Prescient Strategy & Manufacturing Resilience Using SIOP (S&OP)

To thrive post COVID, manufacturing resilience will be cornerstone. Customers expect personalization, customization, and rapid deliveries without disruption, and they will change suppliers, substitute products and do whatever is required to satisfy their customers or get what’s needed. For example, although the preference is for online purchasing, consumers will return to stores to ensure quick, reliable supply of critical items. If your dog likes a particular brand of food, you will figure out how to get it or something similar. At the other end of the spectrum, manufacturers are paying more to source key materials with reliable suppliers and/or source alternates that will enable growth.

The Need for Manufacturing Resilience

To support customer needs and revenue opportunities, manufacturing resilience will be essential. The pandemic has uncovered deep seated issues with the status quo. Waiting for whatever steps are required to deliver and service the customer to include possible activities of quoting, design, engineering, customization, production (including having the appropriate materials in the ‘right’ place at the ‘right’ time), assembly, quality control, shipping, installation, etc. is unacceptable. Changing conditions will be commonplace, and if you don’t develop resiliency, your competition will.

What is Manufacturing Resilience

Our most successful clients are building manufacturing resilience. As customers needs evolve, they will have the foresight to changing conditions and make the appropriate changes (operationally, financially, R&D/ new products, supply chain, etc.) to meet customer needs and support revenue growth while meeting profit/ EBITDA objectives.

This could take many forms. For example, a client is quietly reshoring/ nearshoring 80% of a key product line to move production closer to the customer and create manufacturing resilience. Another client is reassessing their supplier network and geographical location to create a regional cluster that will support manufacturing resiliency. Other clients are upgrading planning and scheduling processes so that they can better utilize capacity across the organization to support revenue and service goals in the most efficient manner. Last but not least, another client is evaluating offload strategies and insourcing vs outsourcing options.

Creating Manufacturing Resilience with SIOP (S&OP/ IBP)

Our most successful clients are utilizing tailored and collaborative SIOP (sales, inventory and operations planning) processes to understand customers’ needs, create revenue predictability, and, most importantly, to define what’s required to be able to deliver these needs successfully, predictably and profitably. Most likely, given the rapidly changing circumstances in the global supply chain, you will need to reconfigure and continually refine how you supply the agreed upon demand plan. For example, watch a video about a?client success story?in utilizing SIOP to meet growth objectives and scale successfully.

In this situation, we have reevaluated where and when to place orders for critical purchases, reconfigured offload options, and assessed insource vs. outsource options based on changing needs. In another client situation, we evaluated manufacturing and storage capacity. We decided upon a certain level of reshoring/ nearshoring and agreed to reconfigure the distribution network, tailor for e-commerce increases and upgrade storage capabilities to flex to meet growth goals.

SIOP is not a magical off-the-shelf solution. It is tailored to each client and the unique circumstances, strategies, differentiators, people, processes, systems, and data. As you get a directionally-correct monthly cadence going with cross-functional and potentially cross-organizational engagement, strategic issues and related roadblocks will emerge. These issues become the focus to create resilience in manufacturing and supply chain.

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. She focuses on maximizing the customer experience and enabling profitable, scalable, dramatic business growth. Ms. Anderson is a recognized Supply Chain thought leader by SelectHub, named a Top 40 B2B Tech Influencer by arketi group, a Top 50 ERP Influencer by Washington-Frank, one of the most influential in Supply Chain by SAP and a woman leader in Supply Chain by RateLinx. She was recently interviewed on Fox News, has published special reports with a supply chain focus: Thriving in 2022: Learning from Supply Chain Chaos – Insights from 22 Trusted Advisors and the eBook, Future-Proofing Manufacturing & the Supply Chain Post COVID-19, as well as her primer, I’ve Been Thinking, strategies for creating bold customer promises and profits. A contributor on topics including a superior customer experience with SIOP, advancing innovation, and making the supply chain resilient, Ms. Anderson is regularly interviewed and quoted by publications such as Industry Week, Bloomberg, and The Wall Street Journal. For information, sign up for her Profit Through People? Newsletter or for a copy of her book, visit LMA-ConsultingGroup.com.?????????