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M&A is on the Rise

Posted by lisaanderson Jul 28, 2016

IveBeenThinkingBlog-1024x459.jpgA few weeks ago, I attended a ProVisors ODAM (Ontario-region based distributors and manufacturers group — don't you love the name?!) session on the current state of the M&A market in Southern California — and specifically in the Inland Empire for manufacturers and distributors. The bottom line is that it remains a good time for M&A. 


However, what I see frequently is business owners who think about M&A "too late" — if you want to sell for top dollar, you must start strategizing YEARS in advance. It can make a significant difference to the multiple of EBITDA (earnings before interest, taxes and depreciation) or revenue earned. For example, in the first quarter of 2016, the low multiple for EBITDA was 9.6 and the high end was 11.0. If you have even just a few million in EBITDA, this difference is interesting. And, this doesn't get into the fact that if you have the right advisors and are proactively thinking about these concepts, you can significantly raise the multiple over the top end. There are countless examples.


Even if you don't plan to sell, shouldn't you be interested in increasing the value of your business for an ESOP (employee stock ownership plan), to recognize your top talent and to reinvest in business growth? There is something to be said for acting as though you will sell no matter your plans. When I was VP of Operations, we went through a preparation for sale process, and it was invaluable in understanding the business and profit drivers — something we should have dug into regardless of any potential sale!


One tip to implement this week:


So, I bet you are wondering what could possibly be done with M&A in a week. You wouldn't be alone; however, you have to start sometime. Why not this week?  If you are a business owner or executive of a privately held company, think about your long-term plans what do you want to do with the business eventually? Or what can you do to help realize these plans? I'm sure there are countless activities. Pick one that you think is particularly important and start there. Gather your team and talk about it.


If you are in a public company, the key is to think about stock value. Almost all of the same initiatives are important to increasing the value of your stock. Pick one and start.

If you are not in a leadership position, don't despair. Do you know what the plans are within your organization? If not, find out. Ask questions. Find out how you can contribute. If you are in the loop, find a way that you can contribute to increasing the value of the company and start doing it. Run it by your manager if you need resources and to keep him/her in the loop. But, who is going to stop you from increasing value? To increase value, you have to provide better service, discover new markets, increase profitability, find ways to automate, etc. Aren't they all "no-brainers"?


Looking for more ideas to keep your supply chain connected? Access more tips and resources on my blog. And keep connected by subscribing to my newsletter and email feed of “I’ve Been Thinking…”

people.jpgIn real estate, almost everyone knows that location, location, location is the name of the game. The best house in the wrong location will not sell. It is imperative to pay attention to location. The same holds true in business success — it is all about people, people, and people. Who do you have on your team?

Lately, in today's Amazon-impacted business environment, we've been working with a few clients to rapidly increase service levels — to maintain happy customers, to grow the business, to gain a competitive advantage and for many more reasons. The degree and speed of success stems directly back to people. Of course, processes matter, skills development matters, systems and organizations matter; however, the 80/20 of success goes to people.

For example, in one case, we were making progress but not nearly as quickly as desired. A new leader showed up on the scene and suddenly progress kicked into high gear — and success started to follow. 

Similarly, one of the key factors of our new proprietary process, TST for driving supply chain performance is torque. In our example above, the leader kicked up the torque, and we kept an eye on speed and traction. Results followed. Knowing which lever to pull — and when to pull it — is the key to success. And, that goes straight back to people. 

Although this example related to a new leader, we find that success doesn't always require new leaders. For example, we can provide countless examples of empowering already-existing leaders in driving success. Identifying exceptional people — and leaders — is cornerstone to achieving success. Of course, identifying them is not enough. Similarly to identifying a root cause to a problem, the identification alone will achieve nothing. 

We cannot tell you how many clients we've worked with that know their problems and understand their opportunities yet made little to no progress when it came to the rubber hitting the road. Thus, once you've identified high potential people, empower them and get out of their way. Provide tools, training and support for roadblocks. Success will follow.

The bottom line is that PEOPLE will ensure that your bottom line hits your objectives.


Did you like this article? Continue reading on how to Profit Through People:


Leadership Qualities


Three C's to Leadership Success

Fotolia_90839217_XS.jpgAfter leading hundreds of projects and participating with hundreds more, I’ve looked for what created project success.

