Skip navigation
2017

Internet of Things (IoT) is trending in supply chain circles. A buzz has started. According to a recent article on Kinaxis, IoT has nearly taken hold of every aspect of our lives. Can you believe there will be over 6 billion connected devices by next year? And that number is projected to increase to 20 billion by 2020. Watch out! A key question is whether we are ready for the stream of data coming from these devices and how we'll handle it (and leverage it) in supply chain planning processes. For example, just think of the power of a simple Amazon dash button. It is mind boggling to consider the impact of the amount of data, what the data will be able to do and the risks inherent with this data.

 

Internet of Things (IoT) is Trending in Supply Chain

What Should We Consider and/or What Impacts Could Arise?

The internet of things is bound to have a dramatic impact on every business. The possibilities are endless... Smart appliances will change the way we shop, handle typical repairs and much more. Smart cars are already starting to transform our lives. Even my mom said tonight that she sees value in an alarm system that would lock the door from afar. There are almost limitless possibilities. 

 
All of these collect data. Imagine how this data could transform your supply chain planning process! If you know real-time what is most popular and what is needed, could you be more responsive to your customers? Better yet, could you be in front of your customers with value-added suggestions? What could that mean for your customer experiences and revenue growth? The bottom line is that this topic is definitely one to add to your strategic discussions, whether to figure out how to incorporate IoT with your products or how to proactively respond to what will be coming down the pike in the future.

business intelligenceTechnology is a hot topic. Artificial intelligence. Autonomous vehicles. 3D printers and additive manufacturing. Business intelligence. We can't stop talking about it. Many times, these topics are somewhat like fads. Even though there are benefits, we can get carried away and not even pay attention to whether we are gaining value.

 

Thus, we should take a step back and ask a few questions:

 

1.  Do we need the technology or is it just cool?

 

2.  What value does the technology provide? Does it yield a return on investment? What is that return on investment?

 

3. What is most valued by our customers? Time? Price? Features? Services? Which technology best aligns with their needs?

 

4. Is the technology supporting the business goals or are the —business goals supporting the technology? Which is your lead for your conversations?

 

5.  Are you caught up in bells and whistles or focused on value? 

 

6.  Are you leading with tech or with the customer experience? 

 

7.  What do your customers expect? Can you leverage automation for a win-win?

 

 

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

Technologies Transforming Supply Chains

What’s Important in Technology

 

Last week, I went to Rhode Island to meet with my global strategy group. It is simply amazing how a change of scenery can achieve wonders when it comes to emptying the mind so that strategic thoughts can enter. I haven't spent time in Providence and East Greenwich previously and both are starkly different from Southern CA. Providence is one of the oldest cities in the U.S., and home to Brown University and the Rhode Island School of Design (pictured below) whereas East Greenwich is hard to beat when it comes to charm and food. Do you get away to empty your mind?

 

work environment

One tip to implement this week:

 

Are you thinking about your environment when it comes to strategic thinking? I cannot tell you how many of my clients have strategy sessions in the conference room with employees interrupting to ask about key customer shipments, Board member calls or the like. How conducive is that to strategic thinking? Think about your environment overall — if the people are negative, do you start to feel more negative? And how about if they are optimistic? Where are you spending your time?

 

With that said, you don't have to get away to Rhode Island or another place equally different from where you typically work to immerse yourself in a different environment. In Southern CA, there are so many different environments, we wouldn't even have to leave the state — mountains, beaches, cities, deserts, Sequoias, and more. Or, you could even go to a local restaurant or hotel to get away from the day-to-day grind. Start by remembering that your environment is an integral element to your ability to think and to be comfortable and confident (just think about speaking), and be more deliberate about your environment.

 

 

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…”

Samsung announced that it is expanding manufacturing operations and its commitment to American consumers, engineers and innovators. They are putting money where their mouth is by investing $380 million with the plan to hire 1,000 workers for this new state-of-the-art facility that will manufacture appliances. This facility will take over manufacturing being done in Mexico. In this case, near-sourcing to customers in Mexico isn't enough; they want to be even closer to customers, engineers and innovators!

