As the economy improves and buyers gain more confidence, automotive companies are also gaining back some of their lost ground. The industry is setting all kinds of records as we begin 2011, such as:

• Record-high prices for used cars, as demand rises and supply dwindles.
• Getting past the two worst years on record for the industry (2009 and 2010) and seeing new sales and market share increases for the major car companies in the US.
• Record-high fuel prices are creating interest in new innovation and high demand for hybrid gas-electric cars, as well as electric models, world-wide.

Today, auto companies are looking for ways to achieve profitable growth while increasing customer satisfaction. One often overlooked place that could help with these goals is the auto aftermarket. With a strong aftermarket supply chain, customer satisfaction is improved, especially with the used car market being as hot as it is right now. Car companies should look to improving this aspect of their operations in 2011.

This year will also see the automotive market experiencing global innovation. China, India, and Germany are all major developers in the global car market for a variety of reasons. China's rare earth metals, for example, are key to developing and manufacturing electric cars. The cost of acquiring these materials, as well as the country's export limitations on them, will be a factor for car companies to consider as they develop new models.

More priorities for the automotive industry in 2011 are highlighted in this article:
http://www.tompkinsinc.com/2011/Top_11/automotive.asp


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Automotive

A Strategic Assessment of China’s Light Passenger Vehicle Aftermarket

Photo Credit: Stas Kulesh

Although product returns are inevitable, wouldn't it be great for companies and consumers alike to avoid them whenever possible?

New developments in the service supply chain and reverse logistics areas are allowing companies to save money and customers to feel less inconvenienced.

For example, I recently came across a really cool blog post about innovations in how retailers are handling returns in the reverse supply chain. It was a post from The Operations Room, a blog from the Kellogg School of Management's Center for Operations & Supply Chain Management at Northwestern University.

The post explains how retailer Amazon.com has a program in the works that would allow its users to be notified when a gift was going to be sent to them. The user can choose to stop the shipment or choose a different gift instead.

It can also allow users to block whole categories of gifts from being sent to them, basically telling Amazon.com to never send a gift that's in the category of clothing, or DVDs, or jewelry.

The interesting issue that the blog post from The Operations Room pointed out was whether or not it was polite to refuse a gift and change it to something else. Or, as the Operations Room blog authors put it, "That's where operational efficiency smashes into social convention." Although returns cost businesses money, and unwanted gifts can be a nuisance to the consumer, you might never admit to actually using this service!

However, I can make a good case that it is a lot better than re-gifting, and it eliminates the hassle of returning a gift. By intercepting the order before it ships, customers get more satisfaction out of what they receive, and companies gain profitable growth from returns.

More priorities that are sure to emerge this year in the reverse logistics component of supply chain can be found here, in our Top 11 Priorities for Service Supply Chain in 2011.

Are reverse logistics a part of your plan in the coming year? How are you handling returns?

GoGoGo!

Jim


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Service Supply Chain

Top 11 Priorities for 2011

The Operation Room: Retails and Returns

Photo Credit: mmlolek

Last year was a good one for mergers and acquisitions (M&A). In fact, the value of global M&A rose almost 23% in 2010, with emerging markets leading the way and the energy and power sector seeing the most activity.

M&A is a burning issue no matter what your industry sector, and I hear about these challenges and questions every day in talks with business and supply chain leaders.

How much due diligence is enough? What if this new deal weakens our existing operations? How do we go about integrating supply chains? How can we show stakeholders the real value of the combined businesses? These questions and more are addressed in the Top 11 Priorities in 2011 for M&A.

Most executives understand that a good due diligence process is crucial to M&A, but I don’t believe that the impact of supply chain analysis and integration is well understood. Due diligence is not just about “financial engineering” – it is also about uncovering operational values early in the process.

Supply chain due diligence, done right, can reveal:

• Opportunities for supply chain improvements, simplification and cost reductions (sourcing, inventory, transportation, operations);
• Avenues for increased supply chain visibility, agility, velocity and responsiveness;
• Ways to meet challenges from supply chain risks and constraints to future growth; and
• Opportunities for network rationalization, organizational refinement, supply chain IT and Asian sourcing
  

I predict that we will see more companies looking to the supply chain during M&A due diligence and organizational integration in 2011 as a way to secure profitable growth.

