Tag Archives: Customer Demand

Demand is back. After many industries saw customer demand dry up during the pandemic, it is surging like it hasn’t in a long time. Consumers are spending money again. That’s the good news. The bad news? Companies across many industries, especially manufacturing, are struggling to meet that demand.

The reasons for this are as varied and unique as every company out there, but we are seeing a one-two punch creating capacity limits among our clients: the tight hiring market coupled with supply chain disruptions. So, how can businesses overcome these restraints and get ahead in the current landscape? First, let’s understand the issues at hand.

The hiring problem

We haven’t seen this tight of a hiring market in two decades or more. Businesses in many industries were forced to lay off or furlough workers during the pandemic, and now that demand is back up, they’re finding it next to impossible to fill those shoes, or in many workplaces, steel-toed boots. Why? The pandemic caused employees of all stripes to rethink their life choices. Maybe they don’t want to work in a manufacturing facility, or retail shop, or in a cubicle anymore. The result of that is what economists are calling “The Great Resignation.” According to the U.S. Department of Labor, 4 million people up and quit their jobs in April 2021. In May, that number dipped “all the way down” to 3.6 million, but by the time June rolled around, it was back up to 3.9. We haven’t seen this kind of mass exodus in generations, if ever. Make no mistake, the jobs are out there. Companies in all industries are scrambling, even desperate, to fill them. But this is not a matter of “if you post it, they will come.” They’re not coming.

The supply chain problem

Yes, many restrictions have been lifted, but supply chain snags, roadblocks, disruptions and downright stoppages continue to bedevil many industries. So even if you have enough people to get the job done, the supplies may or may not be there when you need them.

The hiring crunch and supply chain double whammy, combined with skyrocketing demand, is creating a difficult situation out there for many industries.

How USC Consulting Group can help

When it comes right down to it, meeting increased demand with fewer workers and a disrupted supply chain means one thing: Getting the job done requires increasing your operational efficiency. At USC Consulting Group, that’s our specialty. We’ve been doing it for 50-plus years. But it’s not easy. Sure, everyone wants to do more with less. But how, exactly? Here are some ways we find work well to ferret hidden opportunities for greater efficiency.

Engage the line. This means getting up close and personal with anyone who has anything to do with the production line, mining their expertise about what’s working and what’s not, and looking closely at the job on an hour-by-hour basis. Looking at the operation through that lens, you’ll be surprised what you can find.

Get a firm handle on capacity. How much is actually possible to produce? How much time will it take?

Rethink your staffing. How many people will it really take to get the job done? Looking at the operation with an eye toward people power, you may find you can get the job done with fewer employees. Which is good news for companies scrambling during this hiring crunch.

Scrutinize the management operating system. This is about how you plan your work, assign it and follow up to ensure the job is getting done. Make this part of your business a well-oiled machine.

Get real about throughput. What is the ideal “drumbeat” of your production line? Are things moving at the right speed? But, this isn’t just about speed. It’s about producing good product faster.

In the end, we use these and other strategies to uncover opportunities for efficiency and help companies meet rising demand even with the constraints they’re facing today. If you’d like to read about this topic in more depth, download our whitepaper, “Strategies for Meeting Customer Demand” or give us a call today. We’re ready to help.

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If you have noticed — or, in many cases, been run over by — dramatically increasing customer demand for your products, you’re not alone. Now that restrictions have been lifted in many parts of the country, and the world, consumers are spending money again. And spending. And spending. All of that increased customer demand translates to the need for ramped-up production across a wide swath of industries, from manufacturing to mining to agriculture to pulp and paper — and the list goes on. Some pundits are predicting an economic boom the likes of which this country hasn’t seen since the last Roaring ’20s. They’re calling it a “supercharged rebound,” one that may well lead to many years of strong growth. That’s great news!

The problem is the speed at which it’s coming and the capacity of companies to meet that demand.

Download USC Consulting Group’s white paper Strategies for Meeting Increasing Customer Demand today. We’ll look deeper into this issue, the reasons for the disconnect between demand and the ability to meet it, and overcoming challenges such as supply chain disruptions and the hiring crunch.

Why is USC uniquely qualified to help?

We were founded as Universal Scheduling Company in 1968. Back then, it was all about shop floor control and working with employees to find out how to get more work done. We spent years refining our capabilities and analyzing processes. We’re up and down the supply chain now. We do organizational design, spend analysis, strategic sourcing. But the heart and soul of our business has been built on getting more efficiency on the shop floor, helping companies do more with less, and increasing operational efficiencies overall.

We’re not like the consultants who started at the high level and then dabbled with the floor. They don’t get out on the shop floor very often. We built our business from the floor up. We’ve had our (steel-toed) boots on the ground for more than 50 years. We’re most comfortable where they’re most uncomfortable. Getting out on the floor — it’s where we live.

If you’d like to learn more about how we work, or talk with us about strategies you can use to harness your existing assets to meet your growing customer demand, please get in touch today.

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There are a host of different philosophies that business owners adopt to effectively manage their organizations. One of the most successful and widely utilized in the manufacturing sector is just-in-time inventory. Although not exclusive to manufacturers, lean manufacturing — as it’s more commonly known — is designed to improve process efficiencies by minimizing waste and maximizing output, producing just enough volume to sell quickly.