 

U.S. manufacturing

Manufacturing in the U.S. AND locating manufacturing to the U.S. is making sense! In Samsung's case, there is a commitment to sourcing and collaborating closely with the customer in combination with incentives to relocate. Similarly, bicycle producer Kent International is re-shoring. In addition to the critical nature of customer proximity, offshoring costs were rising significantly (materials, labor, transportation and currency); thus, Kent decided to commit to an expansion of manufacturing in the U.S. Are you keeping an eye on your customers, costs and cash flow?

 

What Should We Consider and/or What Impacts Could Arise?

 

Samsung and Kent International are two examples of firms leading the way with a commitment to manufacturing and the U.S. How often are you re-evaluating your strategy and keeping a pulse on your strategy? A once-a-year review no longer suffices! Similarly, a 5-year strategic plan is a waste of energy in most cases. Does anyone know what will occur 5 years out that prohibits making strategy an ongoing priority?! 


In addition, manufacturing is definitely on the rise! With that said, let's not assume it will return fully to the "glory days" and start overreacting in the opposite direction. For example, folks outsourced because it was popular at time (sometimes with only a cursory review), whether or not it actually made sense from a total cost AND total customer experience perspective. As the U.S. and individual states become more competitive and technology and automation continues to evolve, change will occur. Don't be caught off guard — what impacts will these changes have on your business? Are you prepared for them — or, better yet, are you in front of them so you can be proactive instead of reactive?

 

deliveryIn today's Amazon-impacted world, we believe in instantaneous delivery. It has become an expectation. Even my mom who orders on Amazon by calling me believes a two-day delivery is a bit long. After all, she might not realize she needs something until the last minute. Thus, which is more important - time or money?

 

Here are a few questions to ponder when thinking about time vs. money:

 

1. Do you expect rapid deliveries across the board? 


2. Are you willing to spend extra money for speed? Are your customers? Do you know this answer or are you guessing?


3. How important is cash flow to your business? How long is your supply chain? Regardless of how well inventory is managed, how much will be tied up by virtue of your supply chain design? How does that compare with delivery expectations?

 

4. Have you thought about investing in your demand plan instead of into inventory to be better prepared to deliver quickly without sinking cash into what is likely to become slow moving inventory?

 

5. Have you thought about investing money into strategically placed inventory? Having what your customer needs when they need it might be the difference between success and failure.

 

6. In your business, can you have time AND money?

 

7. What other types of time and money are you overlooking?  Get the full picture before jumping in.

 

 

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

 

Slashing Lead Times to Counter the 'Amazon Effect'

Lean or No Lean, a Demand Plan is a Must

 

Last week, my brothers and nephew were in town for a vacation around Southern CA. One of our stops was Disneyland, and my brother Brian purchased lunch tickets that enabled us to have good seats for Disney's Main Street Electrical Parade. It has always been my favorite since my first trip to Disneyland on a family road trip from Chicago across country when I was quite young. See below.... how could it not be your favorite?

 

timeless experiences

Disney did a fabulous job of putting this together. They go the extra mile for the "little touches" that make the difference. In this case, I love the music that accompanies the parade. Of course, they have people, bugs, magic dragons (another favorite), and firework displays that go by in an amazing experience. That's why people "camp out" for a few hours to get a good seat! I remember doing that with my parents, and my dad would get us snacks to pass the time while we waited. 

 

Disneyland has retired this parade several times but it is a timeless classic that keeps coming back (thank goodness). What amazing timeless experiences are you creating for your customers and employees?

 

One tip to implement this week:

 

What type of experience would keep your customers coming back — and even standing in line to partner with you? An intriguing question.....  Even better, what would keep your employees engaged? Have you ever seen happy customers with unhappy employees? Me either!

 

So, don't worry about creating a Disney experience on day one; however, take some time to think about how to create compelling customer and employee experiences. Ask for input. However, I've found it is usually hard for people to articulate what they want before they experience something like it. For example, I never would have thought I needed to see a Main Street Electrical Parade — until I saw it. Thus, ask questions about what is important to your customers and employees. Understanding what is important will help you think of experiences that will matter to them. Brainstorm. I have no doubt my favorite parade wasn't a one-person creation!

