Tag Archive: Amazon effect

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:



The Resilient Supply Chain: Top Requests from Clients on Technology

January 11th, 2019

Next in our supply chain resiliency value series, we are sharing a short video on the relevance of ERP and e-commerce systems from the Manufacturing Summit’s panel “Amazon Effect: Pass or Play – the New Sales & Distribution Game and How it Affects Manufacturing”.

I’m responding to a question on what manufacturers and distributors need when it comes to systems and technology.  Every client in the last few years has requested a project objective that goes back to the overarching goal of scalable, profitable growth.  The trick is how to achieve BOTH a superior customer experience (with increasing pressure from disruptors such as Amazon and Uber) AND profitable growth. Of course, there is no easy answer, and it depends on a multitude of factors. With that said, there is an ever increasing need to scale with technology inclusive of ERP, e-commerce and more.

ERP has become much more of a strategic topic. It isn’t about blocking and tackling and using ERP to achieve tactics.  Instead, it is about whether a business has the technology and systems to scale in a scalable, profitable way.

Do your systems support your customers’ needs?  If not, you had better jump into the fray or the next disruptor will eat your lunch.  If your answer was, ‘yes but I have to do x, y and z to make it work,’ our next question is will this process be repeatable, reliable and profitable?  If not, perhaps you better think twice. It is likely your competitor will answer yes.  Lastly, have you thought about your customers’ needs a year into the future?  If you aren’t prepared to handle them currently, you are getting behind.

Our most successful clients don’t wait so long that they lag behind. Is it time for an upgrade?  You are most welcome to our free resources to determine whether it is  the ‘right’ time. As you debate the benefits vs. costs, keep in mind that as hard as it is to take the leap, the most successful executives are willing to take on prudent risk to make leaps forward.  Are you?

If you would like an expert to assess your situation to determine whether you should further leverage your current software, put the effort into upgrading or simply focus on people and process improvement opportunities, contact us.

 



Supply Resiliency: Video Interview on Disruption in Logistics

December 4th, 2018

Next in our supply chain resiliency value series, we are excited to share an interview with BJ Patterson, President of Pacific Mountain Logistics.  Thanks to B.J. for sharing his expertise on the Manufacturing Summit’s panel “Amazon Effect: Pass or Play – the New Sales & Distribution Game and How it Affects Manufacturing”.   

B.J. is responding to a question related to supply chain resiliency on disruptions in logistics.  In essence, the key question is: How to maintain margins throughout the supply chain when:

1) We ship a single item vs. a pallet of items in terms of warehousing/material handling inefficiencies

2) Customers’ orders require many more truck trips than ever before

3) Truck space is at a premium and we are shipping a lot of air since Amazon-like shipments often have 1 item in a large box on a truck.  

Certainly, there are no easy answers.  However, we must be thinking about how we’ll create supply chain resiliency so we can thrive with these changing market conditions.

 


With an increasing frequency, supply chain partners are pulling together to find solutions to these types of challenges.  Moreover, the strategic use of data is at a premium. If you can better coordinate all of these ever-changing market conditions to gain visibility and efficiencies within your extended supply chain, you just might take the lead in your industry.  

Our most successful clients don’t wait for these disruptors to crush them.  Instead, they are always looking for potential disruptors and searching for solutions.  They take proactive approaches to take the lead position instead of disappointing customers in an era where the customer experience is of paramount importance.  

What are you doing to navigate these logistics disruptors? We are always interested in feedback and ideas to share.

 



What Should We Be Thinking for the 2nd Half of the Year?

August 15th, 2018

As hard as it is to believe, we are almost half-way through the year.  As a result, we should be thinking NOW about what to stop, start and continue for the second half of the year.  I learned this exercise from my HR mentor (a P&G-trained guru) as we performed it with our team with great results (thanks Debra!).

