I traveled around the world a few weeks ago – from the US to Europe to Asia and back to the US.

Of course, I stayed updated on major news via the Internet. What I found especially interesting was the circle of major economic concerns going in both directions between the US and Europe and the US and China.

I don’t recall a time in recent memory when it has been so important to stay on top of these evolving economic issues.

The concerns between the US and Europe have to do with the stability of our respective economies. Today, we celebrate a deal in which European leaders have agreed to a restructuring of Greece’s debt and a new path forward for improving the European Union’s economic outlook. In response, stocks rallied around the world (as of this writing).

This is good news, because much of what I have been hearing here and in Europe centers on worries about the Greek bailout and the viability of the Euro. They are not out of the woods yet, but a good sign.

I also found that Europeans are very concerned about the ongoing high unemployment rate in the US and the potential implications of a double-dip recession. Well, although there are still big worries, more good news came today in the form of the latest US economic report showing that the US economy grew 2.5% in the third quarter of this year. The US needs stronger growth for jobs to rebound and consumers to maintain and increase their confidence and spending levels, but the report is positive and also had a hand in the day’s higher stock market returns.

As you might guess, concerns between the US and China were concentrated on trade when I was in Asia. Whereas the US focused on Chinese currency being undervalued, the Chinese were focused on US consumer spending and the affect this would have on the continued growth of the economy in China.

Of course, these are all very important concerns as the world continues to grapple with the residue of past policies and the Great Recession. But they also tell us a lot about how world economies and policies are interconnected and thus, the importance of global supply chains.

It is simply amazing to sit in a meeting in the UK discussing a North American company, and I meet with a person from Africa. Then in a supply chain meeting in Germany involving a US company, I meet with a person from South America. Next, at a dinner in Seoul, Korea, an unknown Korean in the restaurant tells me how sorry he is that Steve Jobs has passed away.

And lastly, at a meeting in China involving an Italian retailer, I meet with a supply chain professional from India.

So, my “worldly view” is that even though I am not really fond of the song, it certainly is a small, highly interconnected world that we inhabit after all. And we are all working together in the world of business through the magic of global supply chains.

What are your thoughts of how supply chains are interconnected around the globe? What have you been hearing in your travels?

Go!Go!Go!

Jim

More Resources

Is Your Supply Chain a Source of Hidden Profits? 

White Paper: Leveraging Asia Supply Chains for Increased Value

European Operations Are Moving East, but How Far?

Replacing China Myths with Fact Podcast - Part 1, Part 2 and Part 3

With China currently boasting the #1 apparel and #2 accessory markets in the world, there’s no doubt that the fashion industry there is enjoying an explosive phase.

In fact, Michael Zakkour, a principal at Technomic Asia (a wholly owned subsidiary of Tompkins International) recently spoke at a Fashion Institute of Technology event in New York about China consumers’ growing need for luxury and “affordable luxury” brands.

Michael noted in his presentation that many China consumers have the desire to show to others they are living the good life now, hence the affordable luxury factor. And this market is increasingly driven by young females. China’s growing middle and upper middle class – with 300 million consumers – is also driving the growth in the luxury goods market and the need for more “affordable luxury.”

So with all these consumer preference changes, the modern supply chain of China is now the nexus of China. While Chinese consumers only spent $100 each on clothing in 2009, they are poised to spend much more now, especially for affordable luxury. Chinese consumers love for brands is prevalent in Shanghai and Beijing, and the opportunities and new territory is in the interior of China.

Likewise, Michael comments in this China Business Blog and Podcast about the essential research that is necessary before entering China with your product line or marketing strategy. He also lists some fun factoids to keep in mind.

China’s different markets and consumer preferences need to be well understood before developing a business or entry strategy. Companies that want to win a bigger share of this growing market need to be aggressive – but opportunity is well worth the risk.

And as I write this, Michael is once again sharing his share insights on China’s consumer retail, and fashion markets and trends at a well-known conference in New York City. I guess this shows that business leaders are just as hungry for information on Asia business strategies as the Chinese consumers are for finer apparel and accessories.