 

 

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…”

 

Amazon hit the news big time with the purchase of Whole Foods. It even got my mom's attention, and she asked the store manager if they would continue to exist. He assured her that they planned to stay.

 

It just so happens that I spoke on the Amazon Effect at the Future Ports Annual Conference and at an IOT (internet of things)/ Supply Chain Data event almost immediately after the announcement. We had some fascinating discussions at the IOT event about Amazon and their strategy and impacts. Certainly this move will shake up traditional retail grocery stores! Are you thinking about the impacts of Amazon Fresh, whether it seems to relate or NOT to your industry? You should!

 

Amazon buys Whole Foods

What Should We Consider and/or What Impacts Could Arise?

 

Amazon is continually innovative and surprising us with a fresh look at old topics. I think they saw the opportunity with Whole Foods to gain a footprint not just in grocery retail but also with a trendy, organic store that could benefit from lower prices and fresh ideas. Why not deliver items that make sense (taking advantage of their vast network) and gain a footprint in addition to serving those customers who would like to pick out their own bread and meat?

 

We should all take a lesson from Amazon's playbook to look for opportunities where others don't. What is someone trying to dump or sees as a nuisance that might be a gem for you?

On the other side of things, we should definitely be on the lookout for the continual radical change of retail, now extending to grocery as well. It is bound to have implications on commercial space, transportation networks, and the like. What do you think will change about the footprint of Whole Foods and commercial space? Will it become mixed use? We had some fascinating discussion in my presentation on the Amazon Effect. The bottom line is as follows — at a minimum, kick start your thinking or you'll be left in the dust. After all, Sears Roebuck was Amazon before Amazon existed....

 

forecastingWhether setting strategy or designing a SIOP (sales, inventory and operations planning) process, one of the most important questions to consider in forecasting is how far into the future will you look? And why?

As we think about whether the answer should be 1 month, 1 quarter or 1 year, check your thinking. When assessing the future it is important to think through the elements that may impact your forecast.

10 Questions to Ask When Forecasting and Designing SIOP

 

1. Do you have customer contracts in your business/ industry? If so, how far out do they go?

2. Regardless of the commitment level, how far out do you have information that is somewhat reliable? If it changes substantially from month-to-month, is it of any value?

3. How reliable is your forecast by product or customer grouping? Forget about items and sku-level forecasts. How about product category forecasts?

4. Do you have access to demand data into your supply chain?

5. Are you asking questions about what is coming down the pike? If not, why not?

6. How much cushion do you have? Do you have inventory or capacity availability?

7. How prepared is your supply chain? Can they handle volume spikes?

8. Are you willing to dedicate people to gain a view into the future? Why or why not?

9. Have you considered a strategic sprint? Why are you setting arbitrary time frames when customers don’t care what you do? They want what they need when they need it.

10. Are there downsides to looking too far into the future? What are they?

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

Forecasts Are Always Wrong So Why Bother?

4 Excel for SIOP Success

 

Autonomous vehicles seem to arise at every corner. Last week, I heard a presentation on autonomous vehicles by the executive VP of Hyundai, and earlier this week, I participated on a panel at Future Ports Annual Conference with a Caltrans researcher on autonomous vehicles. What is clear is that self-driving cars are going to occur. There is substantial testing, money and efforts going into the development of autonomous vehicles. Amazon, Uber, UPS....all the big names are investing. Certainly, this new technology will revolutionize the trucking and transportation industry.

 

self-driven cars

What Should We Consider and/or What Impacts Could Arise?

 

Start by not burying your head in the sand. Although there are certainly bumps in the road, there is an amazing amount of investment and effort going into autonomous vehic

les. The bugs will be worked out eventually. Thus, start thinking about the potential impacts on your industry, your company and your career.


The positive news is that self-driven vehicles will undoubtedly reduce traffic deaths. As they get closer to practicality, the transportation landscape will change. The truck driver shortage may not matter. The amount of time a truck driver can drive at once to avoid getting tired won't matter anymore. This will speed up transit times. There will also be radical implications on industries and companies. Do you know whether you are likely to become a

winner or loser in this reality? What should you be doing to come out on the winning side? There will also be substantial infrastructure and legal changes. Changes abound. Start by taking stock of how autonomous vehicles are likely to impact you.