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Why Customers Rule

Posted by lisaanderson Sep 28, 2016

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Last weekend, I attended APICS 2016 in Washington DC, and one of the keynote speakers was Bill McDermott, SAP's CEO (pictured below with Abe, APICS's CEO). He gave a motivating talk about a variety of topics. One of the key themes is that customers (consumers) rule! And, if you think about it, one set of customers includes your employees. Thus, you need to know what both think and want!Bill McDermot SAP CEO.jpg

 

One of his stories from his younger career is when he was sent to lead the worst performing division of Xerox. Listening to his employees and customers turned it from last to first in one year. Talk about powerful!

 

In essence, all businesses should be concerned about what their customers - both up and down the supply chain (including consumers) — want. The better understanding you have of demand, the more successful you'll be in exceeding expectations — with the opportunity to do so at the lowest cost, driving win-win profit.

 

One tip to implement this week:

So, this week, start asking your customers and employees what is important to them. You might not even have to open your mouth — start listening to what is said AND what isn't said. I guarantee you will learn something new that could prove invaluable. Look for win-win opportunities. How can you make sure they become raving fans without spending a dime? 

 

Once you talk with a group of customers, look for trends. What do you see and hear? And, how about your employees (and peers)? I've yet to meet a client with happy customers and unhappy employees. What does that tell you?

 

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…”

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Last week, Kash Gokli (the head of Harvey Mudd's manufacturing program) and I facilitated our Harvey Mudd executive roundtable discussion with executives of Southern California on just this topic. According to best practices, your new product sales should become 30% of total sales within 2-3 years. This seems like a tall order!

 

Let's assume you achieve these goals. Just from the numbers standpoint, it will not work if you wait too long! You need to be developing products BEFORE your current products are in maturity and start their downward trend. And, certainly, it is rare for anyone to have only success along the way in product development; thus, it is prudent to start early and expect failures along the road to success.

 

One tip to implement this week:

 

So, I bet you are wondering what could possibly be done this week. I wondered that too until thinking a bit further. There is actually quite a lot that could be accomplished in a week. Get a cross-functional team together to discuss your products and services. Think about where they are in the cycle. Are any getting close to maturity? How are they performing? Do you know the market needs? By understanding these answers, you'll know where to start.

 

If you are already in a product development cycle, take a step back to think about whether you think achieving 30% of total sales within 3 years is feasible. What can you do to strengthen your possibility of achieving this objective? Who should you involve? Do you feel confident that your customers are on board? Put a team together to ensure success.

 

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_102474785_XS.jpgNo matter the topic of your project, it will be more successful if the project leader utilizes winning leadership traits. As our HR mentor used to say, “It begins and ends with people!”

 

Therefore, leadership is the name of the game, assuming you want to win the game. In project management, this is even more critical because most project teams are groups of cross-functional resources who do not report to the same line manager. Thus, the project leader has to use influence leadership in addition to command and control leadership. Actually, command and control leadership doesn’t even work long-term for those who are “the top dog”; thus, these traits are even more important to learn.

 

Although there are countless traits that go into being an effective leader, these are the ones I’ve seen the best leaders across our clients employ:

 

1. Demonstrates Passion

Even the most exciting of topics can become humdrum if the leader doesn’t show passion. Each project team member is typically working outside of their typical routine. Often, the project leader cannot significantly impact the employee’s pay or bonus. Thus, passion becomes even more important. If the leader is excited about the results that can be achieved, each team member is likely to become excited as well.

 

For example, when I was a VP of Operations and Supply Chain, our CEO was passionate about what we could achieve with new products, reduced costs, new markets and the like. At the time, I was responsible for a cross-functional team in the thick of whether we’d achieve these lofty goals. We had barely avoided bankruptcy and had to work long hours just to keep things going. Without his passion for these topics, it is likely we would have lost motivation as well. We knew there were no bonuses or raises until we got the ship turned around which wouldn’t happen overnight. What kept me from leaving was his passion and excitement about the future – and my contributions to it. Don’t underestimate the importance of passion.

 

2. Creates A Vision

Although passion is important, it cannot be successful without going hand in hand with the vision. Executives with passion but without vision are just seen as aimless and not worthy of following. Since leaders should forge the way, this trait is rather essential. Create a vision of where you are going and why.

