As per this recent article over on World Trade 100, it’s time to ask if your company [is] ready to export to BRIC, it’s time to start thinking about exporting to BRIC countries because:
- 45% of global GDP is estimated to originate from seven emerging economies: Brazil, Russia, India, China, Mexico, Turkey, and Indonesia
- it is estimated 55% to 60% of the nearly one billion households that will have incomes in excess of 20,000 will be from the developing world within a decade
However, one thing that needs to be noted is that many of these countries have sub-markets, and if the products aren’t localized to the sub-markets, it could be difficult to maximize your return. For example, China has 20 to 40 different sub-markets on its own. And some of these markets are only two hours apart. For example, Guangzhou and Shenzhen are both tier-one cities in China, located in the same province and just two hours apart but there is a marked cultural difference between the two. According to a study done by McKinsey, “Guangzhou’s people mainly speak Cantonese, are mostly locally born, and like to spend time at home with family and friends. In contrast, more than 80 percent of Shenzhen’s residents are young migrants, from all across the country, who mainly speak Mandarin and spend most of their time away from their homes”.
The article has some good thoughts to keep in mind when planning to expand into China, India, Brazil, and Russia. So ask yourself, Is Your Company Ready to Export to BRIC?.
A recent white paper by JDA and Oliver Wight attempted to set out the top 10 myths and realities of Sales & Operation Planning. According to the authors, these are the
- The S&OP process should be owned or sponsored by the demand planning or supply chain function.
- S&OP is a tactical, real-time process that enables the quick identification and response to problems as they arise.
- S&OP deals with product families and a fixed hierarchy.
The devil is the details and S&OP doesn’t go there. So that doesn’t really help us.
- S&OP is really just a review of historical data. There is no ability within the process to do any simulation of suggested changes, let alone compare a differing scenario to the optimal plan.
- S&OP is limited to quantitative views of supply, demand and financial plans. Just look at the numbers and you’ve got what you need to support decisions.
- S&OP is just another executive meeting; nothing really ever comes out of it. Decisions made in the meeting stay in the meeting and rarely get executed.
- S&OP relies on a fixed demand plan or statistical forecast. It doesn’t emphasize how we may need to shape demand up or down to meet business objectives.
- S&OP processes are too complex and difficult to manage — especially when trying to systematically incorporate external trading partner feedback into the internal consensus demand and supply plans.
- We spend so much time striving to create a perfectly balanced supply and demand plan, yet too often it’s a futile exercise. The finance team is just going to override any S&OP plan that we create, so why bother?
- S&OP can be solved with the implementation of a tool. Just configure the software and turn on the “black box”.
Now some of these are obviously myths. But are all of them myths? We’ll review the crux of the realities in the next post as a first step in our effort to understand to what extent these are myths and to what extent they are just minor misunderstandings.