The Importance of Taking Care of Your Customers' Customers with Lisa Anderson

Connect with Lisa Anderson

Website: www.lma-consulting.com You can also call 90963039 

Telephone: 909-630-3943

Lisa Ryan: Hey, it's Lisa Ryan from the manufacturers' network podcast. I'm excited to introduce you today to our guest, Lisa Anderson. Lisa provides expertise and advice on maximizing the customer experience and enabling profitable, scalable, dramatic business growth. She's worked in industries as diverse as aerospace and defense, building and industrial products, food and beverage, consumer products, and health care products. 

Before founding LMA consulting group, she was the Vice President of operations at Paper Pack. Her tenure included transitions and promotions through its transformation from a $100 million family-owned business through a merger and acquisition of three businesses combined into one 350 million dollar global company. A leveraged management buyout followed this combined with an investment banking group, which sounds like quite the ride. 

Lisa Anderson: Thank you. I'm glad to be here, and it was a great experience.

Lisa Ryan: So share with us a little bit about your background, including more details of what you did with Paper Pack.

Lisa Anderson: So I've been consulting now for 15 years, but before that, I started my career at Coca Cola and did planning and distribution planning. I went to a press plastic injection molder and then onto Paper Pack. It was quite the experience. We grew the core business and then bought a division of P&G and bought another smaller entrepreneurial company similar to us. It was quite an exciting challenge to merge cultures, people, processes, and systems successfully to integrate the products, grow the business, and increase profits and increase the company's value. It was a great experience to utilize in my consulting today.

Lisa Ryan: And even with all of those changes and everything you went through in your history before today. The last year has been, shall we say, rather interesting in manufacturing. How are you working with all of these changing conditions in the manufacturing marketplace?

Lisa Anderson: Well, never been busier. Current clients are finding that their demand is volatile. It depends on who their customers are, and the importance of the customer is shining through with coronavirus. A food manufacturer could be their customers' customer could be a Costco as an example, has been increasing as people are still shopping for food. 

On the other hand, the customers' customer could be Starbucks, and that took a nosedive when a lot of Starbucks slows down and, in some areas of the country, only drive through their open. That's led to volatility in demand, which meant that we had to focus extra efforts on understanding changing customer decisions, getting a change in customer behaviors, and getting a better handle on our demand, so that we could know what to manufacture and how to set up our supply chain to be successful.

Lisa Ryan: And that's one of the things that I've been hearing from a lot of the people that I've had as guests on the show is the thing that's keeping them up at night is the supply chain, because you don't know one day to the next, so what are you, seeing as far as what's going on in manufacturing what's going on in the supply chain.

Lisa Anderson: Well, that's a great question. I'm seeing that manufacturers that were already innovating and understood the importance of having a diversified supply chain. That doesn't mean that "hey, I have to have ten suppliers for every material or anything, but it does mean we have to be used uncommon common sense and be thinking strategically ahead. 

For example, when I was a Vice President of operations, we had one of the critical materials we purchased from Brazil. There are plenty of things that can go wrong in getting the product from Brazil into the United States, so all along, we had a backup source of supply in the United States on the east coast. Now we didn't just establish a backup supply that we went to them if something went wrong. Instead, we had 20% of our volume going through the backup source supply all along, so that they were working with us, they knew they could count on us for some volume. They knew they were the backup supply, but they were a vital backup supply. 

This did not make our private equity investors happy because they preferred that we didn't have to spend as much money on this critical raw material. Luckily, we won that battle and kept utilizing them because we had issues with the ports somewhere along the line. I think it was the transportation challenges. There's plenty of obstacles, and our backup sources supply ramped up quickly. One of the clients that we're doing that sort of thing already is better off than saying no. No time like now to start and rethink what you're doing in your supply chain, and that's just one example. 

The other thing is folks had supply let's say you had two places within Asia well, that's not helpful, even if they had China and India let's say they both experienced issues around the same time, and it still created challenges. So, it's thinking about the same thing that could be true in the United States, when I was in that role again everything under the sun happened, of course, when I was in that role, so there was a hurricane the things happen. In North Carolina, our plant was lucky, as a P&G plant, so they planned it strategically on a hill, which was helpful because the rest of the town was underwater. That said, we weren't, but no, we couldn't do anything for several weeks in our suppliers were affected. Hence, we had to have backup sources of supply and sources of production. You know, the ability to be agile so that the issues could happen, no matter where you are. However, the closer you are to your customer, the more likely, you can respond quickly, so I'll turn it over to you because there's plenty more I could talk about. Still, I'm sure you have other questions.

Lisa Ryan: You said companies that are already innovative are the ones that are faring better. What do some of those innovations look like? If somebody hasn't necessarily been that innovative to this point, what would be a good area for them to start?

