Tag Archive: the Amazon effect

Manufacturers and Distributors Feel The Amazon Effect

September 30th, 2015

APICS 2015 Lisa Anderson

My clients and colleagues know that I frequently talk about the value of people and especially engaged employees. I even have a newsletter, Profit through PeopleSM sharing tips about how to leverage all aspects of your organization to improve overall company performance. Why stress people so much? Because they are going to be critical to you and your company in raising the bar so that you can meet, and more importantly surpass an entirely new and elevated set of customer expectations, what I call The Amazon Effect.  I define The Amazon Effect as:

The pressure put on companies to provide superior customer service, rapid deliveries, and higher accessibility to products/services is known as the Amazon Effect. Achievement of these factors can lead to higher growth, more loyal customers and opportunities for margin improvement, but not meeting these ‘Amazonian’ standards can quickly lead to a company’s downfall. Think of this as a game of poker, the ante to just get in the game is 24/7 service, easy-to-use ecommerce Website, same / next day shipping and easy return processes.

It’s not enough to just survive any longer, businesses need to thrive. My research tells us that customers want products and services delivered immediately (24 hour turnaround is no longer sufficient) with a 24/7 viewpoint, increased levels of customization, and extra mile service. Manufacturers need to create a ‘sweet spot’ of people, processes, plans, profit drivers and priorities to create a customer service edge.

Attending APICS 2015 in Las Vegas, October 5-7, 2015?

Plan on joining my session entitled Priming Your Supply Chain for The Amazon Effect on Tues., Oct. 6 at 8:00 a.m. at the Mirage Hotel in Las Vegas, Nevada. Ideal for attendees from manufacturing, operations, distribution and supply chain, I will be sharing key strategies on where and how to make improvements to stay competitive and relevant to customers. I will also share case studies on how companies were able to re-focus their energies on a more customer-centric operation netting more sales at higher yields.

Learn more about APICS 2015 or register for my session.

Can’t Make the APICS 2015 Conference?

I am  currently working on a book entitled “The Amazon Effect” detailing the business roadmap to thriving in an ultra-competitive marketplace. I share with readers how to make meaningful business transformations to focus on customer service, improve planning with SIOP and ERP, leverage technology and profit through the people in your organization and supply chain. Sign-up in advance for “The Amazon Effect” and I will notify you when it is released.

Learn more about The Amazon Effect with these other articles:

Slashing Lead Times to Counter the ‘Amazon Effect’

The Amazon Effect: Which Came First? Service or Product Offering?

The Amazon Effect: Create a Customer Service Edge

 



The Amazon Effect

April 3rd, 2014
Understanding the Amazon Effect on manufacturers and distributors.

Although I’ve been mentioning the Amazon effect a lot lately, I thought it deserved it’s own priority. It’s become the phrase that means “exceptional service” (Sunday deliveries, no-hassle refunds), rapid delivery (same day shipping is becoming commonplace) and the latest technology (drones).

It syncs up 100% with what I’m seeing at my manufacturing and distribution clients. Customers are no longer satisfied with on-time deliveries, they want reduced lead times and partnership type service. The norm in several industries such as aerospace is for the supplier to manage deliveries for the customer, keeping the customer at high levels of service with minimal inventory. How can you achieve the Amazon effect?

1. 24/7 – e-commerce is an assumption for all types of business. Customers should be able to review products, look up order status etc. anytime.

2. Extra mile service – How special do you feel when you interact with your supplier? Have you ever gone into a high end restaurant and requested an item they did not have in stock? Did someone run to a competitor to get it for you?

3. Rapid delivery – You cannot get much faster than same-day delivery! How about Sunday deliveries? Will your employees answer the phone for the customer that calls after the end of their day?

4. Collaborative programs – What is better than taking over the job for your customer? Keep them supplied with the right product in the right place at the right time and make it seamless to them. What’s not to like?

5. Suggestions of value – Customers think they know what they want but often do not know what they need. How can you give them more than they expect (or a better solution than they imagine) that aligns with their unspoken (or not-yet-thought-of) needs?

6. Friendly – As obvious as this seems, it doesn’t always occur. Do all of your employees act as if every customer, supplier and colleague is a key customer?

I am conducting a research study that measures the impact of the Amazon effect on customer expectations and delivery of goods. I welcome you to participate and share your observations and insights on how delivery and service standards are changing as a result of Amazon. Please take the survey here http://survey.constantcontact.com/survey/a07e90lre14hsdp8fre/start.

