people to track information yet do nothing with it but it happens every day. Thus, a few simple steps can achieve significant success.

1. Select carefully: Pick a few metrics which are meaningful to your business, and throw away the remainder. In essence, FOCUS. For example, in one of my manufacturing clients, they tracked at least 20 metrics yet still struggled to improve service levels. Thus, we threw out the vast majority and selected to follow just those metrics which would indicate whether our service was improving. This focused everyone on these few metrics.

2. Simple trend: Develop a simple trend for the metrics. Reacting to a single point in time is often worse than not tracking metrics. Why? Executives jump to incorrect conclusions based on a single occurrence. Instead, react to the trend. Throw out outliers and focus in on significant changes in the trend line. Are the changes explainable?

3. Act: Do not just track and discuss; you must ACT. Dig into root causes, develop action plans, put together teams, and make changes. Then take a step back and see whether the improvements are having the expected impact in the metrics. Adjust.

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Scorecards/ Metrics: How to Make a Difference to Your Bottom Line

Synthesize for Results