What the world needs is another acronym, right? Normally, I would say no way, but this one – "SIOP" – is a good one because it helps organizations of all types evolve to solve problems quicker and with more foresight.

"Sales, Inventory & Operations Planning" used to be called "S&OP" for "Sales & Operations Planning." But more and more, I am seeing forward-thinking businesses couch their strategies in a broader context that involves world-class inventory management.

Simply defined, SIOP is an integrated business management process through which the executive/leadership teams continually achieve focus, alignment and synchronization among all functions of the organization. We’re learning these days that the smartest companies cross organizational boundaries to solve problems in strategy, planning, managing inventory, sales and manufacturing.

In its most basic form, SIOP was developed to address these types of situations; however, it is impractical to do so at the SKU or transaction level. Accordingly, SIOP provides a structured business process that facilitates addressing problems at the product family or group level ahead of time whenever possible.

To gain greater insight, the Tompkins Supply Chain Consortium recently performed an analysis of the level of communication that takes place between functions to address SIOP issues. Data collected from a recent Consortium survey indicates that more than 80% of participating companies have a formal SIOP process in place, and there is virtually no difference in the use of an SIOP process at retailers or manufacturers.

If you’d like more information on the survey and SIOP, you can download the Executive Briefing, Sales, Inventory & Operations Planning: Crossing Organizational Boundaries.

Is your company doing SIOP, and if so, what have you learned?

More Resources

From the Tompkins Supply Chain Consortium: Inventory Management Tops 'Critical List' for Companies in 2010

 

Lessons from the Benchmarking and Best Practices Leaders, from the The Global Supply Chain Podcast (listen here or see the text transcript)

Photo credit: Tim Brauhn

In a couple of recent blog posts, we’ve discussed strategies that retailers used in 2009 to prepare for that holiday peak season, and we’ve noted some findings from a recent Supply Chain Consortium survey. Now Dan Avila, guru of retail consultants, is back to share some more findings and a link to the full 2009 Retail Peak Season Report.

-- Jim

--------------------------

Retailers really had to put on their thinking caps for this past holiday season. As with other industries, retail companies had unprecedented economic quandaries going on around them, and they had to come up with ways to get through their busiest time successfully.

Not only have their efforts worked for the 2009 peak season, but retailers are also planning to use many of the same strategies as the 2010 holiday season approaches later this year.

For the past peak season, as the Supply Chain Consortium’s 2009 Retail Peak Season Report found, the top four retail inventory planning strategies used by respondents were:

Reduced inventory levels

Increased emphasis on forecasting

Improved planning processes and tools

Increased reporting and information

Looking ahead to the 2010 holiday season, retailers surveyed also said that they plan to focus on optimizing inventory levels and placement, improving forecasting methods, continuing to refine their SKU base, and executing initiatives with suppliers more effectively in the retail supply chain.

What are your plans for 2010? Will you be using these strategies? Be sure to download the report if you want more details before your peak season begins.

--Dan

More Blog Posts on Retail:

Back to the Future: For Success in Retail, Look to Lessons Learned During the 2009 Peak Season

 

Retail's Rebound Linked to 'New Frugality' of Consumer

 

Retail 2009 Has Been Extremely Challenging, But Here are 5 Issues to Address Now

One might expect mergers and acquisitions to be slow, since many companies are still in recovery mode. But the opposite is true -- we are seeing a lot of mergers and acquisitions right now. Corporate M&A is presenting the business world with the ability to zoom past the competition, as well as increase profitability.

To help prepare for this renewed importance of merger and acquisition strategy, I'm doing a podcast series on the topic that already has two installments, with two more on the way. It's part of the ongoing Global Supply Chain Podcast, which I host, and it has been going strong for over a year now.

The first podcast in this new M&A series is a general look at the state of M&A, overall and for specific industries. For instance, one industry's M&A activity is up 154 percent! I'll let you guess which until you hear the podcast or read the transcript. In this podcast, I present four keys to a successful M&A.