In this case study of project success, we asked questions: What was in common among the projects? Did the project teams do something in particular? Were they a certain type of project? Did the project sponsor do something unique? Did it matter if they crossed departments, organizations or parts of the world? Certainly, there had to be common traits that seemed to lead to project success – what were they?

The most common factors determining success – achieving project results on time, on budget and on target – include the following:

  • Project leader: Every truly successful project had a project leader who was effective. Not all were spectacular, but each one was effective in leading the project team. The project leader was respected by the team. In order to be respected, the project leader included the project team in the process, worked issues as they arose, was willing to push back as required, and was an effective leader overall.
  • Executive sponsor support: Not every project had a sponsor; actually most didn’t have a specific executive sponsor; however, they all had someone in some sort of position of authority who supported the project at critical junctures. This could be at the start – in essence, the project supporter got the ball rolling for the project. Or, it could have been related to a roadblock – the project supporter helped the team work through the roadblock. Or, it could be that the project supporter was a cheerleader for the project team or with the executive team to keep the momentum flowing.
  • Celebrate successes: A seemingly fluffy topic that was in common with the project successes was the celebration of success for wins along the way. Certainly, quick wins get the project off to a solid start and creates momentum. Most successful projects focused on creating quick wins – small is fine so long as it can create momentum. For example, my firm just introduced a proprietary process for driving supply chain performance called TST – achieving the right combination of torque, speed, and traction to drive performance. The torque component is vital. If you have speed and traction without torque, you have a slow start. As good as the team might be, if they get out of the blocks slow, it is a long, slow road to get to the finish line.
  • Critical path timeline: Although not all successful projects had a project timeline, every successful project had some sort of critical path timeline. In essence, the team understood what tasks were most critical, what sequence to complete these tasks and what handoffs were required along the way. When thinking about my TST process, this is the traction component. Steering towards the finish line is essential. Have you ever seen someone seemingly achieving victories and move quickly, just to find out they took the wrong turn? This certainly arises with project failures.

Most project teams that experienced failure got sidetracked in lengthy project tasks – some even followed up profusely on these tasks; however, the tasks were not necessarily those on the critical path timeline. In essence, they took several wrong turns, even though they were working hard and efficiently tracking task progress. From the technical point-of-view, I’ve found this to be the 80/20 of success! Put your follow-up and communication efforts here.

  • Speed: Certainly the third component of my TST process is a key to success with projects – and, I find it is one of the most common elements of success specifically in today’s new Amazon-impacted world. Unfortunately, if you get side-tracked with too much analysis, too much debate, and discussion on team objectives, too many conflicts over resources and the like, you slow down progress. Yet in today’s world, customers expect immediate service, 24/7 accessibility and quick access to the required information. If you are missing speed, you will be passed up by your competition driving in the fast lane!
  • Communication: This almost goes without saying as communication, communication, communication is as critical as “location, location, location” in real estate. Not only does the project team need to know why they are focusing on the project, who owns which task, with whom they should interact and collaborate in order to be successful, and to whom they should hand-off as the next critical path task, but they need to communicate with all related parties frequently. These should include the project sponsor, managers who need to support their efforts with resources and in communications, etc.

I’ve found these types of trends to be a strong indicator for success. Thus, make a deliberate effort to create your next project with these success traits, and I have no doubt you’ll be delighted with your project outcomes. Give it a shot and report back with your struggles and successes. Building on strengths and success is the best way to breed success.


Did you like this article? Continue reading on how to become a Systems Pragmatist:


Project Leadership Remains #1 Key to Success


Interested in Growth? Beef Up Systems & Project Management


On the 10 year anniversary of my business, I recognized 10 people for 10 years as LMA Advocates — people who have gone over and beyond, resulting in LMA Consulting's growth and success. I truly appreciate their support, expertise, ideas, feedback, etc. I would not be here today without them — and certainly not leading a growing consulting practice that helps manufacturers & distributors make — and keep — bold customer promises AND profits. I have the best job — helping clients and the people within my clients achieve significant successes. What could be better?