 

In my last example, the CEO created a vision of being the best provider of incontinence care. Think about what type of diaper you’d want your Grandma to use. One that was absorbent and made her feel better and almost like she wasn’t wearing a pull-up or diaper or a leaky, inexpensive one. At the same time, since it is your Grandma, how much do we want her to pay for this pull-up? Perhaps we should find a way to make it better yet cost less for her. Now we are talking.

 

3. Focuses On the Critical Path

When it comes to projects, it is easy to work hard yet not get far. There are always hundreds of tasks that need to be completed. People to appease. How do we accomplish this with a part-time, cross-functional team of people who report to different leaders? Spend the time upfront to put together the project plan so that you can focus the 80/20 of your energy on just the critical path. Instead of wasting time following up on every task, follow up on just those on the critical path. These are the ones that will keep the most important elements going.

For example, in the cross-functional team that had to redesign the incontinence product so that it would perform better while cost less, there were countless tasks involving not only every department but also customers, suppliers and other partners. Since we had a small team (certainly not adding people, following a near escape from bankruptcy), we had to work smarter; not harder. Thus, we focused in on just the critical path. If these tasks didn’t get accomplished, the rest wouldn’t matter. You had to finish or at least make progress on these tasks in order for the next critical path task to be accomplished successfully. When we used extra resources, we focused them on the critical path. If we invested money, we would focus it on the critical path. The rest would have to sink or swim on its own. The bottom line was to focus on priorities.

 

Since no executive or project team has extra time, money or resources, we must make good use of what we have to ensure success. And, since leadership is the 80/20 of success, it has proven successful to focus in on creating, nurturing and encouraging winning leadership traits in our project managers. Give these a try and let me know how it goes.

 

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

 

Leadership’s Unsung Heroes

 

Cross-Functional Success

systems diagram.jpgFrom time to time, we receive a call from a client dealing with a challenged ERP implementation. Unfortunately, "challenged" is a nice word for most of these! Of course, by the time the client calls, they have spent a lot of money and are frustrated which isn't a great starting point because unscrambling the situation is never an easy endeavor — assuming you want to provide service and make money.

Unscrambling these scenarios requires a unique combination of skills:

  1. System thinking - as odd as it sounds, there is NOT a need for experience in the specific system. Certainly, it might add value but the most important skill is system thinking — connecting the dots in terms of how systems work, down-the-line impacts, how they'll integrate with other process steps etc.
  2. Business process expertise - we find that this is a critical component. There are always several ways to perform a certain role or accomplish a task. Some of the ways will create positive down-the-line impacts while accomplishing your goal and some will work perfectly well for you (and might even be faster) but will create negative down-the-line impacts. The complication is that no documentation will tell you about these. This is where having "been there and done that" with multiple systems and process combinations is required.
  3. Timing/sequencing - even if you have good system thinking and good process expertise, if you don't "see" the various outcomes with different sequences and timing impacts, you'll still end up in a jumble. 
  4. Project management expertise - unscrambling several moving parts requires a deep project management expertise. Organizing and tracking several moving parts and related impacts (prerequisite steps, concurrent steps, etc.) requires a skill in project management.
  5. Relationships/communication - one would think we are asking for too much when we throw this topic into the mix but it is a key component. Often, there will be some technical capability required to resolve certain aspects. Thus, communicating effectively across applications and technical capabilities is a must. Additionally, your ERP and system partners (or lack thereof) might need to be addressed, improved and/or changed out. After all the frustration already incurred, it is essential to know quality resources.
  6. Training/application understanding - this is an easy one to outsource once you know what is needed. Our clients typically think it is #1 yet it is the least critical aspect. Once the solution is known, it is easy to provide training.

 

Yes, it is one of those situations where there are no easy solutions. The fix itself could seem simple yet putting together a plan and executing the plan will turn complex. Our best advice is to take a step back and assess your situation. After spending a lot of money (that has become a sunk cost), the key will be to remain focused on what the best long-term solution will be to maintain and grow your business successfully. It will require more money than you hoped but you'll "right the ship" so that you have a sustainable solution.

