Tag Archive: impacts

Manufacturing Adds the Most Jobs in the New Year

February 1st, 2019

According to Industry Week, manufacturing employment increased almost 300,000 over the last year!  This is after increasing around 200,000 the year prior – more than a 40% increase. This is much more significant than the numbers alone convey because, according to the National Association of Manufacturers, for every $1 spent in manufacturing, $1.89 is added to the economy.  Manufacturing is hot and relevant.

Not only is manufacturing relevant to the economy, it is relevant to the customer experience.  Have you thought about how much more flexible you can be with your customers’ desires if you can manufacture on the fly? There won’t be a better time to ride this wave to success. Are you debating or jumping on?

What Should We Consider and/or What Impacts Could Arise?
Whether you are in manufacturing or related to manufacturing or impacted by manufacturing, you should pay attention. As manufacturing surges and takes on a new relevance in the economy and to your ability to provide a superior customer experience, you might have opportunities to grow and scale your business to new heights. Have you thought about how you’ll take advantage of these opportunities?  Will you be a follower or an innovator?

At a minimum, being informed about manufacturing and supply chain industries, latest trends and opportunities seems like a good idea.  Join an organization such as the Association for Supply Chain Management (ASCM/APICS) and participate with classes, tours and webinars, read articles on the topic (there are hundreds, if not thousands, in the archives), listen to experts, pick up the Wall Street Journal or attend an industry event. Why not kick off the New Year informed?  Being informed is part of what’s needed in creating a resilient supply chain. For additional strategies to create a resilient supply chain, check out our new series:



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?

 



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!

 

 



Big Grocery Chains Ramping Up Pressure on Food Suppliers

January 23rd, 2018

According to a Wall Street Journal article, Kroger (#2 grocery chain in the U.S.) and Walmart are ramping up pressures on food suppliers.  There is too much lost money due to shortages!  Thus, the industry is waking up to the critical importance of on-time delivery and customer service especially as they compete with on-line retailers like Amazon.  

Kroger is fining suppliers $500 per order that is more than 2 days late to any of its 42 stores.  That can certainly add up!  And, Walmart is charging 3% for late deliveries.  This could prove transformative.  

What is Your Delivery Performance?

How is your company performing in terms of delivery?   No matter the industry, delivery performance is having a significant impact on scalable, profitable growth – or lack thereof.  My best clients are paying close attention and finding ways to get ahead of this curve.

What Should We Consider and/or What Impacts Could Arise?
Let’s start at the beginning.  Do you know what levels of service you provide to your customers?  Is it the same level to your A customers as well as your C customers?  Find out.  

On-time-in-full (OTIF) is rapidly becoming the standard for measuring this performance.  If you don’t have a metric, just start with this one as a base.  Or, worst case, start with whatever you can measure rapidly – and evolve over time.  Of course, service alone won’t cut it.  Lead times and other factors enter the equation….

Staying Competitive
Clearly, if you are not high performing in the food and beverage industry (and consumer products in general), you will not stay viable anymore.  Amazon will be happy to fill the gap.  However, since I work with small and medium, family-owned manufacturing companies to  private-equity backed firms and large multi-billion dollar enterprises across a wide variety of manufacturing and logistics industries, it is quite clear that food and beverage is not alone!  

Have you been tested yet?