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Two cars crashed in an intersection. That’s what happened. Pick any of the drivers, passengers or observers of the crumpled, smoldering wreckage. Ask for details. Will they agree? Chances are they will not.
We, as thinking humans, take what happened in the context of our experience and build a story around it. It’s a true story but takes a step away from answering, “What happened?”
Actually, five cars collided: COVID-19, political elections, infrastructure decay, global economic upheaval and historic global climate events. How did you fit into the variables of the last 18 months’ supply chain collision? How much twisted wreckage is wrapped around you now? And how many key players, manufacturers, distributors and customers are quick to blame you when they fall short?
We’ve all lived, and most survived, in the stories being told about what happened.
Less than two years ago, I was asked to write a newsletter article for AIM/R titled, “Only a Link?” The focus was as times got tougher, many in the supply chain were “wondering if they can move fast enough to fend off digital attackers.” Indeed, the belief with key researchers such as McKinsey and Gartner was that “incremental improvements and ‘wait and see’ attitudes” could certainly lead to the twisted wreckage of a once viable business.
The emphasis on digital fulfillment, similar to Amazon, “along with [accompanying] global supply challenges, rattle even the most established among us,” I wrote.
How narrow that focus appears today, considering everything that is happening!
If you are like most manufacturers’ reps and distributors, you are steeling your spine, sorting through mountains of opinions, looking at your balance sheets, collaborating with close allies and asking, “What comes next?”
Set blame and finger-pointing aside as useless time syncs and recognize in a world run increasingly on iPhones and Amazon, it's no surprise that today's customer expects your response to be faster, cheaper, and better, with instantly responsive customer service. If the thought was Amazon’s B2B arm was powerful before COVID-19, the increase has been exponential!
You know a static web presence is no longer enough. An e-commerce website solution that simplifies browsing, purchasing, pricing access and reporting has become the pay to play.
What we know is whether you’ve been in business months or decades, to survive and more so, to thrive, requires a flexible combination of the following: rethink, reframe, retool. Realistically, you cannot possibly do it all immediately. But procrastination cannot be an option. Time is not your friend.
Before reading on, take inventory. Identify your weakest links in people, process, and product delivery. Get real. What does it cost you every day? Where is the wreckage
Based on what you identified as your weakest link, choose from this column two or three key nuggets to implement strategically, tactically and immediately. Prioritize them. Inform and include your whole team. Set measurable goals and a realistic timeline. Review your progress, then rethink, reframe, retool, if necessary, again.
How set are you in the way you operate? “But it’s always been done this way!”
1. Scale. It is the single greatest key to margin improvement.
Manufacturers choose manufacturers’ reps and distributors as value-driven partners when they creatively consolidate and schedule both first-time and repeat purchase orders while creating denser delivery locations and schedules. Look for overlap in daily processes; identify consolidation processes to save time and money. The reward? Margin improvement.
2. Procurement synergies are not limited to mergers and acquisitions alone.Manufacturers’ reps and distributors repeatedly choose manufacturers who have been creative in coordinating component suppliers, watching on-shelf site inventory, monitoring work-in-progress schedules, and offering proactive fulfillment transparency.
Customers expect their reps and distributors to do the same. Do you measure up?
3. Redundancy elimination. Shared or virtual services such as marketing, IT, finance, HR and back-office support not only reduce or eliminate redundancy throughout the organization, but provide substantial opportunities for capital improvement investments.
Tomorrow is too late. Reframing is one of the least used but most powerful strategic moves a company can make. Static, long-standing operations have been victims in current collisions, such as the COVID-19 pandemic.
The debris impacting your company is real and painful. Disruption to your current business model is evident. Reframing starts with defining anew the beliefs underlying your value definitions and, ultimately, your revenue. Are those beliefs constricting or improving your bottom line? Where to start?
Regardless of your link in your customers’ supply chain, you can influence the way you define and potentially reframe your business model in these distinct areas: customer relationships, key operations, cost structures, technology, competition positioning and key value differentiators.
Turning any one of these notions on its head by challenging long-standing underlying beliefs is reframing. Dissect long-held notions about your perceived customer needs to uncover the zone that, when reframed, will produce the greatest impact on your bottom line. Start by asking, “What if?”
• Target did it: “What if people who shopped in discount stores would pay extra for designer products?”
• FedEx did it: “What if package delivery could be tracked and guaranteed on time through a central hub system?”
• Amazon did it: “What if consumers had digital access to all available inventory, competitive pricing and immediate customer service?”
Sure, these are the giants. The opportunity here is to cherry-pick from their stories, reframe the corresponding belief in your organization — thereby giving you the greatest opportunity to become the value leader for your target market. Do it now.
Lighten your load. Drop what isn’t working.
Expenses fade, investments grow.
Technology is changing quicker than any business can constantly manage. Success depends on connectivity tools providing the insight needed into product availability and pricing on the manufacturing side.
Sales recommendations based on customer design, quality demands, historical purchasing, and upcoming contracts are what work on the customer side. Customers have learned to expect self-serve with effortless technology. Many demand the ability to link some of their automated processes directly with manufacturers and distributors. Are you aware?
Remote training, before Zoom, was tedious and often rejected. Now it is expected. High-quality, short bursts of relevant, accessible and applicable information, whether within your own organization or on to your customer, is critical. Investing in technology that today's workforce expects is a required strategy for both technical and soft-skills training. Are you prepared?
Changing the digital game is neither easy nor an overnight event. However, it is required to become a core value-chain partner. It is convenience that customers are demanding. The return on your investment is ongoing product design-in, repeat orders and loyalty.
Reps and distributors armed with exceptional product knowledge, technical expertise, a direct link to suppliers with expanded product selection, responsive customer service, cross-channel services and best-in-class training repeatedly beat out self-serve, automated, online giants. Are you ready?
Five events collided: some crashed, some died, some are still impacting your business. What happens next is up to you. Are you responding to what happened or to the never-ending story about what happened?
Identify your weakest links, define both strategic and tactical elements of your plan — then go! Become that best-in-class, successful thriver of this unforgettable time.
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