Category: The Amazon Effect

Beware of New Data Law in China & Its Impacts

February 27th, 2020

According to the Epoch Times and International Business Attorney, John Tulac, China’s new cybersecurity law poses a big risk for anyone doing business in China. In essence, if you send data to or from China, your data can be audited at any time. It certainly is concerning from many standpoints such as intellectual property, trade secrets, and more. Listen to my short video on this new law and impacts to consider.

John and I talk about this law as well as many other topics related to doing business in China, alternatives to China and the new USMCA trade deal. Listen to our new interview in our Future-Proofing Manufacturing & Supply Chain series. Undoubtedly, you’ll pick up a few worries along with ideas/ potential solutions. Let us know what you plan to do.

What Should We Consider and/or What Impacts Could Arise?
Many of our clients do NOT import from China.  So you might be thinking, why does this apply to me? If companies start leaving China in a mass exodus, you will certainly be in competition for new manufacturing options such as Vietnam, skilled labor in the U.S. and Mexico, technical skills to automate, use 3D technology, etc. And this is before thinking about indirect impacts. If the supply chain moves away from China, where will it move? There could be dramatic impacts on ocean lanes, political unrest throughout the world, raw material supply and supply and demand. We have never met a client unconcerned about these topics. After all, profitable growth is the name of the game!

At a minimum, no matter whether your supply chain relates to China, we recommend you re-think your manufacturing operations and extended supply chain. Are you dependent on any core suppliers? Are you spread too thin among suppliers? How are you selecting suppliers? And that is just the first topic in a line of many when re-evaluating your end-to-end supply chain. How about the broader topics of whether your manufacturing and supply chain is agile? Fast?

Start by re-evaluating your manufacturing and supply chain road map and think through related impacts. These topics certainly relate to our new LMA-i, LMA-Intelligence series including the Amazon Effect, the Resilient Supply Chain and Future-Proofing and contact us if you’d like an assessment path-forward plan to accelerate your bottom line and customer performance.

 



Future-Proofing Your Customers

February 13th, 2020

Have you thought about future-proofing your customers? In thinking about future-proofing your people, it makes sense to start with your customers.

The statistics are staggering. According to Outbound Engine, acquiring a new customer can cost five times more than retaining an existing customer. We wouldn’t be surprised if the actual cost is far greater if direct and indirect costs are combined. It certainly should give us pause. How do we future-proof our customers?

One way is to focus on the Amazon Effect and providing lighting speed delivery and tirelessly differentiated service. There is no doubt customers expect more. The bar gets higher with each passing day. Thus, we must be ahead of our customers to take a proactive approach to providing a superior customer experience while being cognizant of profitability and working capital.

How will you know what your customers see as differentiated service? Start by listening. Observe your customers and see what might provide value. Ask questions and tailor your solutions to be special for key customers. Find ways to provide these differentiated services while proactively managing the process efficiently and effectively from the internal point-of-view.

To accomplish this feat, it is wise to keep in mind that you are only as good as your #1 asset, your people. We have yet to meet a client with unhappy employees and happy customers. Start by getting your house in order. What do your employees need to be successful? It is more than a training course or occasional pat on the back. Do they know they are making a difference? Are they empowered within reasonable guidelines? Do they know leaders value performance and are willing to address the tough topics?

Investing in employees is the best way to future-proof your manufacturing and supply chain. Expand your thinking on people to your trusted advisors, customers, suppliers and other business partners.

Are you taking the time to ensure a prepared yet agile end-to-end supply chain? Remember, the people within the end-to-end supply chain count in providing an exceptional customer experience!

If you’d like an assessment of where you should invest (time, resources, money) to deliver lightning speed delivery and tirelessly differentiated service, contact us. There are also plenty of free articles and resources on our website. Let us know your thoughts and questions.

Did you like this article?  Continue reading on this topic:

The Amazon Effect Won’t Die
People & Robots Can Co-Exist Successfully


Interview with Fender Guitar Executive

February 7th, 2020

Can people and robots work side-by-side? It seems to be the hot topic lately.  Fender Guitar’s Senior VP of Operations, Ed Magee and I talked about talent, technology and transition after the Manufacturing Summit. At Fender, skilled craftsmen and craftswomen are critically important.  Yet, Fender also automates where it makes sense. Technology working hand-in-hand with your #1 asset, your people, can assist in improving the craftsmanship, as well as safety. Ed considers training and development to be a key to success.

