Is Inertia Your Weakest Link?

[Sandy Vosk]

It's hard to believe that we're halfway through 2009 and still waiting for the US economy to rebound. As President Obama and the Congress continue to debate the best way forward, most business executives are working five times harder to keep their current customers satisfied and win new business. Some are so buried in their day-to-day activities and concerns about surviving that they are hesitant to take on anything new that isn't "mission critical" to the enterprise. Although this is understandable and may make sense for the short term, it may not be the best strategy for the long term.

There are a number of ways supply chain executives can gain immediate improvements to their bottom-line and improve their competitive advantage so they can survive and thrive in this economy . Although most companies have made significant efforts to reduce costs, there are a number of areas executives can target for additional savings. Some of the largest opportunities exist in the following areas:

• Telecommunications - the monthly costs associated with maintaining voice and data networks
• Technology - hardware, software maintenance and labor
• Administration - payroll processing, credit card processing, shipping costs, etc.
• Wireless - mobile phone bills and device management

But won't this cost a lot? Believe it or not, there are companies who specialize in finding excessive charges going back 5 years and do not charge a dime upfront. Their business model is to split the savings with their clients 50/50. Others may charge a small fee, but uncover huge savings with a short payback period, sometimes in just a few months. These savings can go directly to the bottom-line or be used to offset investments in strategic initiatives that would not be funded otherwise.

Another way companies can gain significant benefits is by looking at the following. Although these will require some investment, but the potential payback is enormous in both reducing costs and increasing revenues:

• Inventory Optimization - having the right product in the right place at the right time
• Asset Tracking - utilizing barcode scanning, GPS and RFID
• Business Intelligence – having accurate and timely dashboards and reporting from diverse manufacturing, accounting and sales systems
• Collaboration – improving communication and information sharing with customers, suppliers, agents and partners.

A study that was sponsored by Verizon and Microsoft in 2007, found that effective collaboration was twice as significant as a company’s aggressiveness in pursuing new market opportunities and five times as significant as the external market environment.

The bottom-line is don't let concerns about the economy stop you from taking action that can result in immediate and long term benefits for your company.

"Worry does not empty tomorrow of its sorrow; it empties today of its strength." Corrie Ten Boom

Sandy Vosk is President & CEO of Allied Tracking Systems, Inc. a NJ based technology corporation with a specific niche in supply chain solutions. ATS works with executives at manufacturing, warehousing, logistics and retail companies, helping clients significantly improve their operational efficiency, profitability and customer service. For additional information, please go to allied-tracking.com

[Dr. Edward Knab]

You make an excellent point, many if not most senior executives find themselves frozen by the current economic uncertainty. As their sales dropped during the downturn, they reduce staff, cut benefits, reduced travel expense to minimum, eliminated training programs, and cut spending in areas like technology, market research, and product development. Now that they've taken all the "standard" actions that executives taken during a downturn they now find themselves aimlessly waiting for some type of oracle or sign that the recession is over and everything has returned to normal, as it always has been.

Unfortunately, it is never going to happen this way. The world is fundamentally changed, the change has been significant, and the world we return to will be significantly different than that of past memories. Things will never be the same! Never Ever!

Executives must come to grips with this new reality and stop thinking, downsize, downsize, downsize. The new world is going to be significantly different than the past, capital will become a scarce commodity forcing companies to keep inventories lean and flexible, travel will be replaced by video conference, more individuals will work from their home, remote offices will all be eliminated, mega malls will become ghost towns and new and more efficient technology will be integrated into mainstream businesses. The Big Box retailers are going to find their cost model is to high and they can't afford to curing lost their inventories.

The winners in this recession global recession are going to be those organizations that adapt to the new reality quickly and efficiently. Will this happen overnight, likely not, but it will happen quickly and those who are not prepared will be left behind.

This is not the time to act like an ostrich with your head in the sand waiting for things to get better. Winning companies will be looking at streamlining their supply chain, cutting redundant cost, and implementing systems that can rationalized inventories across the entire globe. They will use this time to get a foothold in new markets and globalize their business. They should be looking today for strategic partnerships, joint ventures, and new relationships that deliver products and services at significantly lower cost.. The winning companies will use this downturn to fundamentally change the way they do business; they will implement Web 2.0 technologies and use social media a manner that allows consumers to buy direct.

Executives are paid to provide leadership within their organizations and you can't do that with your hands in your pockets. Companies need to strategically think about how they can deliver goods and services for less, efficiently in the future and pull their wallets out and fund of the projects that will provide tomorrow's profits.

If you or your organization finds itself waiting for things to get better call Supply Chain Experts, we will provide you with unique solutions to supply chain challenges that will prepare your organization for the new reality.

Dr. Edward F. Knab
Productivity Constructs, Inc.
800 660 8718 office
949 413 7333 mobile
[e-mail]
www.productivityconstructs.com

Dr. Knab is an academic practitioner and seasoned Global Supply Chain expert whose company, Productivity Constructs, is focused "helping companies optimize people, processes and performance to achieve their full potential.." Dr. Knab can be contacted for speaking engagements, coaching, or consultation at [e-mail], [e-mail] or www.edwardknab.com.


Tags: chain, supply, change, design, efficiency, financial, forecast, inventory, leadership, manufacturing

[Pat Lupica]

Great comments. No doubt, hard times require hard decisions, and sometimes that means putting things on hold. When it comes to technology though, advancements are being made so fast that if a company does not keep up, it will be at a disadvantage when things pick up again – unless of course you are the only player. Being really smart in this area could determine who comes out on top when the dust settles.

I also agree that today is not the same as yesterday. Things are different, and companies need to think and act accordingly.


If you or your organization finds itself waiting for things to get better call Supply Chain Experts, we will provide you with unique solutions to supply chain challenges that will prepare your organization for the new reality.