Listen here at http://www.tompkinsinc.com/podcast/transcripts/3-2-10_podcast37-merger-acquisition-1.asp

The second podcast is a really interesting interview I did with Technomic Asia's Steve Ganster, and he had a lot of great information to share. Steve has worked with hundreds of companies internationally on M&A projects, and his insight is valuable. He shares some of the common pitfalls of mergers and acquisitions, as well as ways to stay proactive and see the process through to success.

You can listen to it here: http://www.tompkinsinc.com/podcast/transcripts/3-16-10_podcast38-merger-acquisition-2.asp

You may be saying, "This really doesn’t affect me, Jim, so why should I care?" Well, at some point, it is a good bet that your company will be involved in M&A – either acquiring and integrating another organization or becoming the one that is integrating into another organization. And if you are with an M&A firm, you can always learn more about what it takes to successfully merge entities.

I hope you will take a few minutes to listen and subscribe so you get the next two installments in this series.

GoGoGo!

Jim

More Resources: 

Caught Between the Tiger and the Dragon: A Business Novel by CEO Jim Tompkins is a modern-day fable that cleverly brings to life the ups and downs of business today. Find out more.

More Blog Posts on Mergers and Acquisitions

Are You an M&A Sinner? Repent and Heed the Lessons Learned!

 

Private equity firms make supply chains the star when adding value to their porfolio companies.

 

A caution on mergers and acquisitions and how they affect companies and their supply chains.

With recent global economic struggles, discussions about China have become more perplexing.

Some companies are feeling an urge to pull back and run their businesses on American or European soil and not even consider China. Others are going full-steam ahead into China and other parts of Asia without really taking the time to understand how business and supplier relationships in China work in that region.

In a recent podcast discussion with Kent Kedl of Technomic Asia, we talked about a survey from AmCham (American Chamber of Commerce in Shanghai) which showed how American companies that are successfully expanding into China are actually able to use this expansion as a hedge against the challenges they are facing in their home markets.

To stay in the game and become successful, American companies need to learn more about what they have to offer China and be able to sell it to our Asian counterparts. And lest we forget – Guanxi is still key to doing business in China (see a blog post on this topic by clicking here).

For Western companies already in China, or those that are entering the Chinese business market, I recently wrote an entertaining book on the topic. If you like to learn while having a little fun, you may want to check it out. In the book, Caught Between the Tiger and the Dragon, you can follow in the footsteps of the main character, Rich Morrison, as he learns about Chinese business processes the hard way.

Don’t go in blind like Rich. Now is the time to make sure that your company is positioned correctly in the global marketplace. Take the time to understand what your company has to offer to China and determine how to follow through with your goals. Does your company currently have a strategy for expanding to Asia? Or if you are currently conducting business with China, what have you learned?

Go!Go!Go!

Jim

More Resources

The award-winning China Business Blog and Podcast 

Book: The China Ready Company by Steven H. Ganster and Kent D. Kedl　

Recent GoGoGo! blog posts on business in China

Photo credit: theogeo

I recently reviewed SupplyChainBrain’s "2010 Supply Chain Management Resource Guide & Executive Yearbook." It’s a lot of expert knowledge packed into one package, and I think it underscores the importance of supply chain to today’s organizations.

Decisions that you make on logistics, distribution, technology, sourcing, material handling, and supply chain benchmarking stand to have the greatest impact on your company in the future. I know you must be tired of hearing that "the economic downturn changed everything … we will never look at business in the same way … the new norm is that there is no new norm (I think I said that?)" and so on. But it is true, nonetheless.

Here are some of the key points that I found in the resource guide:

Stronger, supply-chain oriented companies will see profitable growth, and weaker, less capable companies with little supply chain focus will falter.

 

Food and beverage manufacturers, as well as pharmaceutical manufacturers, must automate product traceability across the supply chain to meet invigorated FDA rules.