More Resources

How Luxury and Fashion Brands Can Successfully Launch in China

Fashion Institute of Technology presentation

China is Changing Supply Chains Around the World: Facts and Trends

China 2.0 - What the New Reality in China Means to You 

Caught Between the Tiger and the Dragon: This business novel by Jim Tompkins is a modern-day fable that cleverly brings to life the ups and downs of business interactions with China.

I have asked Bill Loftis, a supply chain and transportation operations expert who recently joined Tompkins Associates, to talk to us about horizontal collaboration. He has conducted a number of development and implementation initiatives for clients involving collaboration for improved distribution and transportation. Take it away, Bill! 

Have you given any thought to distribution collaboration recently?

If not, now is definitely the time, especially if you think of collaboration as a dot-com era dated concept that yields little value.  Things are changing.  For those who have longed to see the fulfillment of the horizontal collaboration concept, it’s a hopeful sign.

From my most recent experiences with companies, I believe that the collaboration “conversation” has progressed. It seemed to me that, ten years ago, in its infancy, collaboration tended to be a side conversation. Then it faded away (no successful scalable solutions). 

But this year, it’s again become an agenda item.  In fact, I’ve noticed clients engaged in meetings on this topic and have attended large conferences devoted to it.  I’ve also spoken with several large US companies who are engaged in collaborative pilot projects with other shippers.  So this is more than a conversation change – executives are investing in it!

More evidence of progress:  I’ve recently noticed a few service providers explicitly advertising collaborative solutions.  Traditionally, most providers treated collaboration as an internal competency (rather than a stated service offering).  Collaboration was practiced, but it was kept under the radar as an internal efficiency exercise.  Today, more providers are making resource investments (warehouses and trucks) and marketing collaborative solutions.

These are meaningful signs.  Companies are investing in collaboration, and they’re following the key principles of a collaborative solution: combining multi-company volumes on shared resources to service customers with more frequent delivery cycles.  As you well know, any solution that can do this will vastly improve both cost and service performance.    

My goal today is to highlight the fact that collaboration is back in a big way.  There isn’t enough space here to cover the whole subject, so several future posts will tackle these key points:

1. Clearly define various collaboration solutions (differentiate between strategic versus tactical solutions).
2. Propose a compelling value proposition for a strategic collaborative solution to achieve pilot funding.
3. Describe the type of supply chain flow paths where strategic collaborative solutions best fit.
4. Make suggestions on how to solve the leadership vacuum for collaborative solution development.
5. Initiate a strategic collaborative pilot.

For now, I recommend you put collaboration research back on your action list.  Ask your logistics service provider what they’re doing.  Ask eligible supply chain partners if they are doing anything, and see if they would be interested in exploring the issue. 

I feel called to push this because I’m convinced that strategic collaboration solutions, for the right supply chain flows, can be better than any alternative. 

Let me know what you think. Are you seeing more horizontal collaboration these days? Does it have the attention of your supply chain leaders?

More Resources 

Horizontal Collaboration Value Proposition

It happens every year – the holidays have once again crept up on us and are now right around the corner. For a lot of companies, this means revving up their supply chains for peak season planning in distribution and fulfillment.

This year, retailers are preparing to make the best of the upcoming peak season regardless of the twin threats of economic instability and low consumer confidence.

Did you know that nearly 60% of companies began their inventory build for the 2011 holiday season prior to Labor Day? This is just one of the insights gleaned from the recent Peak Season Trends and Strategies Survey of Tompkins Supply Chain Consortium members.

Nearly 80 retailers, manufacturers, wholesalers/distributors participated.

The consortium asked about the top threats to business success this peak season, and no surprise, they were indentified as economic weakness and low consumer confidence. Although there are no clear forecasts for the season, companies are doing what they can to brace themselves, make a profit and ensure customer satisfaction.
While nearly two-thirds of respondents list the economy as the single biggest threat to seasonal profitability, there has also been much talk among supply chain professionals about holding fewer stock-keeping units (SKUs) this peak season as compared to the last.

This is somewhat of a surprise. You can read more about this issue here in a DC Velocity article.

How did your peak planning go and what challenges are you experiencing? Is your company holding fewer SKUs?

More Resources

Peak Season Strategies and Trends: 2011 Real-Time Survey Report

Ten Proven Ways to Improve Inventory Performance 

Profitable Growth Podcast: Enhancing Management of Inventory

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