Stop, Start, Continue  

Here are the questions to ask yourself and your team:

  1.  Stop – What should we stop doing?  This is actually the hardest. Not only do I find it hard to stop doing things I’ve included in my daily and monthly routines, my clients seem to find this quite challenging as well.  Are you selling to a customer and losing money? Or, does this customer always create some sort of hardship for your team? Is your team putting together reports because they always have even though they are no longer necessary?  Do you open them and make decisions based on them? If not, stop. Are you hanging on to that so-so supplier because you’ve developed a nice friendship even though they are no longer delivering or are at high cost? Perhaps you should have a discussion with them about it.
  2.  Start – Let’s assumed you’ve stopped something.  Now you have time to start something new. I am bad at this sometimes as well – just add, add, add but not stop.  Are you falling into that trap as well? I am going through my activities currently and making sure to stop more (or at least equal) to the start activities.  Start those activities that you think will yield an improved return on investment. Undoubtedly, there are several of these opportunities if you look. We find that our clients have many more ROI opportunities than they realize when we perform an assessment – every time without fail.
  3.  Continue – Thank goodness, not everything we are doing should stop or start.  Continue those activities that add value and contribute a result. Do you measure success by activity (time) or by result?  I definitely advocate for the latter – you’ll double your success.

Put it in Context with Market Forces
Although it is always a good idea to take stock of what you should start, stop and continue, it will be helpful to put it in context with market forces.  Here are a few questions/priorities to consider.

  • Amazon Effect – No matter your business, you are being impacted by the Amazon Effect.  Elevated customer expectations, immediate deliveries, 24/7 accessibility, easy returns and more.
  • Customization – Who doesn’t want a product or service tailored just for them?  We all would. I am an executive platinum status on American Airlines and they always offer me a complimentary meal as a thank you for my status.  It’s a small thing but I do appreciate it.
  • Resurgence of Manufacturing – Somewhat in response to the Amazon Effect and the desire for customization, executives are discovering it makes sense to locate manufacturing and last minute customization close to the customer.  For example, even though California is not the state anyone would think for manufacturing, it makes imminent sense when you consider that it is the 5th largest economy in the world. If only we could get CA politicians to support us!  
  • Additive manufacturing – What could be closer to your customer than 3D printing on the fly?
  • Logistics rules -Again, when considering the impacts of the Amazon Effect and customization, it is quite clear that warehousing close to the customer is also desirable.  However, there are vast cost pressures.  So, you need to be thinking about how to take performance to a new level.  The same is true with transportation – if you even can source a carrier. The last mile is certainly gaining a lot of attention. “Last mile. Last minute” is my new favorite expression.
  • Global – We are in a global world.  Are you making global considerations as well as local ones?

What else do you think we should consider?  Drop me a line as I’m interested. No matter what – give the second half of the year some thought and you’ll increase your chances of success.

 



Warehousing Strategies for Success

July 12th, 2018

The Amazon Effect is creating elevated levels of stress in the warehousing and distribution world. The key question is how to provide immediate deliveries, customized service, easy returns, and more for a reduced cost – a very good question indeed!

A few considerations to ponder:

  •  Storage capacity -What is your storage capacity?  How does that compare with your requirements?  And how can you maximize what you can store in your warehouse?
  • Flow – Are you running in circles around your warehouse to support your customers?  Similar to a manufacturing environment, flow can be an essential ingredient to warehousing success – or not.
  • Productivity – Have you automated what makes sense and will increase your speed/ throughput? If it doesn’t improve speed (and accuracy) to your customers, is it really more productive?  Similarly, is outsourcing truly more productive?
  • Equipment – What equipment is built into your warehousing strategy?  Would an upgrade provide a return on investment?
  • Data – Are you using predictive analytics and data analysis to make informed decisions to stay ahead of your competition?
  • WMS tools – Whether “poor man’s” or sophisticated, do you have a way to pick, put away and sort efficiently?
  • Inventory – Don’t ever forget inventory.  Without having the right product in the right place at the right time at the lowest system-wide inventory (and potentially end-to-end supply chain network inventory), what else will matter?

We have yet to come across a warehousing or distribution client that didn’t have at least a 20% improvement opportunity.  Have you looked into your opportunities lately?  Most likely your competition is!

If you need help thinking through your warehousing and distribution strategy, contact us.