Tag Archive: strategic advantage

The Amazon Effect is Still Going Strong!

July 1st, 2019

The Amazon Effect remains top of mind with CEOs. Whether they compete directly (which is less than 1% with my clients), supply or distribute for Amazon (which is a slightly higher percentage) or are just impacted by the Amazon Effect, it is a major source of concern and/or opportunity. Have you thought about what Amazon is doing lately and how it might impact your business? Better yet, have you thought about becoming the disruptor?

Here are a few of the latest headlines about Amazon (all in the last few days):

  1. Kohl’s will accept Amazon returns across the board starting in July – The pilot programs in Los Angeles, Chicago and Milwaukee have been successful. Kohl’s and Amazon see this as a win-win.
  2. Amazon announced that one-day free shipping will be the standard for Prime members – It is very hard to go backwards once you get accustomed to a new level of service. All organizations watch out!
  3. Amazon is interested in buying Boost from T-Mobile and Sprint – There is no telling what Amazon is thinking of disrupting next.
  4. Amazon seems to be saying it isn’t a retailer – It appears as though the threat of Amazon purging thousands of smaller vendors from its core business is coming true. Stay tuned…
  5. Amazon makes a big splash in the travel industry – In India, Amazon will offer flight booking services.

Amazon gets a ridiculous number of headlines. In the interim, one of the last Sears stores in Phoenix had a massive closeout sale recently. Sears used to be the Amazon of the times 50 years ago but lost its way with a few strategic missteps and lack of innovation. Waiting around for Amazon to determine your course is not a wise move. Instead, think proactively about your strategic advantage and how you’ll get out in front of the crowd.

Think about what Amazon and other competitors do not do well.  Find a way to capitalize on these opportunities. Of course, you’ll have to adhere to the new model of doing business – rapid deliveries with short lead times and high tech opportunities.  Find what is unique to you and your product or service and drive differentiation in your market segment.

We find that there is significant change occurring across the board. Perhaps the reason some companies are vertically integrating is to do what Amazon cannot do completely at this point: take control over the complete supply chain. Amazon seems to be pursuing this strategy as well when it comes to transportation infrastructure although last mile delivery is quite the challenge. If you’d like to get an assessment of your business and profit opportunities as it relates to the Amazon Effect, please contact us.

 

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

UGG Founder, the Amazon Effect in Healthcare & Why Demand is Key

The Resilient Supply Chain: What If You Sell More?

 

2019 Predictions Document

Find out how pricing relates to 2019’s predictions. If you missed our 2019 Predictions Document, download yours here:

 

 

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The Value of Collaborating with Strange Bedfellows

February 19th, 2019

The topic of collaborating with strange bedfellows has recently come up repeatedly. There can be significant value and strategic advantage created in collaborating with unlikely partners if there are clear objectives, trust and an open mind. Just think about Amazon’s collaboration with the U.S. Postal service. Amazon is clearly famous for rapid, same-day, even Sunday deliveries whereas the U.S. postal service is definitely not known for agility and speed yet they understand and are proficient with the ‘last mile’.

Kash Gokli & I host the Harvey Mudd executive roundtables, and the topic of collaborating with competitors as well as unlikely partners arose in our recent roundtable. In the ‘right’ situation at the ‘right’ time, it can maximize service and value. Also, I am a Board member of the Inland Empire Economic Partnership and member of the Southern CA Logistics council, and this topic of collaboration has come up on multiple occasions. We recently led a collaboration session with 10 academic institutions. Of course, they all compete from several respects yet there are opportunities for 1+1+1 = 25. And this is just the beginning. When it is put together with collaborations with industry and government, perhaps 25 can turn into 100 or 1000. Last but not least, I met with UCR students last night to encourage their involvement in manufacturing and supply chain and invite their participation in APICS-IE. We had this exact conversation about collaborating with their competitors (Cal Poly Pomona, CSUSB etc.).

Are you exploring collaborations with strange bedfellows?

One tip to implement this week:
Perhaps it is as simple as opening your mind to new possibilities. Think about the person or entity you would most want to avoid joining your collaboration. What if you gave it a chance? For example, I remember a distinct time a few years ago when I was involved with a group. Someone in the group brought up a new member who would be the last person I’d want to join our group. I felt like I was collaborating with a diverse set of people, and we were making great progress. I just didn’t like this person. Although I didn’t say it, I cursed my bad luck on the way home because I just wasn’t excited about collaborating.

Fast-forward several months and it turned out that the new participant added unique value that probably would not have occurred otherwise. Although I still wouldn’t want to have dinner with this person outside of our work together, I’m glad I gave it a chance or I would have missed out on fantastic benefits and a learning opportunity. We have all been there, and sometimes we are right to be hesitant. Can you achieve a shared goal? Is trust possible as it relates to the objective? Assuming so, I vote for exploring the opportunity. Perhaps it is the next Amazon/ U.S. Postal Service collaboration.

Collaboration goes hand-in-hand with resilience. In today’s marketplace, there is no doubt the resilient will thrive. If your key supplier or customer is devastated by a natural disaster, power outage or unexpected shutdown or other disruptor, have you thought about collaborating with strange bedfellows to serve your customers? You cannot wait until the issue occurs! Creating a resilient end-to-end supply chain is of paramount importance.

For more information, check out our new resilient supply chain series and contact us if you’d like to have an assessment of your organization.



The Highest # of Factory Jobs Since 2008!

May 1st, 2018

Supply Chain Briefing

According to Industry Week, we have the highest number of factory jobs since 2008!  We have reached over 12.6 million people employed by the sector. This is all the more impressive when we consider the significant rate of automation and deployment of technological advances occurring the last several years.  

In the era of the customer, executives are locating manufacturing in close proximity to their customers. Since customers expect rapid deliveries and high levels of customization, it is making more and more sense to locate manufacturing in Southern California and especially the Inland Empire with lower costs, extra space and access to top talent.  Are you prepared to grow?

What Should We Consider and/or What Impacts Could Arise?
Since manufacturing is transitioning from a necessarily evil into a strategic advantage supporting superior customer service, it is well-worth thinking about how you are positioned.  A

re you leveraging the opportunity if you are well-located by a significant customer base? What can you offer to provide customized, specialized experiences for your customer? Undoubtedly, the executives thinking this way will surpass their competition.  

Similar to retail shopping – if the store you go to doesn’t have what you want customized for you when you want it, what do you do? Buy from the competition! We don’t wait for products to arrive on a boat from China patiently.

Take note if you would pay more for customized, quick service.  I find that I am willing. Are your customers?