Tag Archive: disruption

Holiday Sales are Expected to be UP by Double Digits in E-Commerce

December 17th, 2018

Black Friday has already gotten off to a strong start!  According to Coresight Research, holiday sales are expected to be up by 4% whereas e-commerce will be up 16%!   Target had a goal to hire more than 120,000 people for the holiday season which is a 20% increase. UPS planned to hire 100,000 which is up 5,000 from last year (maybe because they had to spent $125 million extra last year to fix delays because they were short staffed).  And FedEx planned to hire 55,000 additional seasonal workers which was a slight increase from last year (and they expect a record-breaking year).

Is your business seasonal?  What are you expecting? Is anyone in your supply chain focused on seasonal business?  Perhaps you should find out!

What Should We Consider and/or What Impacts Could Arise?
Are you prepared for the holiday season?  I find this is somehow a common issue among clients.  The smartest of clients tend to miss holiday season trends.  For example, I worked with one client for several years and key workers took off during the holiday season for extended vacations every year.  Yet, it seemed to be a constant surprise when we struggled to keep up with demand.  Of course, our customer’s demand didn’t decrease, even in a non-holiday industry. Of course, clients focused on consumer products always struggle to predict holiday sales as you cannot start producing in December! When I worked with Coca-Cola Enterprises, employees only got Christmas day off because holidays were always BIG.  

Think beyond your company.  Given the statistics above, do you think your carriers might be a bit busy during the holiday season?  How about your suppliers that might supply other holiday-intensive industries? Your trusted advisors? No matter the supply chain partner, perhaps a heads up surrounding holiday activity and expectations would be a good idea. Holiday season volatility is another good example of why you should create a resilient supply chain to navigate disruption and achieve peak performance.

Check out our new video and article series as well as our soon-to-be offered Rapid Resilient Supply Chain Assessment service.



Last Mile Has Become Last Minute & the GE Port Optimizer

December 10th, 2018

 

There is no doubt – last mile has become last minute, meaning every customer changes his/her mind.  Whether it is due to consumer preference or supporting an industry that seems rather known (For example, it is clear what will be purchased to build a 737 airplane.  You don’t change that end item at the last minute.), when looking down the supply chain, no matter how clear, it all gets jumbled and becomes “last minute”.  

Thus, the key is to understand where your product is within the extended supply chain, when it will be available and where you sit in terms of the priority customers. There are many strategies to support creating this resilient supply chain including the GE Port Optimizer which is one of the most innovative and expansive technology projects taken on by the ports.  Check out the video on this project:

                             

What Should We Consider and/or What Impacts Could Arise?

The GE Port Optimizer project is an excellent example of the importance of collaboration, the strategic use of data and the impact of the customer experience on creating a resilient supply chain.  Have you thought about how to collaborate with your extended supply chain and related partners for a win-win-win? If you aren’t, your competitor will. Stranger and perhaps smarter yet, have you thought about collaborating with your competitor for a win-win?  

Creating collaborative partnerships of data, visibility and efficiency is a great example of creating a resilient supply chain to navigate disruption and achieve peak performance. Check out our new video and article series as well as our soon-to-be offered Rapid Resilient Supply Chain Assessment service:

 

 

 



Amazon, Uber, Netflix and More…..Disruption is Here to Stay!

November 7th, 2018

Although not an official theme, it was quite clear that disruption was the common theme at the Association for Supply Chain Management (ASCM/ APICS) Annual Conference.

From the keynote speaker, Marc Randolph, one of the founders of Netflix, to almost every executive and thought leader, disruption is top of mind.  Amazon has disrupted retail.  Netflix has disrupted television. Uber is disrupting the transportation industry.  Do you know what disruption is likely to impact your company – and career – next?

Certainly, Netflix is disrupting television and cable currently.  At its roots, it disrupted the video industry.  Blockbuster was a powerhouse when Netflix was getting started.  It was fascinating to hear that discussion!

Marc brought up an intriguing concept – how to disrupt yourself.  To give you the highlights, he discussed three items you need:
1) Tolerance for risk – You cannot wait for full information before you “move”.
2) An Idea – contrary to popular belief, it does not need to be big, new, complex or even good.
3) Confidence.

What Should We Consider and/or What Impacts Could Arise?
Marc’s advice is “right on”.  So, how might you go about it?  For our clients, manufacturing and supply chain organizations, disruption is commonplace.  The key question is how do you have any hope of getting ahead of this instead of being buried by the likes of Amazon and other disruptors?  The answer – create a resilient supply chain!