 

Companies should look for logistics service providers that align sales and marketing strategy with business strategy. It is a mistake to consider them separately.

 

Supply chain technology, such as WMS, may have fallen by the wayside during the recession, but be prepared to upgrade your technology as order growth returns.

 

China is leading the world economy out of the downturn, so look to global supply chain enhancements to fuel growth and remember to apply Western best practices to China supply chains.

 

Inventory is finally getting the emphasis that it deserves, as companies realize that inventory must be coordinated with product development and planning in an environment that embraces sales, inventory, optimization and planning (SIOP).

And this is only a taste of the information found in the guide, so I encourage you to take a look for yourself. What would you add?

Go!Go!Go!

Jim

More Resources

Inventory Management Resources 

 

White Paper: Documenting Distribution Operations: FDA Validation Beyond the Laboratory and Manufacturing Facility

 

Inventory Management Tops 'Critical List' for Companies in 2010

 

From the Supply Chain Information Technology Perspectives Blog: Orchestrating a Harmonized Supply Chain; the Secret to Collaboration

Photo credit: dierk shaefer

Wow! I’ve just finished another editorial on the Congressional gridlock that takes a clear partisan position. So silly! Not sure what is worse – the folks who write the editorials or Congress. All partisan garbage.

How about me? I adopt neither a pro nor an anti position on the Obama administration, or a Democratic or Republican position. Hence, I cannot be lumped in with the partisan gridlock cry babies. Plus, one other small detail: Given the reality that Washington has yet to act on a stimulus package that really stimulates (see my previous blog post on this topic), then what I have been saying all along has proven to be correct.

Over a year ago, I made no secret of the fact that I thought the recession would bottom in June, 2009 (and it did), and that growth in employment would occur in the first quarter of 2010 (and it will).

In spite of a terrible winter of snow and flu and the lack of a stimulus package that stimulates, I believe we will see positive employment numbers very soon. Why do I think we are starting to dig out? Please consider:

· Temporary and contract employment is healthy at 9.6% above where it was in February, 2009.

 

· Although manufacturing employment has continued to climb, at only 11.5 million workers, this is not the big news. What is big news is that the non-manufacturing sector activity in February (some 95 million workers) has climbed to 53 on the Institute for Supply Management service sector index – the highest since 2007.

 

· Corporate America continues to be positive, with capital spending bouncing back to 9.3% above where we were in February, 2009. In addition, only 7.5% of all CEOs see their business declining in the next 12 months, as compared to 56.9% who see their business growing in the next 12 months.

 

· Retail sales (Go Consumers, Go!!) continue to grow, with the February Retail Index coming in at 8.2% above the February, 2009 index.

 

· In February 2010, only 36,000 jobs were lost and in fact, many economists predicted February would have added jobs, had it not been for the snowstorms.

Once again, thanks to the American worker, the American consumer and the American business leader, the economy is recovering and will shortly return to positive growth in employment – and all without substantial help from Washington.

We have a very bright future ahead. So recovery is complete, it is now time for the Great Comeback (see more in this blog post). Are you ready? What are you seeing in your sector? Let’s compare recovery experiences.

GO! GO! GO!

Photo credit: Reg

I am just winding up a wild, seven-day trip to Europe. In the last week, I have been in five different hotels, 10 different towns, and have experienced some fantastic food and several bottles of great red wine.

Let’s see -- One keynote speech (check), 11 client meetings with European companies and 14 client meetings with global companies (check and double-check), and a very successful European staff leadership meeting (check!).

I wanted to share the thrust of many of my discussions and interactions that I have had while on my trip:

Priority 1: Supply chain challenges result from volatility in the marketplace. How do we approach this?

Increased emphasis on the importance of contingency planning

 

More formal commitment to supplier collaboration

 

Increased prioritization of supplier risk assessment

 

Increased focus on SIOP

 

Increased emphasis on speed, agility and flexibility

Priority 2: Globalization has an impact on organizational structure, processes and the future of business. How do we meet this challenge?