Lisa Anderson: Well, you know that's true, so it could be something simple like getting a better handle on customers' changing customer requirements and changing customer patterns. That could be as simple as talking to your customers and collaborating with customers to impact our customers' customers. 

How do we positively impact their product and service? It could just be collaborating with your customer on innovating in terms of the service you're providing. So it could be that you customize a product on the fly. At the end of the process, your customer can tweak the product or tweak it to the service. Some of it's just about having the service to figure out what your customers' customers need. 

Let's say your end customer is a customer at Walmart, which is the same situation as if your customer was Boeing, which is surprisingly enough at the end in Walmart. You have a customer buying product so that you can get that point of sale type data, and at Boeing, they're using the product to build a plane either way. 

If you can figure out what needs to go to all the Boeing branches, there are fewer than Walmart's, but several still exist. So if you can figure out what needs to go to each Boeing for each growing facility, Boeing doesn't have to do it and have what they need when they need it. They don't have too much; that's a service that you're providing to Boeing. The same thing is true for Walmart, which is more expected. Still, Walmart's the same thing. If we provide products to every Walmart in the country and the distribution centers, it depends on what you're doing and what you're supplying them, which saves them a lot of hassle. They can focus on more activities that help them promote the products in the store. Let's say that's some of the innovative products and services you could provide without even having to redesign products or do anything significant. When it relates to the product, there are many configured orders like options on products, where you can say you know I'd like it in this package size of that package size or this color. Suppose you can put those closer to the customers' point where you serve the customer. 

In that case, your customer can change their mind. They don't necessarily know what their customers will do to have a more agile, flexible service to better serve their customers. 

Hence, it's all about how do you find ways to serve your customers better in a more profitable way? When you look at how we do it more profitably, we go back into our manufacturing side and say, what can I produce these items to a certain point in the process and then mass customize or customize the fly. 

Lisa Ryan: Well, one of the things that it's such an interesting way of looking at things that people are only considering their customers and the fact of just taking it that one step further, to think about your customers' customer. It gives you that much better of an opportunity to understand how you can better serve that customer so that they can serve their customer. It just opens up not only a whole new conversation and way of looking at things, but it sets your business apart because nobody else is asking them that question. 

You can do something right off the bat, sit down and look at your top three customers, top five customers, etc. and think about what's my customers' customer. Then have that conversation.

Lisa Anderson: It's shown through the coronavirus because the customers' customers reacted differently from the past. Historical patterns were blown up. Everything changed. If the customers' customer supported hospitality, they probably aren't doing well. If they supported the PPE type of business, they increased dramatically. That was true for many other less obvious industries, how you service those customers, and what kind of value you could provide. You can differentiate yourself far easier and quicker in a way than even redesigning products. Not that you shouldn't be looking at that also.

Think about it consumers have changed the way they consume it during this pandemic. Not everything that we did pre-pandemic is what we want to do post endemic. We may not even know, but we will evolve, and so our businesses, our understanding of what new products they would need in new services. We were talking about services before this. So, what new products they'll need and or what tweaks to products they'll need in the future. Given what's happening in the pandemic, we don't want to wait till it's done to figure that out. 

Somebody had to be first. Apple came out with the iPod, but the iPod was just a better walkman. No one knew they needed an iPod. So I know it's fascinating about it, it wasn't entirely new. You have to think about how can I make my customers' lives better. What would they want?  

Lisa Ryan: Well, and one of the things that came out of the whole pandemic was it's speeded up the technology. If it had not been for the pandemic, we're probably light years ahead now just because we have been forced to adopt technology that may have taken months or years to be able to implement. So what is some of the technology that companies should be looking for looking at today?

Lisa Anderson: Well, that's true. I've been involved in this region of the country, which in southern California, was known in terms of advanced manufacturing and significant and distribution. Because of the Asian supply chain, and so they had been concerned for several years, we needed to re-skill and look at how we deal with the changing conditions. Because of technological advances, we're going to automate warehouses, as well as manufacturing facilities. How would we keep up with changing conditions since the pandemic that has been accelerated? What was five years ago was is happening now. So that's like to your point, first of all, that's true. So what are some of the necessary technologies? You want to have a modern system, which is the system, that you use to take orders, ship receive, produce, invoice, etc. 

These days, if you have a highly customized system, if you have a system that cannot scale with your growth, you are behind your competitors' rest. Because of the modern systems today, we have many capabilities built into them that you can utilize to scale your business successfully. They also integrate better with some of the technologies that I'm going to talk about, so I started with the system. You can't build a house with just windows; you have to have a foundation and some walls. So it would help to have a foundation in your technology to start with, so with that said, artificial intelligence is gaining momentum. 