Kash Gokli.jpgAt my 10-year bash, I committed to recognizing one person each year on the anniversary of LMA Consulting. Thus, I'm thrilled to announce Kash Gokli, head of Harvey Mudd's Manufacturing Practice and Director of their Clinic Program as my 2016 winner. Kash and I facilitate the Harvey Mudd executive roundtables together and have collaborated on clients, APICS-IE, and more.


One tip to implement this week:


Don't worry about giving out an award in a week; however, think about what you could do to recognize someone who has gone out of their way to help with your personal and professional success. In the vast majority of my clients, a simple conversation of thanks would go a LONG way — don't underestimate the power of the 'small stuff'.


If you are a business owner or executive, take the extra 5 minutes to recognize your top talent. You will not be sorry — the VAST majority of people work because they want to make a difference; not for a small raise or bonus. Of course, a raise or bonus is gravy but enjoying work and making a difference is lasting.


If you are part of a team, think outside the box. Recognize people who have mentored you along the way. Recognize your peer that pitches in when needed. Recognize someone in another department who helped or gave you an idea. I bet if you think about it, you'll have "too many" people to recognize. Talk to them. Take them for coffee. Pick up the phone and say thank you. There are countless ways to recognize people.


Looking for more ideas to keep your supply chain connected? Access more tips and resources on my blog. And keep connected by subscribing to my newsletter and email feed of “I’ve Been Thinking…”

Fotolia_31064889_XS.jpgHow many times have we heard this? Or, perhaps your inventory resource will keep looking until he/she finds it; however, it took them 3 times as long to pick product to ship or materials to supply the line? Perhaps the line shuts down…..not good! Unfortunately, in my experience with manufacturing and distribution companies over the last 25+ years, it happens every day. Logistics managers are constantly struggling to keep their inventory intact. The problem is that inventory accuracy is dependent on several factors spread across multiple functions:

  • Transaction timing – it is not good enough to eventually (perhaps the end of the shift) “ship an order to the customer, enter production, transfer inventory, receive an RMA, address an item in quarantine and so on. Conceptually it is quite simple – the system transaction coincides in timing with the physical transaction. In reality, life gets in the way.
  • Transaction accuracy – even the best of typists make mistakes. Is the work being checked? I can’t tell you how many times a transfer of 100 might end up as 1000. Certainly could cause an issue!
  • Transaction understanding – even if you are accurate with typing, you might not understand the correct sequence of steps or the method to get the system to accept the transaction properly. This can lead to much confusion. The worst case scenario is that the system can get screwed up and require IT to fix it. The typical case is that the transaction accuracy is affected. Here’s a key question – do you know how to fix incorrect transactions? Think about how many of your resources know how to do this properly.
  • Coordination of resources – it is rare that one person owns every transaction performed within an area. Actually that creates a new set of problems as any time the person is out, everything goes awry. Typically, there are multiple people shipping, entering production, transferring items, etc. Transactions can get duplicated or forgotten with the best of intentions without clear-cut coordination.
  • Scrap/other adjustments – these create havoc for most of my clients more than anything else. Pay special attention to these.

It’s no wonder every organization struggles with transaction disciplines – and ultimately inventory accuracy. On the other hand, we’ve worked with dozens of clients on inventory accuracy and brought 50% - 60% (and unknown figures for untracked inventory accuracy levels) consistently to the high 90%’s.  Suddenly, customer service improves, productivity increases, and profit even follows – nice reasons to think about the importance of inventory accuracy.  If you’d like to talk further about your inventory accuracy struggles, please contact us.


Did you like this article? Continue reading on how to be the Strongest Link in your organization:


Transaction Criticality


Why Care About Systems Transactions?

IveBeenThinkingBlog-1024x459.jpgJust returning from meeting with my global advisory board in Sydney, I happened to speak to the International Business Group of ProVisors yesterday on "Global Supply Chain Partners: Associations, Networks & Resources". Thus, I've been thinking about the importance of international considerations — regardless of the business. I cannot think of a client that doesn't have some sort of international consideration — ranging from owning, partnering or sourcing manufacturing in China or Mexico to sourcing materials and parts from around the world to purchasing machinery from international companies to supporting customers globally to being impacted by global competition.....and the list goes on.