Increased priority of eliminating regional boundaries

 

Enhanced awareness and supply chain involvement in M&A

 

Increased focus on optimizing global product flows and distribution network planning

 

Increased awareness of growing China markets

 

Greater emphasis on Total Delivered Cost of purchased goods

Priority 3: There is an increase in inventory turns and the need to capture free cash flow. How should we approach this?

Improved business analysis and specification of inventory requirements

 

Improved demand planning

 

Greater emphasis on the application of inventory analysis tools

 

Enhanced focus on the elimination of obsolete inventory

 

Enhanced focus on product and vendor rationalization

Priority 4: There is a strong drive to reduce transportation costs. How can this best be accomplished?

Increased focus on mode selection

 

More methodical freight bidding processes

 

Application of more sophisticated TMS

 

Greater emphasis on Freight Audit and Payment

 

Higher priority for unbundling freight on inbound purchases

The most interesting part of this list is that it is not much different from the list that would result from seven days of meetings in the U.S. And in fact, it also has a lot in common with the list that would result from a week-long visit in our Asian operations. So, one big observation and two conclusions:

Observation: While I have just explained the similarities of the "Plan-Buy-Move-Store-Sell" of the supply chain, by omission, I have not addressed the real difference in the "Make" component of the supply chain between Europe, the United States and China.

Conclusion 1: Europe and the United States are separated by a wide body of water, but very close in the challenges/opportunities being faced in the marketplace today.

Conclusion 2: China is different from Europe and the United States, but many of the supply chain challenges being addressed in Europe and the United States are not all that different from the China challenges/opportunities.

So, although it is not yet completely one world, it is a small supply chain world after all. Have you been to Europe on business lately, and if so, what are your observations about global supply chain, logistics and other business functions?

Go!Go!Go!

More Resources

Download the white paper: Evolution to World-class Inventory Management

 

New report reveals China as one of the few growth areas for US business around the world.

 

Article from Logistics Insight Asia: What is the supply chain outlook for 2010 in Asia?

Photo credit: Laszlo Photo

I frequently talk about resiliency and how companies can plan ahead for tough times. It’s also true that you can learn from past successes and mistakes to create a better future.

Looking back on the holiday season of 2009, we see that retailers (in general) did a good job of battening down the hatches and preparing for a stormy season. Last year’s retail peak season brought a lot of change. Companies had to look at their inventory in a whole new light and come up with innovative ways of making sure they were prepared for the peak season.

To learn more about what retail companies did to cope with unprecedented challenges, the Tompkins Supply Chain Consortium polled its members on their peak season strategies from 2009. Those who responded to the survey had a clear strategy shift from previous years. Some major findings included:

Inventory levels were reduced (in some cases substantially), and generally, retail companies experienced minor negative or no lost sales as a result.

 

Companies emphasized forecasting and planning in an effort to reduce inventory in the retail supply chain.

 

Retailers focused on their own DCs’ crossdocking capabilities and on requiring vendors to hold more inventory for quick deployment.

 

Technology played a part in the peak season, but most companies utilized their existing tools or made somewhat minor enhancements.

 

Retail companies did not discount prices as much as they expected. Price discounting was reduced compared to their plan and compared to previous years.

 

Supply chain capacity was not the major issue that it has been in previous peak seasons. The only issue was Internet and catalog fulfillment capacity, in which significant increases across retail were the norm.

Look for more findings here from the consortium’s new report, Lessons Learned from a Tough Market: 2009 Retail Peak Season Strategies, in the next few weeks.

Meanwhile, are you thinking ahead to your 2010 peak season? What new strategies are you planning?

Go!Go!Go!

Jim

More Resources

www.supplychainconsortium.com - Check back soon for a copy of the new retail report.

 

Specific Resources for the Retail Industry

 

Inventory Management

Photo credit: Flickmor