Go!Go!Go!

Jim

P.S. If you are interested in Top 11 Priorities for business sectors such as pharmaceutical and consumer products, you can see more here.


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M&A Strategy

Whitepaper, Integrating Supply Chains from Business Combinations

I am in the midst of a series talking about “Top 11 Priorities for Profitable Growth” in this blog.

But sometimes routines have to be interrupted for big deals – and this is certainly one of those times. Next week, the leaders of the two largest economies in the world will meet to discuss trade and foreign policy.

Key issues that U.S. President Obama and China President Hu Jintao are likely to cover include the reevaluation of the RMB, world consumption of energy, and the policies of indigenous innovation and intellectual property rights. Each of these issues impacts global supply chains and logistics and will frame how we conduct business in the future in Asia.

Because Tompkins Associates (through its subsidiary, Technomic Asia) has its pulse on the global supply chain, we have seasoned experts in the China market – including Michael Zakkour - who can navigate the ins and outs of the visit and what it could mean for global business.

Read more in the China Business Blog and Podcast: President Hu's State Visit A First.

More Resources:

Technomic Asia

Tompkins International, China

Photo Credit: futureatlas

As I see it, food and health go hand in hand. Luckily, all the food and beverage (F&B) companies that I am in contact with see it the same way.

Most of you have probably already heard that the FDA is developing controls to reduce health risks in the food industry.

In fact, the FDA Food Safety and Modernization Act that was recently signed into law establishes the first major reform of the food and beverage industry since 1938. Now, there will be new approaches to food safety as food processors and producers must meet the law’s requirements.

This intensified focus on food safety makes it one of the Top 11 Priorities for Profitable Growth in 2011 for the F&B industry. Industry-wide trends toward global food safety certifications are gaining steam, and this will drive new technologies to improve visibility from the field to the store shelf.

With growing government regulation, food and beverage leaders will need to become even more proactive in understanding and addressing changes. It is critical to realize how to maximize hidden benefits of new regulations.

Accompanying food safety on the list of Top 11 Priorities is the consumer push for fresh and organic products. As sourcing and quality continues to test suppliers, distributors and retailers, the industry will need to place greater emphasis on achieving high volume growth while increasing margins in this lucrative market segment.

This year will prove to be one of the more dynamic, if not challenging, times for the food and beverage industry. Learn more about the top priorities for the food and beverage industry and see how your 2011 goals compare.

How do you see your operations performing in relation to these top priorities in the coming months? What would you add to this list?

P.S. If you are interested in Top 11 Priorities for other business sectors, you can see more here.


Go!Go!Go!

Jim


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Top 11 Priorities for Profitable Growth in 2011

Top 11 Priorities for Food and Beverage Companies in 2011 

Global Trade Management and Supply Chain Visibility

Photo Credit: Leslie Seaton

There have been some alarming news stories recently about counterfeit markets and theft of consumer goods.

For example, in Los Angeles County, California, a task force uncovered a counterfeiting ring with $305 million in consumer goods, including fake name-brand purses and cell phones.

How can this be prevented? A good place to target in order to reduce theft and counterfeiting is the supply chain and third-party logistics service providers (LSPs). Companies shipping goods using an LSP should look for the “halo effect” as a part of that provider’s services, meaning: They construct a halo around the shipper's goods so they are protected from theft, counterfeiting, and other forms of loss.

By extension, protecting a shipper's goods also protects the shipper's brand from becoming tarnished if these risks were to become reality. LSPs that provide a halo around their customers' goods make sure that their clients’ brand identity isn't compromised by lost goods due to theft, counterfeiting, or other hazards.

With theft and similar security issues, shipping goods through global supply chains demands strong security and visibility. These issues are shared between LSPs and shippers and can create high costs for both parties.

And achieving the halo effect is becoming more important every year, as reducing costs by reducing risk is a major priority in 2011 for LSPs and their customers.

For more priorities that should be getting the attention of LSPs and they companies they serve, visit the Top 11 in 2011 web site.

GoGoGo!

Jim


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Top 11 Priorities in 2011 for Logistics Service Providers

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

Photo Credit: SarahG