 

As an aside, if you happen to employ resources with many of these skills, hang on to them. Follow the advice of one of my best clients who hired top notch engineers during the recession when he didn't need them. He now has them and will sail past his competition.

 

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

 

How Challenging ERP Can Be!

 

The Value of CRM

 

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I've been spending the majority of my time this week with two clients: one is preparing to go live on a new ERP system and the other is working to improve service levels by implementing improved planning and order flow processes. Although these specific objectives are nothing alike, they have much in common. Both have countless numbers of small issues arise on a daily basis — and some quite large ones thrown into the mix. It is just the nature of the beast in manufacturing environments. And so we need to uncover the root cause of the preponderance of the issues instead of playing the blame game!

 

Unfortunately, many of my clients are hard wired to worry about the blame game and related politics. Imagine how much quicker and better progress could be made if we focused on the root cause. Rarely if ever is that root cause due to a specific person. Instead, the likely categories include (in lean terms): method (process), machines, manpower (resource shortage, skills shortage, etc.), and material. If we think about our issues from this point-of-view, suddenly, we aren't attacking each other; we are attacking the problem jointly. 

 

And, I'd like to state boldly that it makes no difference if you are in a lean environment or whether you agree with lean principles. It is just common sense to just think of categories of causes unrelated to blaming specific people!

 

One tip to implement this week:

 

The good news is that there is VAST progress that can be made in a week. Simply stop blaming people. Instead, think about the root cause. Even if you think it comes back to a person, look for every other potential cause that could help that person be successful. If they had a new process and were trained on the new process, could they perform the job? If they were overloaded, would he/she have made the mistake? 

 

Practice talking in these terms. Instead of complaining about Mary or Steve, how could you re-phrase your concern into a productive conversation? Hold off until you've thought about it. At a minimum, I bet you'll waste less time.

 

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…”

lisa headshot.jpgLisa Anderson MBA, CSCP, president of LMA Consulting Group, was selected to participate in The Toyota Women in Supply Chain Mentoring Program sponsored by the Toyota Foundation and The Peter F. Drucker Center for Supply Chain & Logistics, Claremont Colleges. Anderson, a sought after speaker on supply chain, customer service, skills gap, ERP, SIOP, and the Amazon Effect and its impact on business operations of manufacturers and distributors, will mentor a student and help her be ‘economy-ready,’ understanding the people, process, strategy, structure and technology involved in Global Supply Chain Operations.

 

Anderson is board approved in supply chain strategy, an advisory board member for the Advanced Supply Chain Certification program, and was named a top 100 supply chain blogger on SupplyChainOpz. Recognized as the 16th most influential person in supply chain management and sustainability by technology leader SAP’s “Top 46 Resource and Optimizations Influencers (Plus a Few Others),” she retains Pomona College interns to help them gain valuable experience, co-chairs the APICS West Coast Student Case Competition and sponsors student participation in APICS-IE.

“I remember coming out of college and having to do a lot of learning on the job,” explains LMA Consulting President Lisa Anderson. “I’ve been fortunate to have several wonderful mentors who helped me navigate the “real business world” and apply what I learned in school to drive business results. Without a doubt, I wouldn’t be where I am today without them. Thus, I’d like to pass on the same type of knowledge to my mentees.”

 

“Supply chains have become substantially more complex over the last several years. For example, supply chains have extended (with many more players involved), natural disasters have created customer disruption, security threats are commonplace and Amazon has driven elevated customer expectations which have created a supply chain skills gap. There has never been a better time for women to rise to the occasion. I find vast talent in young women. With a bit of mentoring, they can thrive, fill critical gaps in organizations and develop rewarding careers in supply chain management.

 

Celebrating its 11th year, LMA Consulting Group helps growing companies elevate overall business performance while creating a customer service edge. Through a number of proven proprietary processes, LMA Consulting Group can pinpoint areas for improvement with eagle eye precision and develop the strategies to deliver results. Anderson, also known as The Manufacturing ConnectorSM, is currently working on a book entitled “The Amazon Effect” detailing a business roadmap to thriving in an ultra-competitive marketplace. A regular content contributor in topics including supply chain, ERP and SIOP, she has been interviewed for articles in publications like Industry Week, tED Magazine and the Wall Street Journal. She actively posts educational blogs three times weekly and has two newsletters, Profit through PeopleSM and “I’ve Been Thinking.” For information about Lisa Anderson, go to http://www.lma-consultinggroup.com/ or call 909.630.3943.

