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Supply Chain
New Year's Resolutions

New Year's resolutions: How many of you actually make them, and more importantly, how many of you make them and then figure out how or have the resolve to keep them? I don't make or keep them -- too much hype for my taste. But, that didn't keep me from wondering what the entire "new year's resolution process" might look like if applied in the Supply Chain arena.

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First, let’s take a look at what the typical resolution process looks like
(ATL:  According to Laura) – it contains 4 distinct phases:

  • Phase I:  DEVELOPMENT of bad habits
    (such as smoking, overeating, drinking too much, spending too much.)
  • Phase II:  REALIZATION - Identification of the impact the bad habit has had on you
  • Phase III:  RESOLUTION - Make the decision to improve
  • Phase IV:  IMPLEMENTATION - Attempt to accomplish the resolution

Now, let’s examine another interesting fact about each of these phases:  Each phase has a gaggle (technical term that I like to use) of merchandisers and service suppliers who create plans about products and services, and who understand that the majority of the population is somewhat cyclical/seasonal iteration through these phases. 

Here are some examples:

Phase I:  “Did you want to super size that?;” All you can eat buffet; Happy Hour Nightly; free shipping if you order before midnight; Wal-Mart super centers; personal shoppers.   

Phase II:  Lung cancer, blood pressure, and cirrhosis of the liver testing facilities and devices; suddenly having to shop at Lane Bryant or in the “larger” section of your favorite department store; bathroom scales, mirrors; credit and collection agencies.

Phase III:  Celebrities paid to advertise how they made the decision to improve; medical counseling services; Chapter 11 legal services.

Phase IV:  The 12 Step program, AA, nicotine patches and gum; Lean Cuisine, alcohol free beer; Gold’s Gym, LA Fitness, Weight Watchers, Canyon Ranch Health Resort; credit card limits, credit counseling services, debt consolidation services.

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OK, we've set the foundation and I assume that you all get the picture.  Now, let’s do our own version of  your supply chain on New Year’s resolutions. We'll walk through the phases, and equally important, the market opportunities for merchandise/services that support each phase. 

Phase I: DEVELOPMENT - Decision to increase pricing without proper market analysis; weak negotiation skills in the supplier relations department; launch of an ERP, RFID, SCM, or CRM implementation without proper sponsorship and resourcing; decision to staff-up in an undeveloped region; decision not to increase union wages and the employee benefit program; decision to move all manufacturing capability to Asia without looking at all cost elements.

Phase II: REALIZATION - Loss of customers; increased transportation costs; inventory downturns; inventory costs/levels up; increased labor cost and disputes; shrinking margins; increased employee turnover.

Phase III: RESOLUTION - Improve R&D processes; restructure and align enterprise technology projects; identify and decrease overall supply chain risk; improve decision making process; reduce inventory and transportation costs; add new competitive products to portfolio.

Phase IV: IMPLEMENTATION - Implementation of Six Sigma; creation / staffing of Supply Chain Risk Officer position; contract with a 3PL; all enterprise technology programs restructured to drive more accountability and increased ROI.

Now, let’s take a look at the product and service market opportunities around each of these phases.

Phase I: Labor Unions; low cost suppliers in Asia; insurance and benefit providers; technology providers; technology selection; and implementation service providers.

Phase II: Market research and performance indices providers; operation, administration and financial performance service providers; risk assessment methodology providers.

Phase III: Business strategy / alignment consulting services; technology and other best practice research offerings; management of other miscellaneous conferences.

Phase IV: Executive recruiting services; Six Sigma and other quality implementation programs and associated measurement services; logistics and 3PL offerings; all associated technology providers and implementations services (ERP, SCM, PLM, CRM, RFID), training/education offerings for all supply chain resources.

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So, what’s the moral of this analysis?  Well, a couple of points could be drawn:

  • IF I am a service or technology provider, I want to ensure that I have the organizational skills and processes in place to “poll” all my customers and prospective customers as to what their resolutions are going to be.  This will enable me to better create or target my product and service offerings.

  • IF I am a product or service provider, I want to ensure that I have the organizational skills and processes in place to MINIMIZE (or strive to eliminate) Phase I type activities and ensure that my focus remains in the later phases, especially phase IV.

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As always, I enjoy closing out my monthly column with a little tidbit of humor, but unfortunately, this month will be different.  After writing this one, I am too depressed to think of anything funny.  So, I guess I’ll just put on my nicotine patch, elastic wasted jeans, pop the top on an O’Doul’s, and head out to my local Wal-Mart Super Center for an unnecessary plastic object. I just need to be home in time for the UPS, DHL and FedEx trucks to arrive.

------------------------------------Enjoy the New Year!



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