Expanding your thought process to include global can positively impact growth, profit, company value, cash flow and service — doesn't that sound like a no-brainer? That's one of the reasons my APICS Chapter has put together the theme "Navigating the Global Supply Chain" for the next executive panel and networking symposium (see below).


APICS oct 29.png


One tip to implement this week:


The first step to navigating the global marketplace is to be aware.


If you are a CEO, business owner or GM, set aside time to think about global implications for your business. What are they today? What do you expect them to be next quarter and next year? What would you like them to be? There is vast opportunity. For example, I know of several highly successful companies that have pursued the underutilized opportunities in exports alone. There are so many more, I could write a book on this topic alone.


If you are a process owner, set aside time to think and brainstorm with your team about global impacts that affect your area of expertise. Understand them. Are there opportunities to pursue? I'd be hard-pressed to find a business that couldn't find an opportunity in this arena. Find one and put together your thoughts, ideas and recommendations. Soon, you'll be ready to run it by your peers and senior leaders. New worlds of opportunity will open.


Looking for more ideas to keep your supply chain connected? Access more tips and resources on my blog. And keep connected by subscribing to my newsletter and email feed of “I’ve Been Thinking…”

inventory.jpgInventory management remains a timeless and vital topic for success. Every so often, we get away from talking about it on a consistent basis because it seems somewhat humdrum. But it isn't!


Earlier this year, I was asked to speak to a group of manufacturing leaders about it because of the ongoing importance. Then, I was asked to speak to a group of quality experts on the topic as it not only is timeless but it also crosses boundaries. Next, a peer group of manufacturing leaders asked me to speak on the topic. I didn't have to be a rocket scientist to realize the importance of inventory to company performance, executives and supply chain leaders.


It started me thinking.... Banking executives understand the critical importance and frequently refer clients for any number of inventory-related needs: how to bring inventory levels down to free up cash, how to bring inventory accuracy levels up to safeguard assets and customer service, how to implement the appropriate protocols to maintain compliance and how to improve inventory processes to increase margins. Executives call about inventory-related topics quite frequently. Boards make it a priority. For example, corporate of one of my current clients (a facility of a multi-billion-dollar aerospace manufacturing company) has made it a top priority. Certainly none of these people think it is humdrum!


Are you leaving your inventory processes to an analyst on his/her own? Shouldn't you be asking questions and expressing interest in the metrics? Do you know what's going on with inventory on a weekly basis? We've been consulting for over 11 years as of last month, and 95%+ of our clients asked for or ended up requesting support to improve some aspect of their inventory. It does seem to be a no-brainer since it is a great way to make quick progress with and improve service, margins and cash flow.

Our marketing colleagues call these sorts of timeless topics "evergreen". Think about all the impacts to your business stemming from inventory. We have no doubt it will spur you to go ask a few questions at a minimum. As this is one of our strongest areas of expertise and we enjoy seeing the deep impact and benefits to businesses, we have decided to offer a summer 2016 special (July & August) for Profit through People newsletter subscribers - a Rapid Inventory Management Assessment for $5000. To sweeten the deal (as we prefer to ensure results follow), we'll rebate this assessment fee against any resulting (follow-on) inventory projects. If you are interested in getting started,
contact us



Did you like this article? Continue reading on how to be the Strongest Link in your organization:


Is Your Inventory System Working?


Is Your Supply Chain Ready for Growth?

globalbusiness.jpgSince we are a more inter-connected world that ever before, the interest in global continues to rise. This does NOT mean that more manufacturers are outsourcing as the opposite is the current trend; however, companies need to be aware of the impacts of global – and so their interest in global is on the rise!


There are also more terrorist attacks than ever before, and so of course, people are more interested in what’s going on in the world. To some degree, people are less likely to travel the world yet they are more interested in what’s going on around the world. On the other hand, I just got back from Australia and New Zealand – seeing the Great Barrier Reef and Sydney’s elaborate ferry system is quite different from reading about them. Traveling in a smart way can still open doors and build relationships.


News gets out almost immediately with instantaneous communications and social media. For the most part, there is no time to put a spin on information as someone already has filmed it. In some respects, it has made it a more transparent world – and drives more interest. For executives, they have to be concerned about where their people, plants, suppliers and customers are located as it will certainly have an impact on their business.  Do you even know what your footprint looks like?


