Tag Archive: resilient supply chain

Walmart & Costco Moving Towards Farmer-to-Shopping Cart Strategies

May 1st, 2019

 

Walmart & Costco Moving Towards Farmer-to-Shopping Cart Strategies

The squeeze continues. During my Aerospace & Defense speech recently on the Resilient Supply Chain, the concept of vertical integration arose as Boeing and Airbus are expanding and squeezing the middle in a noteworthy fashion. Similarly, according to Journal Star Walmart and Costco are moving to eliminate the middle man by moving towards farmer-to-shopping cart strategies.

Walmart started bottling milk in its new Indiana facility. This move eliminated Dean Foods and their 100 dairy farmers and replaced them with 30 farmers and cooperatives. Walmart is controlling the entire supply chain from farm to shopping cart including transportation, a vertical integration strategy rarely seen to this extent and scale in agriculture. Similarly, Costco established a chicken farm to grow, slaughter and distribute chickens in Nebraska, eliminating suppliers like Tyson Foods and Pilgrim’s Pride. Both of these initiatives could create significant disruption as well as opportunity.

Are you staying comfortable, waiting to be disrupted or taking the proactive approach to create disruption?

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

Getting to the top and/or to a comfortable position and riding the wave isn’t a viable strategy if you wish to be around for the long-term. Stay up-to-speed on what is going on with your industry, competitors, customers, suppliers, region and more. Don’t hide your head in the sand. Instead, choose to take the realistic yet optimistic view and turn it into reality.

In addition, start looking at how to build an agile and resilient end-to-end supply chain. There is no telling when your supply chain might be squeezed or something will change. The more agile and resilient you become, the more successful you’ll be! If you’d like some tips for managing disruption, take a look at our resilient supply chain series.



Top Two Issues According to Wells Fargo Customers

January 18th, 2019

In listening to a Wells Fargo commercial banking executive’s speech, he mentioned that the two top issues as we head into 2019 according to clients are:  labor (shortages) and cyber-security. This isn’t surprising, given what our clients face. We cannot think of a client who isn’t experiencing some sort of talent shortage.  Luckily, the same is not true for cyber-security.  Yet, it is a relevant, pressing and serious topic. When it rains, it pours BIG TIME when it comes to cyber-security.  Are you proactively addressing these topics?

What Should We Consider and/or What Impacts Could Arise?
For talent and labor shortages, it is often more complex than our clients need “2 more people”.  Invariably, they might have the “right” number of people in total.  Yet. they may not have what they need.  One of the following is often the issue: 1) Skills aren’t allocated properly. 2) There isn’t enough of specific skills and more than needed in others.  3) Cross-training is lacking. 4) People are not working to their maximum (or even regular) potential.

One of the best places to start is to understand your situation.  Don’t think about whether you can afford it or where you’ll cut back to afford it.  Just start by understanding your situation. We often go into clients and find “hidden” talents. Actually,m it occurs more frequently than you’d think. The good news is that these “hidden” talents can often be reallocated for the benefit of the organization almost immediately – at least a lot quicker than hiring and assimilating new talent.  We also typically find people who are not working to regular, let alone, maximum potential. Why? Because they might be working in an area that doesn’t align with their best skills or they work for someone who is stifling their progress. Finding these hidden opportunities can avoid making new hires for the vast majority of clients.

Beyond talent, you had better protect your company from cyber-security threats.  It is as simple as “get an expert immediately if you aren’t already working with one”, no matter your organization’s size.  Small organizations are more likely to be attacked! I’m happy to refer you to a top notch organization. Contact me if you are interested.

Are you searching for these opportunities and addressing risks?  They will certainly create a more resilient organization. For additional strategies to create a resilient supply chain, check out our new series:

 



What’s Ahead for Supply Chain?

January 18th, 2019

To think about what’s ahead in supply chain, it is important to put it in perspective with what’s ahead in business.  Read our article, What’s Ahead in Business? for details on the key trends impacting business:

  • Importance of the customer experience
  • Taking the holistic view has become a “must”
  • Volatility is the new norm
  • The coming power of manufacturing and supply chain

Given these trends, we predict our most successful clients will be thinking about these themes in the end-to-end supply chain:

  1.  Manufacturing is the Place to Be: Manufacturers are uniquely positioned to thrive. I have to say, I love that manufacturing is getting its due. According to NAM, for every $1 spent in manufacturing, $1.89 is added to the economy which is the highest multiplier of any economic sector.  
  2.  Distributed Inventory Management will be Key to Manufacturing Success: In today’s Amazon-impacted business environment, the customer expects rapid, low cost delivery. Given that the “last mile” has also become “last minute” with customers changing their mind frequently, predictive, distributed inventory management has become a differentiator.   
  3.  Additive Manufacturing will Rise to the Top: Customers want customized products on the fly. Yet, distributors cannot stock everything near every manufacturer, end user and the like. 3D printing can achieve this goal.
  4.  Customized, Rapid Delivery with Amazon-like Service and Efficiency is the Norm: In addition to additive manufacturing, re-shoring and near-sourcing (locating close to customers) are viable solutions to achieve Amazon-like service. The question is how to be efficient, cost effective and visible while serving customers.
  5.  Amazon Prime for Manufacturers is More than a Pipe Dream:  Subscription based models are becoming relevant to manufacturing, just as to Netflix and ERP systems. According to my friend, colleague and author Robbie Baxter, the membership model is just as relevant in manufacturing in transitioning from a one transaction/one-way communication to an ongoing relationship with the customer with a constant stream of feedback.  
  6.  We are Moving to a Digitized Supply Chain:  To address customers’ elevated expectations while continuing to make a profit, manufacturers and supply chain organizations are moving to a digitized supply chain. Artificial intelligence, IoT, the smart factory, robots and more. Don’t embrace technology as a fad.  Instead, embrace technology as a way to achieve a result.
  7.  To succeed, We Must Create a Resilient Supply Chain: Disruptions and volatility abound. Customers expect more. Boards expect more. People are harder to find and retain. Creating a resilient supply chain enables a proactive response to the current environment.

What will you do to get ahead of the curve in the New Year?

  Did you like this article? Continue reading on this topic:

The Strongest Link in Your Supply Chain

What’s Next in Supply Chain?

Is Your Supply Chain Ready for Growth?



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: