The 2010 holiday season was a busy one. And judging from the retail executives that I’ve talked to recently, plus the early numbers from sales, it looks like this will be the best retail season for this industry since before the Great Recession.

I’ve also had several conversations and done a lot of reading about the continuing growth of online shopping and the ease of having packages delivered right to our doorsteps – no crowded malls, no standing in line and no looking for that last spot in the mall parking lot. This year, more of us decided to park ourselves in front of our computers and buy our gifts with a click of the mouse. I personally never entered a store.

According to a MasterCard Advisors SpendingPulse report, consumers spent $36.4 billion online this holiday season – a significant 15.4% increase from last year.

So with e-commerce on the rise, how are retail companies handling the increase? E-commerce has become such a significant portion of total sales that the entire supply chain strategy is being reassessed, making e-commerce one of the Top 11 Priorities for Profitable Growth in 2011 for the retail industry. From network analysis, DC optimization, and improved shipping practices, the retail supply chain is focusing more on direct-to-consumer service.

At the same time, the new technologies that are pushing e-commerce are also changing the buying habits of consumers, giving them instantaneous information and access to products. Adapting to this wave of increased consumer intelligence is another top priority for this industry in 2011. Retailers who adjust to meet the needs of their customers will see the payout for years to come.

Take a look at other top priorities for the retail industry in 2011 and see how yours compare. Is your company prepared for the challenges and opportunities of the upcoming year as you work to achieve profitable growth?

What do you plan to focus on in 2011?

Happy New Year and Go!Go!Go!

Jim

Resources:

Top 11 in 2011 Priorities for Profitable Growth 

Photo credit: alancleaver_2000 

I am looking forward to the New Year with much anticipation. And I am sure that we are all glad to hear the recent news that consumer sentiment is on the rise and spending is expected to continue.

As consumer products companies prepare for the coming months, one of their biggest challenges is trying to stay ahead of consumer buying trends. This is one of the big challenges noted in our consumer products industry list of Top 11 Priorities for Profitable Growth in 2011.

Consumer buying trends are influenced by three main drivers: consumer confidence, the economy, and product changes. As the economy strengthens, consumers are more likely to purchase more and higher priced goods.

The ability to understand and react to consumer buying trends as early as possible, before they become obvious, creates a huge advantage.

Organizations that are thinking ahead of the consumer are also staying ahead of the competition. Check out the other trends and priorities on the Top 11 list to see what consumer product companies can expect in 2011.

Go!Go!Go!

Jim


Resources:

Top 11 in 2011 Priorities for Profitable Growth 

Photo credit: Amagill 

Although it was pretty cold and really early in the morning (or late at night, depending on your point of view), I know a few intrepid souls who woke up (or stayed up) to watch the total lunar eclipse this past week.

Even though the heavy clouds over the local area here in North Carolina dramatically parted just in time to witness the eclipse, it was still too hazy for even binoculars to assist in viewing it with more than minor detail.

The eclipse is something that was predicted far in advance, and it was sure to occur. Even so, the people I know in my local area who tried to view it did not get to see much of it, although they tried very hard. The eclipse was certain to happen, but the viewers who wanted to see it could not be certain they'd have a fantastic view of it. 

Hearing about this experience reminds me of the winding down of the Great Recession and the uncertainty that company leaders are experiencing today.

The only thing that seems to be certain is uncertainty. The cloudiness and haziness force us to give up predicting things and do our best to work toward ensuring profitable growth. This is especially true going into 2011, as many of our important priorities before the recession had to be pushed to the side so we could totally focus on cost reduction and weathering the difficulties the economy presented.

To help companies of various industries and sectors see a little better through the fog, we at Tompkins have compiled lists of the Top 11 Priorities for Profitable Growth. I hope you will review them so your company has a brighter future, and that it illuminates what 2011 will bring.

I am going to highlight each of these Top 11 lists over the next month in a series of blog posts, including lists for retail, automotive, consumer products, food & beverage, high technology, LSPs, merger & acquisitions, the service supply chain, and pharmaceutical & medical products. Each area has its own priorities for profitable growth, as well as a few major overlapping concerns.

Top 11 Priorities for High Technology

For example, in the high technology industries, there is great potential for profitable growth in the area of sustainable business. E-waste is a problem that requires innovation to solve it, as each new generation of high technology (such as the switch from 3G to 4G cell phones) naturally means that too many old cell phones end up in landfills, creating pollution.

High technology companies are already using reverse logistics and other supply chain solutions to the problem, including better product design and recycling programs for their products.

