There are three principle objectives that apply across all supply chains for both products and services, cross all barriers of culture, distance, language, and are universally understandable by operations, buyers and sellers:
• Making Money
• Saving Money
• Decreasing Time
These three principles can all be broken into a number of different perspectives depending on which facet of the prism one looks through. It is worth exploring the details of each to ascertain what is motivating your company, competitors, vendors, and customers.
Making money is by far the most important because more revenue and, better yet, higher margins can solve almost any problem a business may have.
Higher margins are something that all stakeholders appreciate, encourage vendors to offer better volume discounts, and allow the organization to provide better benefits to employees and incentives to customers. Employees that are happy going to work provide better service to customers, and customers are willing to pay more for higher value services, especially when wrapped in a solution that exceeds their expectations. The best profitable brands all know this as part of their DNA and practice it year after year. All of this increases P/E evaluations and rewards stockholders too.
Four Pillars of Marketing:
Product
Price
Promotion
Distribution
All four factors are weighed into the efforts to make money and are part of making a supply chain successful. Thinking of your supply chain as an extension of marketing can be very powerful. Everyone loves success, and it is rewarded in numerous ways. Here in Austin, Apple announced they would open a facility to employee 3000+ people, and the city, without prompting, has offered more than $6 million in tax incentives. Do you think they would have done this if the company was unheard of?
You might consider the implications of how your supply chain can help your customers make money. Your supply chain has features that are intrinsically advantageous to your customers. By using marketing savvy, you can turn those advantages into benefits. This thought process of Feature, Advantage, and Benefit (FAB) is a hallmark for top product, service, and solution Sales Executives. The impact of increasing communication between supply chain teams, marketing, finance, customer service, quality, and sales is very positive.
Saving money is often compared to Benjamin Franklin’s quote of “a penny saved is a penny earned,” but in reality, every dollar saved is worth about two dollars in revenue in tax savings alone. Every nuance of every dollar spent should be evaluated because rates change, innovations provide superior paths, contracts go dormant, and small increases are not negotiated (but when compounded, they become large). Services that seem standard (like insurance, utilities, telecommunications, and certainly freight, with dozens of ancillary surcharges) may not be. Savings of 15% are certainly common, and technology can often help.
While reviewing your biggest vendors (whether service or product), consider if they should be one of your prospective customers. If so, provide your Sales Exec with the vendor’s Sales Director’s name and contact information.
Decreasing time is highly beneficial whether it is for your firm, your customer, or your vendor. Time waits for no one; it won’t wait for me (Rolling Stones), Absolutely Positively Overnight (FedEx) and Competing Against Time (Stalk and Hout) were all invented to drive home the same point. If you haven’t ordered anything from Amazon lately, go find a book (like the above for $9.98) and buy it; you will be amazed how quickly you receive it. They are close to standardizing one day delivery in major markets. Saving time increases customer satisfaction, saves cost, and speeds up reorders.
Are your distribution centers in the locations closest to your customers? Do you have a balanced inventory system? Should you consider letting your vendors distribute some of your products that don’t require a value add?
Do you have a great employee with quality training focused on time as a competitive advantage?
I must admit, it is a lot easier to write about this than to actually plan, move into action and execute!
Rob Shirley is President of ExpresShip, a strategic partner in the global supply chain. Contact him at rsxpship@gmail.com
• Making Money
• Saving Money
• Decreasing Time
These three principles can all be broken into a number of different perspectives depending on which facet of the prism one looks through. It is worth exploring the details of each to ascertain what is motivating your company, competitors, vendors, and customers.
Making money is by far the most important because more revenue and, better yet, higher margins can solve almost any problem a business may have.
Higher margins are something that all stakeholders appreciate, encourage vendors to offer better volume discounts, and allow the organization to provide better benefits to employees and incentives to customers. Employees that are happy going to work provide better service to customers, and customers are willing to pay more for higher value services, especially when wrapped in a solution that exceeds their expectations. The best profitable brands all know this as part of their DNA and practice it year after year. All of this increases P/E evaluations and rewards stockholders too.
Four Pillars of Marketing:
Product
Price
Promotion
Distribution
All four factors are weighed into the efforts to make money and are part of making a supply chain successful. Thinking of your supply chain as an extension of marketing can be very powerful. Everyone loves success, and it is rewarded in numerous ways. Here in Austin, Apple announced they would open a facility to employee 3000+ people, and the city, without prompting, has offered more than $6 million in tax incentives. Do you think they would have done this if the company was unheard of?
You might consider the implications of how your supply chain can help your customers make money. Your supply chain has features that are intrinsically advantageous to your customers. By using marketing savvy, you can turn those advantages into benefits. This thought process of Feature, Advantage, and Benefit (FAB) is a hallmark for top product, service, and solution Sales Executives. The impact of increasing communication between supply chain teams, marketing, finance, customer service, quality, and sales is very positive.
Saving money is often compared to Benjamin Franklin’s quote of “a penny saved is a penny earned,” but in reality, every dollar saved is worth about two dollars in revenue in tax savings alone. Every nuance of every dollar spent should be evaluated because rates change, innovations provide superior paths, contracts go dormant, and small increases are not negotiated (but when compounded, they become large). Services that seem standard (like insurance, utilities, telecommunications, and certainly freight, with dozens of ancillary surcharges) may not be. Savings of 15% are certainly common, and technology can often help.
While reviewing your biggest vendors (whether service or product), consider if they should be one of your prospective customers. If so, provide your Sales Exec with the vendor’s Sales Director’s name and contact information.
Decreasing time is highly beneficial whether it is for your firm, your customer, or your vendor. Time waits for no one; it won’t wait for me (Rolling Stones), Absolutely Positively Overnight (FedEx) and Competing Against Time (Stalk and Hout) were all invented to drive home the same point. If you haven’t ordered anything from Amazon lately, go find a book (like the above for $9.98) and buy it; you will be amazed how quickly you receive it. They are close to standardizing one day delivery in major markets. Saving time increases customer satisfaction, saves cost, and speeds up reorders.
Are your distribution centers in the locations closest to your customers? Do you have a balanced inventory system? Should you consider letting your vendors distribute some of your products that don’t require a value add?
Do you have a great employee with quality training focused on time as a competitive advantage?
I must admit, it is a lot easier to write about this than to actually plan, move into action and execute!
Rob Shirley is President of ExpresShip, a strategic partner in the global supply chain. Contact him at rsxpship@gmail.com