 

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

How do We Create A Customer Service Edge?

Why Customer Service Must be #1

 Lisa Anderson - The Manufacturing Connector



Hot Supply Chain Trends

December 10th, 2013
Noticing hot supply chain trends first is a great way to leverage emerging trends and stay ahead of the competition.

Noticing hot supply chain trends first is a great way to leverage emerging trends and stay ahead of the competition.

An often overlooked secret to success is to be a front-runner in identifying and leveraging emerging trends. Since I work with manufacturers and distributors from small to large and local to global, it behooves me to pay attention to what is in common among my best clients. Undoubtedly, those who jump on the “right” opportunities leave the competition in the dust.

Supply chain has been gaining momentum in executive suites around the globe. According to PwC’s Global Supply Chain Survey (2013), when organizations focus on supply chain excellence, they can achieve 70% higher performance. Thus, paying attention to the emerging supply chain trends can be not only interesting but also can result in increased business performance. The top few include: 1) Demand driven. 2) The Amazon effect. 3) Collaboration remains cornerstone. 4) Leverage supply chain technology. 5) The skills gap.

1. Demand Driven: Over the last few years, demand driven supply chains have been gaining popularity. But what does it really mean? I’ve found the essence to be simple – start with your customers’ demand.

Throughout my 20+ year career as a global business consultant and as a VP of Operations & Supply Chain, I’ve been responsible for, involved with or partnering with clients to improve demand and supply planning results, and so this topic happens to be in my sweet spot. Undoubtedly, demand driven supply chains are the wave of the future.

It can start off as simple as thinking through historical forecasts and expand in complexity and collaboration from there. The best companies are providing demand data from deeper in their supply chain and working on collaborative planning programs such as auto replenishment, vendor managed inventory and collaborative ordering programs. It doesn’t have to be complex – start by picking up the phone to talk with your customers.

2.  The Amazon effect: I spoke on a panel earlier this year entitled the Amazon effect, and it has become a term thrown around in conversations. Amazon’s plans are to have a distribution center within 5 miles of most major U.S. cities – a game changer! And, didn’t we just hear that Amazon and the US Postal service have teamed up to deliver on Sundays! They are taking service and e-commerce to the next level.

Customers expect to be able to shop 24/7 and gain exceptional service along the way. Manufacturers and distributors better get on the bus before it passes them by! How can we set up our warehouses to handle bulk, piece parts, etc.? What technology do we need to ensure full integration so that we can achieve shortened lead times? If there is one item in common among all the executives I work with, it’s that no one has time. We must take time out of the equation, just like Amazon is doing.

3.  Collaboration remains cornerstone: An often overlooked secret to success is to collaborate. Start in your company – do you partner with other functions in your organization? Simple programs like S&OP (sales and operations planning) create a process of collaboration and yield substantial results. How about internal best practices?

Beyond internal opportunities, we have the ones most discussed at manufacturing and distribution conferences – supply chain collaboration programs. Imagine what can be achieved by partnering with customers and suppliers. I’ve seen collaborative R&D programs yield margin improvement and increased sales; collaborative planning programs yield substantial cash flow increases in combination with efficiency improvements; and the list goes on.

4.  Leverage supply chain technology: Although one of my service lines is to help clients select the optimal system that aligns with their business objectives, I am not a fan of technology for technology’s sake. I often see clients get tied up in a maze of complication while accomplishing nothing – or worse, service declines which is the kiss of death.

On the other hand, the clients who carefully select the appropriate technology to support their business objectives and leverage the core functionality to dramatically improve results are able to leapfrog the rest. Technology is an enabler. For example, consider the following popular technologies which can achieve significant leverage if utilized strategically – e-commerce, CRM software (customer relationship management), advanced planning systems, warehouse management systems and supporting technology etc.

5.  The skills gap: My APICS (the leading professional association for supply chain and operations management) chapter recently hosted a symposium on the skills gap as it is prevalent with the manufacturing and distribution companies in the area. As supply chains have become complex (extended in length while considering items such as risk, technology etc.), it has become harder and harder to find top talent.

Especially as the skills gap worsens as folks continue to leave jobs for greener pastures for the first time since the recession and as the baby boomer generation begins to retire, those companies who are ahead of this critical issue will thrive.

Observing supply chain trends is important but it is bedrock to success to develop strategies and plans to utilize this information in a way that will help your business succeed. Do you have a team in place to think about how to leverage the top supply chain trends?

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Supply Chain Strategy: Formula for Success