How does that apply well for one in the demand forecasting, which we just talked about changing customer conditions? The ability to apply artificial intelligence to find patterns where there are none is helpful. So that's one of the areas where artificial intelligence is coming into play similarly in like cash flow planning, which is critical especially depending on your size company or status. Certainly, if you're looking at going into an area of growth, having cash to support that growth is essential. It certainly comes up on the manufacturing floor, so when you look at it instead of doing preventative maintenance, how do I predict which maintenance which equipment or machinery do I need need to be looking at now, instead of just going to what the preventive maintenance schedule let's pinpoint where it's going to break down and fix it - resolve that before it even breaks down. So that's one of the areas that a lot of the manufacturers, especially the bigger ones, have been doing all along, but that's, so that's like artificial intelligence. Still, there's plenty of folks looking at robots. Robots are good. Robots are bad. Well, robots are both. 

I'm working with a food manufacturer that has invested a lot in technology. Technology has its good points and bad ones. You can go faster and be more efficient; you don't have to worry about people standing next to each other with covid and all sorts of advantages, on the other hand. But you have high-speed lines going by with like food bars, in this case. One thing goes wrong, and the rest is kind of that Lucy show everything could start flying off the line. You get all sorts of issues and waste and all kinds of problems. 

So you have to bring the right skills in. You have to do it smartly, so it's not always going faster is not always better if you don't keep your quality, etc. However, many robots, a lot going on their Internet of Things, certainly connecting machinery to other systems and related parts, are gaining momentum. You know the augmented reality. One of the things with the virtual world we live in today is that the experts may not be readily available to fly out and help you with your machinery or equipment or just everyday tasks that you have to do.

It would help if you had an expert. So, we can do a lot with webinars and zoom and those kinds of things when it comes to more analysis, the planning, the project side of things in the end, and even the earpiece side of things. When it comes to the machinery and equipment, it's helpful to show somebody what's going on, so you can start simply by showing a video of what's going on in the manufacturing facility and walking through.

I've done that with some clients just to layout their processes. Still, you can go a step further. There are 3D glasses and ways you can collaborate with folks to help somebody who's solving a problem on the line. Some technologies support that type of activity; there are autonomous vehicles and all sorts of opportunities. 

I think technology is also making labor costs less relevant I mean, that's been happening anyway because if you're comparing it to China. Let's say the rates have been going up in China. There are so many extra costs added into the end to end supply chain when you think about inventory and IP and the risks and all these other things. In addition to that, technology has allowed us to produce faster, more efficiently, automate tasks. 

One of my clients uses a robot to produce throughout the night, so they need the skills to set the product up, but then, if they can keep it on a certain product that they required extra volume of they can produce that through the night, and then in the morning, they can look at it. That helps them keep up with customer demand, so there's a lot to be said for that requires very little labor. 

Hence, it's enabling folks to relook at their manufacturing and supply chain operations and reevaluate where should I source products, how should I set this up where should I be located those types of things.

Lisa Ryan: When the other thing is that I've noticed in just in the last year, how much easier technology is. It's much more intuitive than it's ever been before. It's much less scary than it's been before, where in the past, that might have been this whole overwhelming project product or project to bring all of this technology into the plant. Now you get it, and it simplifies your life, probably to a greater extent than the pain of implementation, as you would have had just a few years ago.

Lisa Anderson: I think that's very true. That reminds me of another aspect of the system that's gaining popularity is E-commerce and B2B. Collaborating with customers with a portal for those kinds of things has gotten far easier and far more implementable. The philosophy has changed largely, and so that's partly why some of the modern ERP systems and the appropriate partner are quite important. But if you can implement these technologies and more of a like strategic sprint or in an agile fashion, you don't have to worry about learning something completely new. Agile is a somewhat uncommon common sense, which means let's try the most critical piece and start to implement there. We start directionally, and then we iterate and change as we go, but it means that you don't have to have everything perfect and spend months and months before you see any results and then like something's gone wrong, and you have to start all over again, which is not.

Lisa Ryan: So if you were to give your best piece of advice to people listening today, what would that be?

Lisa Anderson: Well, so I would say, the one thing that they can do is look at changing customer conditions changing customer requirements and how you can add value to that to your customers and your customers' customers. It will take your business to a whole new level. More companies will succeed, and not only succeed but pull away from the competition during times of turbulence. If you want to pull away from the competition by innovating, pulling all the resources to innovate, collaborate, and look at your data. None of that will be possible if you don't start with your team. Ensure that you have the right people on your team and that you're empowering and engaging them. This sounds easy, and it is not easy to accomplish. You really need to be doing that and creating a culture of innovation, and...