Category: The Amazon Effect

The Amazon Effect is Still Going Strong!

July 1st, 2019

The Amazon Effect remains top of mind with CEOs. Whether they compete directly (which is less than 1% with my clients), supply or distribute for Amazon (which is a slightly higher percentage) or are just impacted by the Amazon Effect, it is a major source of concern and/or opportunity. Have you thought about what Amazon is doing lately and how it might impact your business? Better yet, have you thought about becoming the disruptor?

Here are a few of the latest headlines about Amazon (all in the last few days):

  1. Kohl’s will accept Amazon returns across the board starting in July – The pilot programs in Los Angeles, Chicago and Milwaukee have been successful. Kohl’s and Amazon see this as a win-win.
  2. Amazon announced that one-day free shipping will be the standard for Prime members – It is very hard to go backwards once you get accustomed to a new level of service. All organizations watch out!
  3. Amazon is interested in buying Boost from T-Mobile and Sprint – There is no telling what Amazon is thinking of disrupting next.
  4. Amazon seems to be saying it isn’t a retailer – It appears as though the threat of Amazon purging thousands of smaller vendors from its core business is coming true. Stay tuned…
  5. Amazon makes a big splash in the travel industry – In India, Amazon will offer flight booking services.

Amazon gets a ridiculous number of headlines. In the interim, one of the last Sears stores in Phoenix had a massive closeout sale recently. Sears used to be the Amazon of the times 50 years ago but lost its way with a few strategic missteps and lack of innovation. Waiting around for Amazon to determine your course is not a wise move. Instead, think proactively about your strategic advantage and how you’ll get out in front of the crowd.

Think about what Amazon and other competitors do not do well.  Find a way to capitalize on these opportunities. Of course, you’ll have to adhere to the new model of doing business – rapid deliveries with short lead times and high tech opportunities.  Find what is unique to you and your product or service and drive differentiation in your market segment.

We find that there is significant change occurring across the board. Perhaps the reason some companies are vertically integrating is to do what Amazon cannot do completely at this point: take control over the complete supply chain. Amazon seems to be pursuing this strategy as well when it comes to transportation infrastructure although last mile delivery is quite the challenge. If you’d like to get an assessment of your business and profit opportunities as it relates to the Amazon Effect, please contact us.

 

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UGG Founder, the Amazon Effect in Healthcare & Why Demand is Key

The Resilient Supply Chain: What If You Sell More?

 

2019 Predictions Document

Find out how pricing relates to 2019’s predictions. If you missed our 2019 Predictions Document, download yours here:

 

 

Do You Have a Resilient Supply Chain?

Do you have a resilient supply chain? In today’s disruption-intensive business environment, a resilient supply chain is a “must”!

Find out how to navigate disruption and achieve peak performance.

Check out our new video & articles series



Let’s Manage Inventory for Our Customers

May 16th, 2019

inventory managementAmazon is propelling this age-old topic into a new realm. Since the CEO of the Ontario Airport Authority used the phrase “last mile” has become “last minute” on a panel I facilitated last year, I have shamelessly reapplied his brillant quote.

If customers don’t even know what they want, how can we? Interestingly, we have found that many customers, even the seemingly most confused and  volatile ones, have a pattern to their demand. If we take a holistic view of their demand and inventory planning processes from beginning to end and from high level to the minute detail, solutions emerge.     

One strategy that has proven quite effective is to “remove the middleman”, the customer himself. Instead, with access to demand information direct from the customers’ customer or end user, you can not only manage the extended supply chain inventory better for a happier customer but you also can improve margins, efficiencies and cash flow to boot.

In consumer products circles, this strategy often termed, vendor managed inventory is usually dictated by the “big guys”.  In aerospace, it is also expected but termed differently, customer based ordering, min max and other names. It is also common in healthcare as we won “supplier of the year” for two years in a row because of what we accomplished with VMI for Cardinal Healthcare when I was VP of Operations at PaperPak. We decided to make it a strategy for key customers at PaperPak, even though Cardinal is the only one who requested it. Should you consider a strategy like this to get ahead of your customers’ demand?  It is just another aspect in creating a resilient supply chain. Check out our series on the topic.

 

 



2019 Predictions from Manufacturing & Logistics Executives

April 22nd, 2019

Economic volatility and uncertainty are the new normal. Instead of lamenting, manufacturers have a unique opportunity. There has never been a better time to stand out from the crowd with a superior customer experience amidst the chaos. 

Not only has the Amazon Effect driven customers to expect customized product and service offerings with rapid response – creating a greater demand for local manufacturing – it has also made innovation a cultural norm. There is a trend towards near-sourcing, vertical integration and agile strategies to proactively address these elevated expectations as well as to meet customers’ insatiable need for last minute changes.

With the rise of e-commerce, increasing transportation costs and global risks, sourcing experts are re-evaluating their global supply chains. Logistics is gaining in relevancy as transportation costs increase, sustainability efforts expand and managing inventory becomes a hot topic as accelerating cash flow becomes more relevant.

Drones, robotics, IOT, artificial Intelligence, big data predictive analytics and additive manufacturing are transforming entire industries while providing the tools to create a customer-centric, resilient supply chain. However, technology alone will achieve nothing. With a differentiated strategy and the right talent, the opportunities are endless. 

