Tag Archive: marketplace

Are You Waiting Too Long to Future-Proof?

February 10th, 2020

Although most economists do not see an immediate recession, there are plenty of concerning signs along with global volatility. Unfortunately, concern alone can create a recession unrelated to underlying factors. Meaning, we could have terrific fundamentals and results yet still go into a recession if fear takes over! I wouldn’t want to be dependent on avoiding fear in the marketplace. Would you?  This is why it’s important to future-proof manufacturing operations and the extended supply chain!

The worst thing you can do is wait for a recession to act. It is similar to a natural disaster. For example, when my house burned down in a fire, I was fortunate that it was an isolated incident. I was able to find alternate housing nearby while the house was rebuilt. I was also able to gain priority with a builder, etc. Instead, if I was caught in one of the devastating California fires, I would be one of many people struggling with the aftermath. Of course, I would be a pebble in a sand quarry in that case. The same is true would be true with a recession, global unrest or a natural disaster. Have you thought through how you will continue operations to satisfy customer demand?

One Tip to Implement This Week:
We’ll make this quite simple: Stop and determine if you have backup plans at a minimum.

Think through the following:

  1. Sources of supply
  2. Resources, skills and trusted advisors who support the business
  3. Operations
  4. Logistics infrastructure
  5. IT and ERP system infrastructure

What are you going to do about it? Are you willing to invest in future-proofing? I’d be willing to bet that any executive willing to make prudent investments in future-proofing might have to take a temporary ‘hit’ with the initial investment but will surpass the competition by a minimum of 10 fold in the future.

For example, one of our clients thought about what they should do to get ahead – not just survive. When the competition was increasing capacity in China, our client was moving out of China and into Vietnam. They were ahead of the curve and had far less roadblocks and bottlenecks along the way to overcome. There is definitely something to be said about being early to the party and leading the way.

Think about taking a calculated risk to lead instead of follow. In today’s Amazon-impacted world, you cannot afford to be a follower!

 



Amazon Disrupts Again

April 5th, 2019

According to Bloomberg, Amazon disrupts again. They have abruptly stopped selling products from their wholesalers and are instead encouraging suppliers to sell on their marketplace, transferring the purchasing, storing and shipping of products to the supplier. The marketplace business is already estimated at $250 billion in value which is more than double the online retail business. They also pulled volume from some suppliers less than $10 million annually. If you are in either of these positions, this could be a substantial disruption especially with no notice!

According to the Journal of Commerce, Amazon is also disrupting container shipping with its increased use of its ocean forwarding arm. For example, with its non-vessel-operating common carrier (NVO), Amazon is gaining greater control over its internal supply chain but the key is whether it is thinking about building a supply chain platform.

Amazon isn’t the only disruptor. Are you proactively thinking about navigating disruption?

What Should We Consider and/or What Impacts Could Arise?
Hardly a day goes by without some sort of disruption, natural disaster or other event such as the Boeing 737 Max concerns. There is no way you can be prepared for every potential issue that will arise. With that said, it is remiss not to consider the most likely and relevant risks. Do you have a process to incorporate these into your strategy and execution plans on a frequent basis? Gone are the days of the 5 year strategy, updated once a year. Business is moving at a much quicker speed!

In addition, start looking at how to build an agile and resilient end-to-end supply chain. Start internally. Are your people prepared for the daily, weekly and monthly changes most likely to impact your business? Do they have backup plans? Or will it take a lengthy approval process to get a critical decision made to navigate disruption? Don’t just assume you are covered. Go and find out. If you’d like some tips for managing disruption, take a look at our resilient supply chain series.

 



Motocross, the 100% Brand and How Global Distribution Scales

August 20th, 2018

I recently attended the San Diego Distributors and Manufacturers (DAM) group of ProVisors. We had an engaging discussion with Francis Costello, COO and CFO of 100%, a well-respected brand in motocross and mountain biking.  He made a very interesting point about how the value of distribution scales and supports “getting big quickly”.

 

Francis generously provided insightful lessons learned in scaling distribution:

  1. Don’t trust your gut. (In essence, it isn’t enough to run the business) 
  2. Understand the rules and regulations.  
  3. Contracts vs. trust (neither is sufficient alone) 
  4. Choose wisely. 
  5. The only constant in change (after all, Amazon, Alibaba and more continue to change the scene).

Interesting to note that these are good rules regardless of your business!

One tip to implement this week:
Have you thought about scaling your business?  With the tremendous growth in manufacturing and distribution businesses in today’s marketplace, it is certainly worth considering.   In Francis’ case, he is thinking about how to scale quickly and globally. There was no better option than distribution in his case at this point in time (although it can change down-the-line).

Have you thought through your options to scale? There are more than one! Start there.  

While evaluating these options, keep his lessons learned in mind.  Although they pertain to scaling through distribution, I see them as uncommon common sense guidelines to use regardless of which option you choose.  They are certainly worth thinking through as you might find your default option isn’t the best.