What IS The Supply Chain?
Let’s start by defining supply chain: your end-to-end supply chain, starting with your customers’ customers to your manufacturing and distribution operations to your suppliers’ suppliers and all connections in the middle such as transportation, systems, financials, processes, and most importantly, people.  This is quite the topic to create a resilient supply chain!

We find that the most successful executives start with their team.  I’ve yet to see happy customers with unhappy employees.  You better start there!

Each person in your business is integral to creating a resilient supply chain!  To learn more about creating a resilient team as well as the rest of your end-to-end supply chain, we are thrilled to introduce our new series, The Resilient Supply Chain: Navigating Disruption.  Achieving Peak Performance

We will be adding articles, videos, interviews/ Q&A with thought leaders and executives frequently so please save this link and join in on the discussion. We are always interested in feedback and requests.

 

 

 



Amazon Fears Driving Supplier Price Concessions at Costco

March 29th, 2018

Amazon continues to wreak havoc on supply chains worldwide.  A client that does not compete directly with Amazon forwarded an article on Costco’s new price pressures on suppliers in response to Amazon concerns.  She said that these types of industry moves were creating disruption and price pressure in her industry, even though unrelated to consumer products.  Thus, we better pay attention!

 

According to an analyst at Stifel Nicolaus, Costco’s remarks were the first time a retailer in their coverage has explicitly admitted exacting price concessions from suppliers. That is a BIG deal!  Costco’s CFO has said the brands need to come down in price because they are losing market share. Between these savings from the brands and some Costco savings, consumers are seeing significant savings. Actually, this seems to be right on. I used to buy my Mom’s Starbucks coffee through Amazon until Costco started to carry it. They will put it on promotion once in a while at a great price vs. Amazon and other retailers. My Mom stocked up! Are you thinking about these impacts?

What Should We Consider and/or What Impacts Could Arise?
The article talks about impacts on consumer giants such as P&G and Nestle.  Clearly, these suppliers will be looking for options to increase margin. They are likely to try to pass it on to their suppliers, ask for internal improvement ideas and the like. Are you in the consumer products supply chain? Are you thinking about innovations and improvements to propose?

However, even if in an unrelated industry (such as our client), you are likely to experience impacts.  How will you respond to customer requests based on perceptions created by the Amazon Effect? Have you thought about how to suggest alternatives to reducing price?  On the other hand, are you meeting with your suppliers to discuss win-win strategies to proactive address these industry trends?

No matter your industry, are you considering innovations, automation and technology to reduce costs to remain competitive?  Why not be in front of this wave so that you can be the market leader in your niche instead of racing to catch up? It always puts you in a worse position!

 

 



The Amazon Effect is Driving Dramatic Disruption

February 26th, 2018

Supply Chain Briefing

On February 15th, I participated on a panel discussion with Dan Vest, co-owner of Midpoint Bearing, BJ Patterson, CEO of Pacific Mountain Logistics and Jon Burgess, panel facilitator and VP of RedFusion Media at the Manufacturers Council of the Inland Empire’s Manufacturers Summit.  We had a great discussion about the disruption Amazon has caused in manufacturing and logistics circles.  

In looking at the Amazon Effect as a metaphor, manufacturers and distributors must respond to elevated customer expectations, rapid delivery requests, 24/7 service, and much more.  It is certainly driving massive changes throughout.  

For example, smaller e-commerce type orders are considered the norm which drives the need for quick and flexible changeovers, shipping flow changes (instead of pallets, there is a need for eaches), dramatic transportation and logistics disruption (consider how to ship eaches to multiple ship points vs. traditional truckloads to one ship point) and more.  Dan and BJ gave examples of how significantly Amazon is disrupting their businesses on a daily basis.  

Have you thought about how to raise the bar to stay competitive with the significant disruption flowing through the industry?

What Should We Consider and/or What Impacts Could Arise?
As I responded when Jon asked whether there are any other disruptors to think about in addition to Amazon: Definitely!  Sears was the Amazon disruptor several years back and lately all the news relates to whether they’ll make it at all.  No one was thinking about Amazon as a serious player 20 years ago.  It is wise to always be thinking about the next disruptor and how to successfully navigate your business.

This seems like a tall order – how to identify disruptors and figure out how to respond.  Instead of spending time to figure out the next disruptor, stay on top of the latest trends, companies, and economies impacting your business.  You’ll see them coming!  

Stay agile, hire and develop the best talent and keep an eye to the future.