Category: The Amazon Effect

Quoted in the Signal on Restocking Shelves Amid the Novel Coronavirus

March 29th, 2020

I talked with the Santa Clarita Valley Signal on the problems keeping shelves stocked amid the coronavirus lockdown. We talked about the end-to-end supply chain and what impacts the supply chain would have on how quickly the shelves would be restocked. See below for the reprinted article from the Signal.

In an effort to replenish empty shelves amid the coronavirus outbreak, Santa Clarita Valley stores have implemented changes they believe will help keep the products in the hands of customers, but it will take cooperation from the shoppers.

Consumers have scrambled at both the staple and mom-and-pop grocers in search of toilet paper, bottled water, cleaning products, medicine, and perishable and dry goods, as fear of COVID-19 continues to affect everyday life.

Rest assured, however, that stores, from Costco Canyon Country to Ralphs in Valencia, are restocking every day and that there is no supply shortage, many said Tuesday.

At Trader Joe’s on Bouquet Canyon Road, for example, refilling shelves is a daily occurrence, but “we don’t have a say of is what’s coming in,” said a store employee who did not wish to provide a name. “For instance, we might have a little less on eggs on a day than the day before by a couple of cases, but every day, we do get a shipment, seven days a week.”

Similarly, local destinations such as Stater Bros., Vons, Target, Costco and smaller shops, such as Friendly Market on Sierra Highway, said they refilled every day, but what was restocked varied based on what is currently available from suppliers.

Who and how distant their suppliers are can affect how swiftly stores restock, said Lisa Anderson, a Claremont-based manufacturing and supply-chain expert and president of LMA Consulting Group Inc.

“It really very much depends on your particular supply chain,” she said Tuesday. “Certainly, overall, there’s going to be some impact. However, right now it’s more of a bullwhip effect,” meaning consumer demands can cause companies in a supply chain to order more goods to meet the new demand.

Several retailers depend on China, where COVID-19 originated, for supplies, but major, direct disruption might be too soon to tell, said Holly Schroeder, president and CEO of the SCV Economic Development Corp.

“I think people are really dealing with the immediate matter at hand,” she said. “Some companies, since the China trade war, have begun moving or diversifying their supply chain but as the virus affects different countries, you don’t quite know how everything will play out, which creates a lot of uncertainty.”

In the face of uncertainty, retailers are working to control what they can, such as reducing store hours to allow for more restocking time and placing a limit on the number of items customers can purchase in one trip, in an effort to deter shoppers from hoarding.

While they restock, however, customers are asked to do their part, at least one company said Tuesday.

“Now the company is asking for help from its local communities,” Stater Bros. said in a statement. “Please refrain from purchasing items you won’t need for the coming week. Be assured we are working closely with our manufacturers and suppliers to replenish our store shelves daily.”

These efforts can help across the nation, but in the SCV with a huge community-feel presence, now’s the time to “pull together and share some resources that might go a long way,” said Anderson.

“It doesn’t mean that we should be going around standing next to everybody, but find a creative way to help someone out.”

For additional coronavirus information, resources and strategies, please visit the coronavirus resources section of our website.



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.