However, as the supply chain challenges of the coronavirus crisis continue to play out, with certain household products like paper towels, baking ingredients, and cleaning supplies still difficult to find, some are questioning the wisdom of this management philosophy. During the height of the pandemic amid “panic buying,” shortages dragged on for weeks at a time all across the country. Since manufacturers kept their own supply levels low and couldn’t ramp up production due to social distancing measures, stockers could barely keep up with the pace of demand. Shoppers snatched up household staples just as soon as they could find them.

Steve Cahillane, CEO for the breakfast cereal giant Kellogg’s, told The Wall Street Journal the company is considering amending its just-in-time inventory approach.

“There is appetite for more safety stock going forward,” Cahillane explained. “That is something that everybody is talking about.”

Some experts have concluded that lean manufacturing principles don’t work well within an environment with demand uncertainty. Contrary to what the critics say, this strategy remains a relevant and effective production principle during these times. Here are five unwavering reasons as to why:

1. Lean manufacturing principles are more than “just-in-time”

Lean manufacturing as a concept has been around for a while now, born in the 1930s and adopted by the automotive titan Toyota. Ninety years in the making, the thrust of lean manufacturing remains the same, but due to some nuanced understandings of lean, some organizations seem to have misconstrued what the term actually means. As noted by Industry Week, lean manufacturing isn’t just about inventory, but rather maximizing customer value while minimizing waste. Citing the definition that Lean Enterprise Institute uses, the publication noted that lean manufacturing is all about changing “the focus of management from optimizing separate technologies, assets, and vertical departments to optimizing the flow of products and services through entire value streams.”

Wally Hopp of the University of Michigan Ross School of Business goes further. He told The Wall Street Journal that lean inventory originally urged adopters to have backup plans in place to guard against circumstances preventing businesses from producing as they do normally.

“In a lot of the lean literature, that’s just stripped out,” Hopp said.

2. Lean can enhance flexibility

Another way in which lean manufacturing principles have been misconstrued is from a standpoint of flexibility. When implemented properly, through strategies like lot size reduction, level scheduling, and employee cross training, lean manufacturing is designed to help companies improve their process efficiencies. Theodore Duclos, chief operating officer for Freudenberg Sealing Technologies, told IndustryWeek that these same principles can also be applied to mission-critical equipment so these resources designed to enhance output can do more than one thing. In other words, instead of equipment being devoted to one specific task, optimizing equipment to handle multiple tasks helps to pick up the slack as a result of supply chain disruptions. It’s likely that product shortages stemmed from one dimensional equipment, thereby preventing some businesses from improvising.

3. Lean increases engagement among employees

A fundamental component of improving output in any business is engagement, which many businesses and decision makers say their company is lacking. Worldwide, it’s estimated that over two-thirds of workforces are not engaged, according to polling done by Gallup. Additionally this lack of engagement winds up costing business owners roughly 18% of their annual salary.

The very meaning of lean from a standpoint of running a business enables workers to have more say in terms of decision-making as they become stakeholders, noted IndustryWeek contributor Eli Boufis, co-founder and executive principal for Driehaus Private Equity. An engaged employee culture helps staff change their perspective by viewing problems not as stumbling blocks but as opportunities for improvement.

4. Lean improves responses to behaviors of customers

Similar to the misunderstanding of what lean means, there is also a misconception of the root cause of the ongoing shortages. There’s reason to believe it was more the multiplier effect than anything else. Perhaps the best example was what occurred with toilet paper. When news organizations reported that store shelves were increasingly bare with this staple product, many consumers responded by purchasing more rolls than they would normally, fearful that they would run out come the time they needed it. This thinking process resulted in a chain reaction in which everyone was thinking the same thing. In short, perception drove the shortage, which ultimately became a reality.

In the book “Lean Thinking” by James Womack and Daniel Jones, the co-authors write that lean as a concept and approach serves as “a way to do more with less human effort, less equipment, less time and less space — while coming closer and closer to providing customers exactly what they want.”

In short, lean practices aren’t part of the problem, but part of the solution as this approach is designed to help producers adapt and respond to changing customer demands as they occur.

5. Lean is widely adopted by industry leaders

Lean manufacturing principles are not just some idea or concept that works for some organizations and not for others. In many ways, it’s a way of life and highly prioritized. According to a joint report issued by Kronos and IndustryWeek titled “The Future of Manufacturing: 2020 and Beyond,” when business owner respondents were asked about their priorities moving forward, “lean manufacturing systems” was the second-most common response, behind only quality management systems.

Some of the most successful companies in the world have adopted lean manufacturing practices, including:

• Caterpillar
• John Deere
• Walmart
• Kimberley-Clark Corporation
• Intel
• Ford
• Toyota
• Georgia-Pacific

COVID-19 and the adverse effects on the economy that resulted are real, but lean manufacturing can be a solution. USC Consulting Group can help you implement this strategy in a way that works best for your organization. Contact us today to learn more about how to get more out of your business with less.

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