Hello this is Jim Tompkins, the President and CEO of Tompkins Associates and Tompkins International.
I am pleased to welcome you back to the third part of our new podcast series entitled: New Frontier for Profitable Growth in Business, Leveraging the Supply Chain Shareholder Value. Today we want to talk about how to outperform our competition. I am pleased to welcome back Valerie Bonebrake, a Partner at Tompkins Associates and a lady who really understands how to beat the competition.
Jim
Valerie, as I stated when I first introduced this Podcast Series, I see this decade as the Golden Decade in which the Supply Chain is not only the enabler, but the driving force behind shareholder value. What do you see as key to achieving this level of importance for supply chain performance?
Valerie
That's a great question Jim. Top-performing companies often maintain a dual focus of meeting and exceeding profitable growth objectives and outperforming competitors. In this age of information, the ever-changing dynamics of the market demands flexibility to serve consumers who can now purchase the latest and greatest widget from around the world at the click of a button.
In order to achieve these goals it's critical to have a strategic market plan and the supply chain capabilities to deliver superior results that will surpass the competition. Also, the strategic market plan must address both internal and external activities. I believe there are three key areas that enable this level of performance. The first is market focus. Second is communication and third is responsiveness.
Jim
Agreed Valerie. Today's leaders have many mechanisms to understand customer demand including focus groups, surveys, point of sale purchase information and improved forecasting tools. What do you recommend for companies who really want to maintain a focus on the market?
Valerie
In the second part of this podcast series, Steve Ganster discussed the importance of Strategic Market Planning. This is not an event, but rather a process. Plans must be actionable and given the speed of market shifts that I touched on earlier, they must be constantly revisited. In support of these plans, as you pointed out, organizations must continuously gather information about customers and markets, but this is just the starting point.
They must also understand what is happening within the global environment. The weather patterns this winter, for example, will impact sourcing for some industries, as will the political changes in Egypt. China's treatment of issues such as inflation and labor policies are important drivers of global growth. It is important to gather and track information on government relations and policies including those of local, national and international importance.
Within an industry, understanding technological advances is critical. Everyday new technologies are coming to market that can radically change the cost to deliver and the speed to market of products and services. There is a trail of companies that got their start with breakthrough product strategies only to find themselves left in the dust because their vision did not take them far enough. It is critically important not only to understand and recognize current and future industry trends, but also to track what direct competitors are doing.
Jim
You've highlighted some really important areas to think about. It's not enough today to know what your customers need. You really have to stay ahead of the curve to create products and services they may not have even thought about yet. You also shared with us that communication is the second key to maintaining this dual focus of achieving profitable growth and outperforming competition. What do leading companies need to do to insure they have all their bases covered in this area?
Valerie
You're right Jim. In today's post-recession world, many industries are re-calibrating and even reinventing themselves to adjust to the new normal. We've talked for years about anticipating what customers need, but the speed at which change occurs and information flies across the globe today requires a much more fluid process.
There are all kinds of sources for information – trade publications, industry conferences and events, corporate and individual networks, internal and external research reports ….the list goes on and on. But the real value can only be unleashed if information is packaged and delivered in a meaningful manner to all relevant stakeholders. This is why ongoing communication is a requirement in enabling companies to out perform their competitors. Companies that go through all the work of understanding customers, markets, operating environments, and competitors must have a way to communicate this information.
There are various means of communication ranging from informal and low-cost alternatives such as newsletters, e-mail blasts, town hall meetings and webinars – to more formal technology-driven solutions, such as market databases and CRM applications to name a few. These solutions are now highly customizable and can truly help with taking data and turning it into information that creates a strong knowledge base for the company.
The mode of the communication is not nearly as important as consistently sharing business intelligence that employees – and strategic suppliers and partners can use to strategically respond to the market. Many of today's global supply chain information technology applications support both the collection and dissemination of critical information in a timely manner.
Having an effective communication plan helps not only to convey customer and market information but can also directly affect profitable growth. Getting input from employees and partners that will improve the business helps with employee retention and creates strong business partners. Companies that outperform their competitors are ones who coach and mentor managers to communicate effectively with employees –and business partners. Following a formal communication process will help to connect key stakeholders to the company's business strategy.
Jim
Valerie I really like the way you've included external partners in your explanation of effective communications plans. Today's supply chains are complicated and the ultimate customer's wants and needs can get lost in the process if the communication plan does not include strategic partners as well as employees. Great point.
The last key to achieving profitable growth and outperforming competitors that you mentioned was Responsiveness. Responsiveness can take many forms. What are some of the practices of leading companies?
Valerie
Well Jim, in this context I'm speaking of responding to what has been learned. Generating and communicating information is one thing, but unless changes are made based on what has been learned, nothing has truly been accomplished.
To achieve the level of responsiveness required in today's global economy is not easy because it is not the function of a single department or business unit. For example, having an integrated and responsive Sales and Operations Process combined with more timely and accurate information than competitors, and a proven, consistent means to communicate relevant information throughout the company is what enables top companies to outperform competitors.
In addition, utilizing information to optimize inventory is key to profitable growth and is an integral part of sales and operations planning. Responses to changes in customers needs, wants or market conditions may include updates to current products, new product introductions, entrance to new global markets, new distribution channels and the ability to shift inventory or components from one region to another, just to name a few.
So Jim, to your initial point of thinking of this as the Golden Decade, where Effective Supply Chain Performance drives profitable growth and enables companies to outperform their competitors, I would say you are right on. Those companies who utilize a Strategic Market Planning process to delivery timelier, more robust, and better business intelligence than their competitors, coupled with effective communication that enables a higher degree of responsiveness across the supply chain, will win every time.
Jim
Thank you very much Valerie for covering the second part of profitable growth. We had Steve Ganster on capturing new markets and customers; and today we had Valerie Bonebrake on outperforming competition. Next podcast we begin with a two-part discussion on margin improvement. First up will be Dan Avila speaking about reducing the costs of goods sold across the supply chain. Look forward to speaking to you again real soon.