We asked business owners and executives for their predictions for 2019. From aerospace and defense to food and beverage to building products, the perspectives may be different, but the outcome is the same: Opportunity Abounds. 

Find out how to navigate disruption and achieve peak performance. Download our free report here.

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UGG Founder, the Amazon Effect in Healthcare & Why Demand is Key

February 8th, 2019

In listening to the UGG founder, Brian Smith talk through his trials and tribulations in developing the amazing UGG brand, a few themes emerged.

  1. Resilience in finding pivot points when obstacles emerged played a vital role in creating the UGG brand.  
  2. The benefit is what matters; not the product.
  3. Creating demand goes back to being a leader in the category when the market shifts.

What a great story!

Next, related to the demand theme, I spoke to the Professional Women in Healthcare (PWH) Orange County group about the Amazon Effect. As a former Executive of a healthcare manufacturer, it was fun to have an interactive discussion with these leaders. Interestingly, healthcare manufacturers and distributors are experiencing the same issues as aerospace, building products and food & beverage. How to keep up with demand (or preferably get ahead of it) while increasing profit and accelerating cash flow (not having a bunch of inventory tied up for no benefit) is the topic on everyone’s mind. Aligning demand and supply and related parties is the trick!

Demand emerges as a common theme. Therefore, I’d like to invite you to an executive lunch centered on the topic, “Increase Demand“. I am speaking on a panel of experts on driving demand in your business. Use early bird promo V25 for a 25% discount. Hope you’ll join us there.

What Should We Consider and/or What Impacts Could Arise?
Every client has a focus on demand. Typically, they are thinking about how to grow the business in a scalable, profitable way, which leads to a mountain of questions about forecasting and how to get in front of demand.

Interestingly, it ALL goes back to one place, the customer. Do you have a passion for your customers and creating a superior customer experience? If so, demand will grow. If not, it won’t. In watching countless organizations over the last 14 years in consulting, I’ve yet to see one that succeeded long-term without this essential ingredient. Have you?

If you have a passion for the customer as the CEO or General Manager, that is a great place to start. However, it is not enough. Your sales team is relevant but the most successful clients view the entire organization as the sales team with a passion for the customer. Ask a trusted colleague to visit your facility. They will be able to ‘feel’ whether there is a passion for the customer or not. Ask them.

If the most successful executives have a focus on demand, it is worth noting. Are you providing lip service to the customer or are you creating this view within your organization? There is also a tremendous amount of focus going into understanding demand with forecasting tools, analytics, artificial intelligence, and more. Do you have a clear path forward as it relates to demand? Of course, this topic also relates strongly to creating a resilient supply chain. Only the most successful companies predict and proactively engage customers to get ahead of demand.

To learn more about these strategies, check out our new series:



What’s Ahead for Supply Chain?

January 18th, 2019

To think about what’s ahead in supply chain, it is important to put it in perspective with what’s ahead in business.  Read our article, What’s Ahead in Business? for details on the key trends impacting business:

  • Importance of the customer experience
  • Taking the holistic view has become a “must”
  • Volatility is the new norm
  • The coming power of manufacturing and supply chain

Given these trends, we predict our most successful clients will be thinking about these themes in the end-to-end supply chain:

  1.  Manufacturing is the Place to Be: Manufacturers are uniquely positioned to thrive. I have to say, I love that manufacturing is getting its due. According to NAM, for every $1 spent in manufacturing, $1.89 is added to the economy which is the highest multiplier of any economic sector.  
  2.  Distributed Inventory Management will be Key to Manufacturing Success: In today’s Amazon-impacted business environment, the customer expects rapid, low cost delivery. Given that the “last mile” has also become “last minute” with customers changing their mind frequently, predictive, distributed inventory management has become a differentiator.   
  3.  Additive Manufacturing will Rise to the Top: Customers want customized products on the fly. Yet, distributors cannot stock everything near every manufacturer, end user and the like. 3D printing can achieve this goal.
  4.  Customized, Rapid Delivery with Amazon-like Service and Efficiency is the Norm: In addition to additive manufacturing, re-shoring and near-sourcing (locating close to customers) are viable solutions to achieve Amazon-like service. The question is how to be efficient, cost effective and visible while serving customers.
  5.  Amazon Prime for Manufacturers is More than a Pipe Dream:  Subscription based models are becoming relevant to manufacturing, just as to Netflix and ERP systems. According to my friend, colleague and author Robbie Baxter, the membership model is just as relevant in manufacturing in transitioning from a one transaction/one-way communication to an ongoing relationship with the customer with a constant stream of feedback.  
  6.  We are Moving to a Digitized Supply Chain:  To address customers’ elevated expectations while continuing to make a profit, manufacturers and supply chain organizations are moving to a digitized supply chain. Artificial intelligence, IoT, the smart factory, robots and more. Don’t embrace technology as a fad.  Instead, embrace technology as a way to achieve a result.
  7.  To succeed, We Must Create a Resilient Supply Chain: Disruptions and volatility abound. Customers expect more. Boards expect more. People are harder to find and retain. Creating a resilient supply chain enables a proactive response to the current environment.

What will you do to get ahead of the curve in the New Year?

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