Fotolia_102302343_XS.jpgAlthough working cross-functionally is a basic tenet in every organization we’ve ever seen, it remains elusive to many. Certainly the topic arises frequently no matter what product or service is offered as coordination is required to conduct business.

 

For example, we are working with a company to prepare for go-live, and the most challenging aspect lately has been to get every functional area to work in concert with each other within the order fulfillment process. Unfortunately, it requires more than simple coordination, although that alone would be a start in many organizations. In our case, as errors arise (which is a common occurrence as you work through go-live complications and education), the level of coordination must increase. In order to problem-solve across several functions, the level of coordination and communication must increase. As soon as we all get in the same room, the system miraculously starts working again. Obviously, no company has every employee sitting in the same room; therefore, cross-functional coordination is vital to success.

 

Simple communication and coordination techniques can go a long way. Listen. Ask clarifying questions. Overcommunicate. Typically, varying communication methods can be helpful. Not everyone absorbs the same way and so using different mediums can be helpful. Repeat back and confirm. Be open to suggestions. Think about the most effective communication for the other person; not for you. Start with these simple techniques and you’ll build a base. Then, advanced techniques will be required to go further. For example, aligning goals might be needed to achieve success.

 

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

 

Success with Cross-Functional Integration

 

The Value of Clear Communication

at your service.jpgAlthough we work on many topics impacting manufacturers and distributors, we have found that the most popular — and vital — is customer service. Prior to the recession, most companies called for our inventory management expertise and how to understand and manage costs (and therefore strategically price); however, since the recession, almost everyone that calls has some element of the customer in their conversation.

As our passion surrounds customer service which must start with your customers (your employees), we love this development. From a financial point-of-view, the customer has a profound impact on business performance. Clients call for every one of these reasons:

  • Business growth - certainly, you have no hope of growing your business unless you serve your customers well. Specifically, in today's Amazon-impacted world, it must be an assumption.
  • Delivery performance - unfortunately, there are a vast number of ways companies can get into trouble with delivery performance. There has to be at least 20 different processes that impact whether product and services will be delivered in a timely basis. And, that is before you talk about people and culture.... If you cannot deliver on time, not only will you incur extra costs in expediting but you'll lose orders (perhaps even ones you don't know about).
  • Lead Times - every client talks about lead times. Customers are demanding a 50% reduction in lead times. Shortening the cycle translates to money and cash flow.
  • Value-added service - we must stand out from the crowd with exceptional service — forget about growing the business, this is essential to MAINTAIN the business (and to have a decent work life). How are you adding value for your customers? It is not all about price! Do you provide service options? Do you provide value add ideas and options? When my laptop crashed, I was very interested in those companies that would expedite, no matter the fee.
  • Margins & profit - do you look at service with a win-win eye? You better start! No one can afford win-lose propositions any longer. Find a way to increase your customers' profits while increasing yours.
  • Cash flow - an area tied directly to service is inventory positioning and levels. If you can count on high levels of service, you won't need to carry as much inventory. Every dollar not tied up in your warehouse is a dollar you can invest into the business, your people and your life.
  • Controlling overhead costs - This might sound strange but it frequently arises. If you need to upgrade your infrastructure as business grows and/or complexity increases, a compelling reason not to ignore this need is customer service. For example, if you have an ERP system that is highly customized and no longer will expand with your business, it will result in customer service challenges. Of course, most clients will attempt to address these issues without impacting customers. Since their business isn't scalable, they will have to employ people to fill the gap. And, instead of automating these tasks, the manual workload increases errors — impacting service levels.

Clearly, customer service should rise to the top of your list in terms of priorities — assuming you want to maintain and grow your business and/or would like to enjoy your work life. What programs are you pursuing to take your service to an entirely new level? What ideas do you have to take a leap forward? 

       

 

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

 

Staples and the Power of Customer Service

 

Is Your Supply Chain Ready for Growth?

