Allow us to introduce you to Mike Ryan of the M. Ryan Group, a seasoned expert who solves problems that cost manufacturing companies millions. With a career background that includes tenures at industry behemoths like GE and Goodyear, Mike specializes in solving supply chain and inventory issues that impact cash flow and customer satisfaction. After leading teams in large organizations, he took an entrepreneurial path, betting on himself to address inventory optimization challenges across multiple companies.
Whether you’re an emerging leader or an experienced executive, this post promises actionable insights and practical takeaways. We’ll dive into effective leadership, exploring how making informed, focused decisions can lead to operational efficiencies and transformative chances. It’s not just about optimizing inventory; it’s about empowering courageous leadership to operate more efficiently and make impactful decisions. Let’s dive in!
What exactly is inventory optimization?
Inventory optimization is a strategic approach to managing inventory in order to minimize costs while ensuring that stock levels are adequate to meet customer demand. It involves a delicate balance of having just enough inventory to satisfy customer needs without tying up too much capital or risking potential delays in the supply chain.
An integral part of a successful business is supply chain management, particularly its ability to predict future demand accurately. This involves a thorough analysis of sales trends, forecasting demand, and adjusting the inventory accordingly. By using a data-driven approach, businesses can optimize inventory, ensuring they have the right products in the right quantities, thereby avoiding stockouts and overstock situations. This approach is crucial in meeting customer demand, which can fluctuate based on a variety of factors, including market trends, seasonality, and economic conditions. Understanding these variables and incorporating them into the supply chain strategy is key to enhancing the business’s responsiveness and overall profitability.
However, despite the importance of inventory optimization, it is a complex process that requires continuous monitoring, and often, an objective perspective. This is where Mike Ryan and his team come in. With years of experience and proven methodologies, they help businesses identify inefficiencies in their supply chain processes and implement solutions to reduce excess inventory levels, improve fulfillment rates, and ultimately drive bottom-line results. Through data analysis and strategic planning, Mike and his team provide customized solutions that align with a company’s goals and objectives, ultimately leading to better business outcomes.
Mike’s Early Days
Mike has always had an interest in understanding how things work. When he was two, his dad bought him a stubby screwdriver set. If he could reach it, he would disassemble it. And, even at the young age of two, he quickly realized that putting things back together isn’t always easy.
Now, Mike is a ceramic engineer, and he chose this path because of the tactile nature of the trade. As his career progressed, he went from focusing on manufacturing to incorporating everything from customer service to the supply chain. With this broadened exposure it gave him a holistic perspective of his field.
What Companies Benefit Most?
When asked who he works with most, Mike says, “My primary audience is middle-market manufacturers and distributors.” For him, that includes businesses that range from $50 to $350 million in annual revenue.
Businesses of that size are typically big enough to have material problems, like having $20 million in unnecessary inventory while needing more internal talent to navigate that challenge. That’s where Mike comes in. Either the CFO has recognized a revenue or cashflow problem and seeks him out for consultation.
In his experience, two everyday leadership behaviors result in these cashflow challenges.
There isn’t an existing process.
-
- A process needs to be definable, predictable, and repeatable. When everyone understands all the steps in the process, the outcomes are predictable, and you can repeatedly achieve the same results. And by this definition, many companies need an actual process.
- Establishing clear inventory optimization processes can pre-emptively solve issues that would have cost a company millions.
Poor communication.
-
- Poor communication can create a bottleneck in business operations, leading to significant financial implications. In Mike’s example of a manufacturing company in Colorado, when the VP of Engineering approved the change orders, he needed to adequately communicate with the manufacturing floor, causing delays and inefficiencies.
- This failure to convey critical information was a fundamental breakdown that resulted in cash flow issues.
- Poor communication can hamstring an otherwise productive system and create financial challenges.
An external perspective like Mike’s can give organizations insight into operational bottlenecks or the root cause of their cashflow troubles that would otherwise go unnoticed and unresolved. Joe points out that leaders can become blind to issues in plain sight because they exist in that environment daily, which emphasizes the need for an external auditor like Mike.
Mike’s Thoughts on the Entrepreneurial Operating System®
According to the company itself, the Entrepreneurial Operating System (EOS®) is “a complete set of simple concepts and practical tools that has helped thousands of entrepreneurs around the world get what they want from their businesses. Implementing EOS will help you and your leadership team get better at three things:” Vision, Traction, and Health.”