We also talked about potential recessions and disruption. Certainly, in today’s Amazon-impacted environment with global volatility, there will be continued ebbs and tides to navigate. Ed mentioned the importance of creating community and flexibility. Invest in your employees during times of boom AND bust. Don’t be afraid of the cycle and keep the lessons in mind as you think through your business cycle, and you’ll future-proof your manufacturing operation. Maintain focus, don’t cut back on training and development when everyone else does and you’ll be likely to speed by the rest.

Watch our interview to learn more and gain a few insights. What are you doing to future-proof your manufacturing operation and related supply chain? What should you be doing? Ed and I concur. If you aren’t starting with your people, nothing else will matter.

No matter how high tech key clients go, the most successful and sustainable clients accompany high tech with high touch. You’ll gain some strategies for people in our Profit through People archives as well as with our new LMA-i, LMA-Intelligence series, Future-Proofing Your Manufacturing & Supply Chain. Contact us to discuss further.

 

 



Amazon Kicks off the New Year by Creating Disruption

January 30th, 2020

According to a Bloomberg article, Amazon kicked off the New Year by creating disruption. They have abruptly stopped buying products from some of their wholesalers, looking for ways to bypass wholesalers or push the cost to down the chain and increase profit. If your business depends on Amazon, hopefully you have been future-proofing your manufacturing and supply chain operations.

If not, you might be in a world of hurt! With that said, if you are heavily dependent on any one customer or supplier, you are in a risk-ridden situation.  It makes me wonder whether FedEx’s move away from Amazon was brilliant or whether they took on too much risk moving away from Amazon. Listen to a recent video where I refer to this topic. Are you taking these types of strategic questions into account in your 2020 plans?

What Should We Consider and/or What Impacts Could Arise?
Although the impact is obvious to wholesalers cut off by Amazon, the impacts are more widespread than that. Will Amazon be able to go direct to manufacturers? Will they be able to increase profits by squeezing their supply chain without impacting service? What happens, if that isn’t as easy as it appears? Will customers just wait? Are they getting too big or will other e-commerce players have an opportunity? It will be interesting to see.

In addition, no matter if you are related to this industry or not, it will impact you! If new players become involved, the manufacturing and logistics footprints will evolve. Will you be ready for opportunities? Undoubtedly, we will be impacted by changes in logistics infrastructure, rates and service requirements. The question is whether we will let this happen to us or if we will proactively address it. It might be too late to future-proof against this particular move by Amazon, but there will be countless more changes coming by Amazon as well as many other disruptors. Will you be ready to navigate changing circumstances and market conditions for a positive customer and bottom line impact or not?

At a minimum, continually re-evaluate your supply chain road map and think through related impacts. These topics certainly relate to our new LMA-i, LMA-Intelligence series including the Amazon Effect, the Resilient Supply Chain and Future-Proofing and contact us if you’d like an assessment path-forward plan to accelerate your bottom line and customer performance.



Will Amazon Pass UPS & FedEx?

January 26th, 2020

According to a CNBC article, Amazon is already delivering half of its packages. It appears that Amazon is on target to pass by FedEx and UPS. They have had distinctly different strategies. FedEx curtailed its contract with Amazon in early 2019, and Amazon just retaliated by not allowing 3rd party sellers to ship via FedEx. On the other hand, UPS is doubled down with Amazon. Which will turn out to be better in the long run? And, as we know, USPS has been delivering packages for Amazon behind-the-scenes. Could they come out on top?

Or will Amazon just crush everyone? In recently touring the Ontario airport (the powerhouse in package shipping), it is clear Amazon has a long way to go to catch up in air freight but they are also known to speed by competitors. Amazon is slowly making inroads to ocean shipping as well. No matter who you think might win this race, if you ship or receive anything, you should pay attention!

What Should We Consider and/or What Impacts Could Arise?
Simply think about Sears. They were Amazon prior to Amazon entering the scene. Unfortunately, they didn’t keep up with changes occurring, and they are largely out of business. That annoying but not worrisome competitor might just speed by you if you aren’t staying relevant!

Additionally, from a supply chain and logistics point-of-view, there are substantial impacts. With the sheer relevance of the last mile, transportation infrastructure, customer perceptions, technology advancements and much more are becoming relevant. Undoubtedly, no matter your industry, it will be impacted since everyone relates to logistics. Not only logistics, but many industries relate to oil and gas prices or would be impacted by delays in materials etc. The impacts are widespread and substantial. Have you thought through your strategy and positioning based on these factors?

At a minimum, continually re-evaluate your supply chain road map and think through related impacts. These topics certainly relate to our new LMA-i, LMA-Intelligence series including the Amazon Effect, the Resilient Supply Chain and Future-Proofing and contact us if you’d like an assessment path-forward plan to accelerate your bottom line and customer performance.