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With the reboot of MacGyver starting this fall, it reminds me of one of the strategies behind my success — leverage already-existing assets to deliver results. Coincidentally, over Labor Day weekend, I went to Santa Barbara and stayed at the Fess Parker Resort by Doubletree. Of course, it has stunning views of the ocean. One of the guests told me about the story of their restaurant and wedding area — the Roundhouse. It symbolizes the historic railroad roundhouse that once stood on the site (see below). And, they have made it into a popular wedding & party destination today. It is one of the only places I've posted on Facebook where I received several comments from folks solely about the hotel.

 

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One tip to implement this week:

 

So, how can we be innovative and use what we have in new ways to create success? When I was a VP of Operations & Supply Chain for a mid-market manufacturer, we were rebuilding after narrowly avoiding bankruptcy following a cash-consuming merger and ERP implementation. Thus, we didn't have money to spend yet we had to find ways to become even more competitive to grow our business while reducing our cost base. This strategy came in quite handy!

 

The best approach for this week is to take a step back and assess your situation. What priorities exist? Choose one and think about strategies to leverage already-existing people, materials, systems, etc. to improve your situation. What can you do to take a few steps forward without going for more approvals (that will take longer than the week to achieve), spending unnecessary money, and the like? I've yet to find a situation that had zero room for improvement with already-existing assets. Ask your trusted colleagues for ideas. Set aside time to brainstorm. You'll come up with ideas.

 

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…”

budget binder.jpgAs we brainstormed our unique value proposition with our advisory board and marketing team, the topic of financial acumen rose to the surface. Traditionally, we've talked about people, processes and systems and how our unique combination of these elements delivers superior business performance; however, this statement failed to include a vital element of our success — financial acumen.

 

When I was a VP of Operations and Supply Chain, we constantly were pursuing how to reduce costs while improving the performance of the product and service to our customers. Understanding how to get to true costs — not double or triple counting cost improvement programs isn't as easy as it seems like it would be. Costs are also critical for thinking strategically about pricing, what focus to put on certain products or customers, etc.

 

Thus, having this financial acumen is essential and noteworthy. Fortunately for me, I had a finance mentor early in my career path; thus, I decided to get an MBA with an emphasis in Finance. Of course, although quite valuable, I learned 100 times more from a Finance Director who worked for me later in my career. He was invaluable because he knew costs, how to analyze capital investments, and what was important when it came to variances, contribution margins and cash flow. What else could you want in a superhero? Thanks, Marty!

 

Thus, we have evolved this unique formula to the "right" combination of people (culture, change, leadership, etc.), processes and protocols (inclusive of systems, finance, etc.) — and it has a great alliteration of P's to boot!

 

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

 

Lessons from My Finance Mentor: How to Turn a Profit

 

Are You Working on the Right Priorities?

 

wsj.jpgSupply chain risk has increased exponentially over the last several years. Mother nature is unpredictable which is the antithesis of what the supply chain needs to perform predictably and profitably. For example, the California wildfires created a logistical nightmare – trucks were parked along the 15 freeway, rail cars were stacked up and being re-routed as best as possible, trucks in and out of Southern California were affected and even the ports were impacted. I was asked to comment about the fire in a Wall Street Journal article. This occurrence was not an isolated incident. There are almost too many examples to choose from; however, one that pops to mind is the Japan earthquake. It sent ripples throughout the world in supply chain disruption. In the U.S., hurricanes, tornadoes and floods can have a dramatic impact. Certainly everyone remembers the impact of Hurricane Katrina. And this doesn’t even begin to address other supply chain risks such as the port strikes and political unrest.

 

Successful executives will not hide their heads under a rock! Instead, executives will incorporate these risks into their strategic plans and risk analyses. Some of this is uncommon common sense. If you have a key supplier located in a hurricane zone, you should develop a backup. If you want to make sure supply will remain largely uninterrupted, it will require ongoing relationships with multiple suppliers. You can also work with your suppliers to strategically position inventory. There are a host of options. The bottom line is that pre-planning will work. Panic after an event will just create unhappy customers and give your competition a definite advantage.

 

Did you like this article? Continue reading on how to Profit Through People and join me in my appreciation of the people who have helped LMA Consulting Group to continue to grow.

 

Why Care About Supply Chain Risk?

 

SIOP beyond Borders