Looking back at Mike’s time at General Electric (GE), he shares that he learned much at the metric-driven company. Fast forward, and Mike was the VP of operations at a business that operated on EOS. He compares it to his time at GE.
To him, EOS emphasizes communication across leadership at a business and individual responsibility level. His work with EOS helped him to solidify the fundamentals of solving operational problems. His process typically starts with a well-defined problem, understanding who’s accountable for the problem, and understanding the metrics that indicate failure and success.
Mike’s connection with EOS is the origin of this article. He was recently a special guest on the Into The Storm Leaders podcast. This podcast is hosted by Joe Jurec of CultureShoc, a firm of EOS Implementers®, Facilitators, and Coaches who specialize in helping companies build more robust culture and leadership. More on that a bit later.
The Genesis of the M. Ryan Group
While Mike was VP of Operations for a family-owned business, the company’s main revenue-driving segment resulted in a layoff. Mike found himself in a period of reflection and reevaluation. Utilizing his established network in Northeast Ohio, a friend led him to a consulting firm.
During the call with the consulting firm, Mike said they “just clicked,” which resulted in him. on a project in St. Louis. It was through this hands-on, operational experience that Mike recognized the breadth of his own skill set. As one project seamlessly flowed into another, he and his wife came to a realization: he could sustainably do this kind of work. Thus, he began carving out his niche, marking the genesis of the M. Ryan Group.
Charging Into the Storm of Entrepreneurship
Stepping into entrepreneurship, especially when Mike was a provider, husband, and father, may seem like braving a storm of high risk. However, as he charted this uncertain path, he understood that while corporate jobs offer implied security, proper security is elusive.
For him, increasing the risk also meant gaining the ability to create his sense of security. This realization about the illusion of safety in corporate jobs is only one many come to if they’ve faced multiple layoffs or other career lows. Joe echoes this sentiment because he believed he’d retire with Sony Electronics. However, the reality for many is that careers in large companies are filled with peaks and valleys. If there’s a nagging feeling of “I can do something valuable,” it’s worth at least considering the entrepreneurial route.
For him, the reward is not just in the security but also in the joy of making a tangible impact. Anytime he can make the life of a business owner, CEO, or private equity investor a little better, he finds it immensely rewarding. This duality of creating his security while deriving joy from aiding others crystallizes his decision to continue down this challenging yet fulfilling path.
The Second Storm of Entrepreneurship: Learning How to Sell
When he first launched his business, his initial focus was on back-office elements. He crafted a logo, built a website, and even went as far as ordering a branded golf polo shirt, eagerly awaiting its delivery. Holding the shirt up, he felt a sense of accomplishment until his wife, Jessica, pointedly told him, “You are the best-prepared consultant with no work. You need to learn how to sell.”
Acknowledging this as the ‘storm’ he needed to confront, Mike sought advice from a seasoned salesperson and friend, Matt. Over lunch, Matt dispelled Mike’s doubts by emphasizing that selling is fundamentally about building relationships, an area where he was already skilled.
The concept of relationship-building as the foundation for sales, especially for an entrepreneur and new business owner, was pivotal for Mike. The allure and mental reward of designing logos and websites can turn your attention from the real immediate need to build a network. It’s that work, building a network, that’s most often uncomfortable and involves breaking out of your comfort zone, picking up the phone, asking questions, and even making mistakes in front of others.
A critical aspect of this is seeking feedback from those around you. Engaging with others, asking questions, and absorbing their insights can prove invaluable, especially for a young entrepreneur. The more these interactions occur, the more opportunities arise, ultimately addressing one of the immediate ‘storms’ entrepreneurs must face—having no work. By leaning into and pushing through these challenges, he found the keys to keeping his family “warm, safe, dry, and fed” and setting his business on the course for success.
What’s Important to Mike as a Leader?
Effective leadership involves a host of qualities, which, in addition to open and transparent communication, include directness, kindness, and the ability to “connect the dots” for people to guide them through the thought process that leads to a decision or action.
Mike had a transformative experience working at Goodyear under Philip Kane, a notably thoughtful and intelligent leader. In a meeting focused on forecasting sales and considering external market conditions, Mike laid out the assumptions and conclusions but noticed a passive, yet palpable, resistance from the team. Realizing something was wrong, he consulted Philip for advice.
Philip explained that while he might see the logical progression from point A to point Z, others might connect the dots differently. So, it’s essential to show others your logical reasoning, especially in moments like this, where there seems to be a disconnect.