In today’s Amazon-impacted world, people expect immediate access to the products and services they desire yet they also want the lowest cost. It doesn’t matter where it comes from as the world is our oyster; however, when thinking about how to deliver rapidly with less cost, less cash tied up in intransit inventory and higher quality, it makes for an interesting – and challenging – equation. A comprehensive view must be taken inclusive of taxes, transit times, risks and the like.


The bottom line is that executives have no choice but to pay attention to the world if they want to thrive. The key is to find a way to stay on top of the trends, likely impacts and opportunities out there. How are you building this critical aspect into your career and your business viewpoint?


Did you like this article? Continue reading on how to strengthen your Eagle Eye:

The Impact of China’s Slowdown

The Hidden Benefit of Observation


I met with an good friend and former colleague last night. I've made many mistakes over the years (who hasn't?) but one thing I've done well is to stay in touch with TOP NOTCH people. After all, people are the 80/20 of success. Thus, although we haven't worked together in 16 years, we have stayed in close touch and compared war stories along the way. We both focus at least partly on ERP projects.  I'm an expert in ERP selection and design (check out my related proprietary process ACE to learn more), and she is an expert in Oracle and ERP applications and implementation. Thus, there is always ample room for animated conversations. 


We both have come to the conclusion that although ERP can provide DRAMATIC results for the right client at the right time with the right software and especially the right people, it will require hard work and there will be obstacles to overcome. Thus, it is best to be aware of this up front and plan accordingly so that you become one of the success stories. There are secrets to success; however, these secrets are not "magic weapons" - there is no avoiding focused, detailed work yet it will pay off in the end.  



One tip to implement this week:

If there was ever a subject that couldn't be impacted in a week, it is ERP. With that said, I take that as a challenge and have come up with action items:


If you are thinking about upgrading your ERP system, do your homework up front. Do not jump into the "fun part" of evaluating softwares right away. Start with your business requirements. What do you need your system to support to be successful? Bells and whistles will not grow the business and increase your profitability; however, key functionality tailored to your needs will!


If you are in process with ERP, don't panic! Take a step back and make sure you have your "A" team focused on this topic as it will have a significant impact on your business - and it is best to make sure it will be positive instead of disruptive! Start with your internal team. Then, move on from there.... Do you have strong (and only the best) support team members from your software supplier, experts in process and systems etc.? Don't move on until this is addressed.



Looking for more ideas to keep your supply chain connected? Access more tips and resources on my blog. And keep connected by subscribing to my newsletter and email feed of “I’ve Been Thinking…”


Global Is "In"

Posted by lisaanderson Jul 5, 2016

profitthrupeople.jpgOne of the reasons my global advisory board has been as valuable as its been is because it is global. We have people from the U.S., Australia and Japan with experiences from all around the world, and we are supported by a wider community with people from almost every continent. Looking through a U.S. lens might seem expansive to someone who has spent his/her lifetime in one state or on the east coast or the west coast yet it is narrow as compared to global impacts surrounding business on a daily basis.


No matter what you think in terms of politics and the like, it is imperative that you understand global impacts. For example, with the China struggles going on earlier this year, manufacturers should be on high alert for future quality issues. Have you been considering that? When I was in Australia for my strategy session, we discussed the impact of the strong U.S. dollar. Certainly it made my trip less expensive; however, it has far reaching impacts. Which countries should companies source from? Should they hedge? Should they in-source? There are vast numbers of questions to think about.


Within the last week, Europe has certainly had a strong impact on not only the stock markets but the global economy. What will Brexit mean? What decisions should companies be making now for impacts that will occur within the next 1-5 years? How should they mitigate risk?


The Olympics is another global topic. The Zika virus has certainly impacted attendance. How will companies protect their employees? Are athletes willing to take the risk? Money was poured into preparation for the Olypmic games. What will happen if it falls short?


It doesn't matter what you think about globalization. It is all around us. The only question is whether you'll be prepared and thinking ahead on how to best prepare and leverage for likely global impacts.

Did you like this article? Continue reading on how to strengthen your Eagle Eye:


The Impact of China's Slowdown


The Hidden Benefit of Observation