Tag Archive: consumer

The Resilient Supply Chain: Do You Have Vendors or Partners?

December 1st, 2018

Since we did research on “The Squeeze” for a speech on the the squeeze in aerosapce (meaning:  how does the supplier in the middle between the Tier 1 suppliers who supply final assembly parts for an airplane and the powerhouse mills survive, or preferably thrive), we have been thinking a lot about the supplier relationship.  Coincidently, we also heard a lot on this topic at the Association for Supply Chain Management (ASCM/APICS) international conference as it is a hot topic across all industries. There was an almost identical discussion occurring with retail and the consumer goods industry. Last but not least, all of our clients are seeing the relevance of this topic.

What is the “right” answer?  Of course, it depends!
To manage “the squeeze”, one of the keys is to create partnerships with your key suppliers.  The rest can be vendors since they are not core or significant to your success. However, your key suppliers must be partners and collaborators.  For example, one of the best ways to handle the middle position in the aerospace world is to bring your customers and their demand together with your suppliers and their capabilities.  

Here are a few ideas that all depend on being a partner:

  • Collaborate with suppliers on new ideas/design concepts to reduce materials and waste for you AND up your supply chain.
  • Become a partner of your customer and gain access to demand information as it becomes available and help translate that into a benefit for your customer, you and your supplier.
  • Leverage pricing and volume across the supply chain for a win-win-win.

Although these ideas relate to aerospace, the same concept applies with every client.  When I was VP of Operations and Supply Chain for an absorbent products manufacturer, we used these same concepts to find win-win-win solutions in your supply chain.  We partnered with key vendors to redesign materials (that performed better at a lower cost), redesign packaging, reduce waste in our manufacturing process which required teaks and collaboration with both material and equipment suppliers and more.  By following a partnership route instead of the “vendor” negotiation/beat up on price route, we turned our situation around from bad to good.

We found private equity backers who wanted profitable growth.  However, soon after, the market changed and oil and gas prices were continually rising which significantly impacted our material costs (and were unavoidable) while our private equity investors still expected the same profit improvements as before.  Our business was also heavy in transportation cost since the product was bulky which was also an issue with rising oil and gas prices. Thus, we collaborated with customers, material suppliers and freight suppliers for win-win-win solutions. It “worked” and we were able to offset the price increases while growing the business in a profitable and scalable way.

These types of situations are common in today’s business environment.  

Do you view your suppliers as vendors or partners? And who are you hiring to manage these relationships?  Transaction-oriented purchasing folks or strategic relationship procurement resources?

 



U.S. Small Business Optimism Climbs to 2nd Highest on Record!

September 12th, 2018

A National Federation of Independent Business survey reported that U.S. small business optimism is close to a record high and is at the highest level in 35 years!  Fueled by tax cuts, deregulation and robust consumer demand, business owners are optimistic about the future.  As a result, unfilled job openings rose to a new record. Not only did 23% expect to create new openings in the next three months but 23% also cited finding qualified workers as the single most important business problem, nearing the highest in 45 years.  Are you appreciating your talent?

 

What Should We Consider and/or What Impacts Could Arise?
Definitely, we should all look at our talent with a fresh set of eyes.  Before we think about hiring, the key question to answer is “are you appreciating the talent you already have?”.  Your competition will if you don’t. Perhaps go a step further – are you appreciating them as you want to be appreciated or as they want to be appreciated?  

For example, giving someone who wants opportunities to advance his career a small bonus might not be as nearly appreciated as putting thought into the ‘right’ project to further his career.  A single mother might prefer a bit of flexibility in her schedule vs. either of those perks. And there are a surprising number of people who would secretly prefer you to remove non-productive and poor attitude employees out of their way.  It can be the single best thing you can do to keep good people by weeding out the poor performers.

Next, consider whether you’d want to be hired by your company.  Are you working on progressive initiatives? Does it look like a dungeon or a place you are proud to arrive at each day?  Are collaboration and teamwork encouraged? Or is it a dog eat dog world? What does social media say about your company? And, most importantly, people work for people; not companies.  Are your leaders a good representation of your company? Would you work for them?

Would you work for you?