Also on the list of top priorities in high technology – globalism and emerging markets. Companies around the world are gearing up to sell to the growing consumer base in China, and this will be a busy playing field for high-tech in the next year.

Be sure to visit the Top 11 website and get started on what your 2011 priorities will be. I look forward to a year of profitable growth for your company!

GoGoGo,

Jim


Resources:

Download the Executive Briefing - Uncertainty is Certain: Perceptions of Future Risk on the Rise 

With all of the changes and unexpected challenges we’ve been through in the past few years, there is little reliable information to go on when planning for the future. Gone are the days when history alone was used to understand the future; today, businesses have to plan for uncertainty and learn how to best lead through it.

In an effort to gauge the level of uncertainty in businesses today, the Supply Chain Consortium recently conducted a survey about its impact on supply chains. The resulting executive briefing, Uncertainty is Certain: Perceptions of Future Risk on the Rise, shows that supply chain leaders are overwhelmingly more uncertain now than they were one or two years ago.

The events during the Great Recession – coupled with the precariousness of the near future – are undoubtedly making forecasting, budgeting, business and supply chain planning and other processes that are dependent on historical information a bigger challenge.

A diverse array of respondents indicates that uncertainty mainly impacts the supply chain in four ways:

1)    Added costs;

2)    Increasing inventory levels;

3)    Increasing lead-times; and

4)    Reducing speed to market.

Survey respondents also tell us that the highest level of doubt is occurring in supply chain processes such as planning, sourcing, sales and customer service, and transportation.

Of course, businesses are also concerned about the initiatives impacting government regulations and mandates, forecasting, and technology

I know from talking with my associates that most folks have felt the impact of uncertainty in one or more of these ways, but what other impacts have been felt in the supply chain?

To find out, view the full Uncertainty is Certain: Perceptions of Future Risk on the Rise executive briefing. Having a better understanding of how uncertainty is impacting companies today and how to lead through (but not manage) it will help you make more sound decisions in 2011.

What plans have you made to deal with uncertainty in the coming year? How are you assessing risks in your supply chain?


GoGoGo!

Jim

Photo Credit: bfishadow

Once in a while in this blog, I examine words and phrases that we use every day in business and try to remember the origin of their real meanings. And as it often goes with business jargon, we overuse it so much that the actual meaning gets lost.

I have noticed lately that some prominent news web sites that cover high technology, including Forbes and the Wall Street Journal, are changing their categorizations to just say “technology.” The “high tech” category has disappeared. Are you noticing this too?

I think this is happening because what was once considered “high technology” has become fairly commonplace. We’re buying and reading books on inexpensive portable devices, and we’re able to carry around an entire library on one small device. Companies that make this technology, such as Apple, used to be minor players in the general marketplace; now they are major movers and shakers with incredible influence.

In the supply chain business, we have traditionally considered key segments of the high-tech industry to include contract manufacturers, semiconductors, consumer electronics, and telecommunications. It may well be time to redefine this definition based on how technology has evolved.

What high technology is there left in the world? What’s the distinction between high technology and technology? I think the addition of the word “high” indicates that it’s not supposed to be just for anyone to use. It is so advanced that it sits on a shelf just out of the grasp of most people. But this distinction is certainly beginning to fade.

The more democratized our technology becomes, the easier it is for anyone to use. For example, there are software coding languages created just for kids, so that they can program their own software to solve problems.

Are you seeing this phenomenon occurring in other places, as in the way we refer to technology changes? What do you see happening in the future?


Go!Go!Go!

Jim


More Resources

Top Ten List of Issues/Opportunities Facing High-Tech Companies

Photo Credit: WebWizzard

The day after this post was published on Dec. 8, the US House of Representatives passed the food safety act, which helps the Food and Drug Administration prevent foodborne illnesses. The legislation has already passed in the US Senate. - Jim

Food producers, wholesalers, grocers, associations and others involved in food and beverage supply chains have made real progress this year in the fight against food-borne illnesses.

Salmonella, botulism and similar illnesses are serious business and have resulted in the loss of human life, an increase in health care expenses due to sicknesses, and high costs to the industry’s image and bottom line.

In fact, a 2010 report conducted by Ohio State consumer estimates that food-related illnesses cost the US $152 billion annually. You can browse a map that shows costs per state and per case, as well as the number of illnesses per state at the Produce Safety Project’s website.

Increased food safety is particularly important for fruit, vegetables and produce that are not always cooked before being eaten. So understandably, produce has received the bulk of the attention lately and is getting some special attention in the regulatory arena.