The lesson was this: effective leadership means taking the time to clarify the process, inviting team members into the conversation, and making it a shared journey. Collaboration increases the team’s investment in the outcome and enhances their understanding, empowering them to think critically about future decisions.
And, as time passes, most teams will reach a point where they no longer need the reasoning behind a leader’s decision. Either because they understand it or they trust it. Using Mike’s example,
“How much do you want to know about how the sausage is made? Some people say, ‘What does it taste like? What does it look like?’ Other people ask, ‘How much fennel seed are you putting into the mix?'” So, part of it is understanding the audience you’re interacting with and being open.
Learning to connect the dots is not just about improving communication; it’s about fostering a more collaborative and understanding work environment. It can distinguish between a conclusion that “falls flat” and one that resonates, leading to practical actions and outcomes. For any aspiring or seasoned leader, taking the time to articulate how you conclude can prove immensely valuable, just like it has for Mike.
A Curiosity-Led Approach
Effective problem-solving in leadership often starts with a focus on symptoms, the visible indicators of underlying issues. For example, when a team member shares a challenge they’re facing—whether it’s a cash flow issue or a problematic vendor—the leader starts by asking questions to unravel the complexities of the problem. Rather than concentrating on what he’ll say next or impatiently waiting for his turn to speak, the leader places great importance on active listening. This is an aspect of his approach that Joe has deliberately self-coached and for which he seeks accountability from his team.
The value of this approach lies not just in diagnosing the problem but also in fostering a culture of curiosity within the team. It’s an exercise in being “more interested than interesting,” a principle that encourages dialogue and collaborative problem-solving. By asking questions and attentively listening to the responses, the leader is better equipped to identify the thread that can unravel the more significant issue at hand. The outcome is not just a solution to a problem but the cultivation of a work environment where everyone feels heard and engaged.
A Real-World Example of Navigating Client Resistance
In business consulting, one of the most challenging yet crucial tasks is telling clients what they don’t want to hear. There was a situation where, despite having ample inventory, Mike’s client could not get products out the door efficiently.
After a comprehensive review, Mike concluded that the problem was not a lack of workforce but too many people! His recommendation was radical: fewer workers would resolve the issue. The client, however, was not only resistant but increased temp labor spending by $80,000 over the next month, gaining only an extra $11,000 in sales. It was a frustrating experience for Mike, who ultimately decided to part ways with the client, stressing that his role was to create value and if the client wasn’t willing to take the necessary actions, he couldn’t help.
At the core of this case is the difficult decision of when to move on, both for consultants and businesses grappling with internal challenges. He pointed out that people’s issues are incredibly complicated because of the human factor involved. When discussing business growth, it’s not just about scaling up but also about doing so intelligently and conscientiously. The failure to make hard decisions—like letting employees go when a business model changes—can lead to catastrophic outcomes for everyone involved. This speaks to the necessity of looking at the big picture, even when it consists of making painful decisions.
Final Thoughts from Mike
When asked about any areas companies can likely recuperate some cashflow, Mike shares this: fill rates or on-time delivery are often leading indicators of how a business is doing. He describes the gradual decline in such metrics as a “dull ache [that] all of a sudden becomes a shooting pain,” highlighting the importance of keeping a close eye on your operational health.
When there’s a trend of growing working capital without an apparent reason, Mike suggests scrutinizing the need for new assets, such as renting another warehouse. Before leaping to the assumption that more space is needed, he advocates for a closer examination of how efficiently the current resources are being used. “Before you build those two new closets in your house, let’s clean out the closets we have,” he advises. The goal is to make the most of what you already have, as nine times out of ten, “we can pull five or 10% out without a lot of heavy lifting.”
Ultimately, Mike believes maximizing the output doesn’t always require more input. Instead, he suggests a more thoughtful and strategic approach, one that revolves around optimizing existing resources and investing in your current team. Whether it’s avoiding the pitfalls of scaling too quickly or leading your team in a way that unlocks their full potential, the emphasis is on making smarter choices that yield higher returns.
“Instead of getting another warehouse space that will allow us to get more aged inventory and tie up more working capital in stuff that’s non-productive, why not just make sure our processes are tight and what we have is the right stuff?”
Ready to address leadership and team management head-on? CultureShoc has worked with more than 300 clients across the U.S., impacting more than 30,000 leaders. Schedule a free consultation to get started today!