Basic produce traceability law has existed in the US since the 1930s, and the European Union also legally requires traceability for food. The Produce Traceability Initiative, though voluntary, is now being endorsed and followed by many companies as a way to ensure electronic traceability through the produce supply chain. The goal is to have every case of produce traceable by 2012.

This is good news because when illnesses do break out, every link in the supply chain that was involved in moving produce from the field to the kitchen table is examined. Without traceability, this is a time consuming process that can cause others to get sick in the time it takes for the contamination to be located.

Of course, big news on the food front in the last month is that the Food Safety Enhancement Act of 2009 has advanced in the Senate. This bill imposes new planning and record-keeping requirements on food producers and gives the FDA greater power to recall tainted food.  But there are some legitimate issues in the language and workings of the bill, so if remains to be seen how it will play out in the coming year. 

In another example of industry taking the lead, the Rapid Recall Exchange from the Food Marketing Institute, the Grocery Manufacturers Association and GS1US has received kudos from supermarkets and food manufacturers. Several grocers have added recall alerts to their websites, and new bar codes are helping retailers show consumers how to track the origins and expiration dates of their purchases.

I strongly believe that a joint industry-regulatory approach is the best way to improve safety in the food and beverage industry and prevent illnesses. So, congratulations to the companies and groups who are taking on this important mission and let’s keep up the good work.


GoGoGo!

Jim

Solutions for Food and Beverage

RFID Consulting

Photo Credit: Samuel M. Livingston

Much like a see-saw on a playground, you can work to make costs go down, only to see other costs go up in response.

Companies might bring down supply chain costs through changes to operations, for example, but these changes can create a surprising upswing in other costs. One of these danger areas is taxes, or for global companies, the Effective Tax Rate (ETR).

Supply chain managers do not always understand ETR, and tax planners are not always fully aware of operational decisions regarding outsourcing, transportation and distribution on a global scale across multiple borders. So changes to one can make costs rise in the other category. Even a slight tax rate restructuring that ignores optimization with a supply chain can inadvertently force product prices to rise, as well as total delivered costs.

Tax Effective Supply Chain Management (TESCM) helps integrate tax planning into supply chains. However, less than half of multinational corporations actually have tax effective supply chains.

A chapter of the recent white paper from Tompkins Associates, “Leveraging the Supply Chain for Increased Shareholder Value,” explains how ETR and supply chain management can be optimized.

Although it is not necessary for supply chain managers to understand global tax law, it is helpful for tax planners and supply chain managers at the same organization to collaborate – especially with global taxes and incentives that can lead to a see-saw effect.

What is your organization doing in the way of TESCM? Is tax management integrated into your supply chain? 

GoGoGo!

Jim

More Resources

Download the white paper, Leveraging the Supply Chain for Increased Shareholder Value

Case Study: Global Supply Chain Strategy and LSP Selection

Photo Credit: Hiroh Satoh

“We must do it quicker and better!” We hear this shouted a lot these days in the business world, but is it a realistic scenario?

It is realistic – especially when it relates to how the supply chain can lead to improved operating margins. When you design business processes that are integrated, then your company naturally becomes speedier, more efficient, and holds potential for margin improvement.

I continue today with the fourth of a five-part series that looks at the supply chain mega-processes, Buy, Make, Move, Store, and Sell. (Based on a new white paper, Leveraging the Supply Chain for Increased Shareholder Value.) Here I touch on some of the key aspects of “speed and productivity” in reducing the cost of goods sold.

The Need for Speed

Increasingly, the economic focus is on “Total Delivered Cost” of goods rather than “Landed Cost.” So, how do companies become quicker and smarter? Here are just a few tactics:

Supply chain benchmarking and leverage best practices

Develop strategic, tactical and operational supply chain action plans

Factor the supply chain into product development

Rationalize and strengthen supplier relationships.

Employ appropriate, current technology

Optimize distribution network(s)

Listen to the voice of the customer

Remain open to new ideas, such as designing modular and scalable operations/systems

Take the Productivity Challenge

Opportunities to improve productivity can be found throughout the supply chain, but the two most common areas are in direct labor and materials. Of course, the bread and butter of productivity is labor.

Take a good look at where your labor costs lie and compare it to productivity goals – Is labor concentrated in the manufacturing plant? Is it in the call center, order fulfillment and/or customer service?  Is it in the transportation fleet or in the distribution center?

Are you hearing more calls for “quicker and better” in your operations today? How are you meeting this challenge?


Go!Go!Go!

Jim


More Resources

Press release: Business Executives Leverage Supply Chains to Create Increased Shareholder Value 

Photo Credit:  Jurveston