Monthly Archives: March 2009

It’s Nano Time

You can drive this
You can drive this
You can drive this
You can drive this
You can drive this

My, my, my Nano hits me so hard
Makes me say “Oh, My Lord”
Thank you for blessing me
With a car to drive and two left feet

It feels good, when you know you’re down
A super dope homeboy from Mysuru town
And I’m known as such
And this is a car, uh, you can’t touch

I told you, homeboy
(You can drive this)
Yeah, that’s how we cruising and you know
(You can drive this)

Look at my wheels, jazzy
(You can drive this)
Yo, let me bust the funky hub-caps
(You can drive this)

Fresh new wheels, high five
You gotta like that, now, you know you wanna drive
So move, into your seat
And get a fly girl and catch this beat

While it’s rollin’, hold on
Pump a little gas and let ’em know it’s goin’ on
Like that, like that

Dude on a mission so fall them back
Let ’em know, that you can jive
And this is a car, uh, you can drive

Yo, I told you
(You can drive this)
Why you standin’ there, man?
(You can drive this)
Yo, sound the horn, wheels are in, sucka
(You can drive this)

Give me a song or rhythm
Makin’ em awe, that’s what I’m givin’ ’em
Realize
You talkin’ about Nano, you talkin’ about a drive

It’s hype and tight
Driver’s are chillin’, so give them a light
Or a disc, to learn
What’s it gonna take in the new year to burn

Pink slip? Legit
Either drive hard or you might as well quit
That’s word because you know
You can drive this, you can drive this

Break it down
Stop, Nano time

Go with the funk, it is said
If you can’t roll with this
Then you probably are dead

So pimp your ride on the side
Bust a few moves
And take it for a low ride

This is it, for a winner
Ride in this and you’re gonna look thinner
Drive, park your rump
Just for a minute and let’s all do the bump, bump, bump

Yeah
(You can drive this)
Look, man
(You can drive this)

You better get hype, boy
Because you know you can
(You can drive this)
Honk the horn, your ride’s here

Break it down
Stop, Nano time

Every time they see you
They’ll know you’re so hype
You’re dope on the road and you’re magic with the wheel

Now why would you ever stop driving it?
While other’s making guzzlers that just don’t fit
You can tour around the world, from London to the Bay
It’s “Nano, go Nano, Tata Nano, yo Nano”
And the rest can fade away

You can drive this
You can drive this
You can drive this

Yeah, you can drive this
I told you, you can drive this
Too hype, let’s drive this
It’s way outta here, you can drive this

The Nano Rolls Out on March 23, 2009. (Economic Times)

The Economic Advantages of Fleet Management

A recent article in Integrated Solutions pointed out the economic advantages of fleet management which can save hundreds of thousands (and sometimes millions) a year in fuel costs for your average mid-size distribution company. In addition to fluctuating fuel costs, excessive idle-time, out-of-the-way routes, and unsafe driving are all expensive issues that plague your average distributor. And although the price of fuel can’t be controlled (although it can often be locked in for a limited time), fleet efficiency can be increased with technology that decreases idle time, optimizes routes, and eliminates unnecessary trips.

The article presents a case study of Namasco Corp. which is saving more than $500,000 per year in fuel costs thanks to a GPS-based fleet-management solution that optimizes loads and routes, minimizes idle-time, and gives Namasco real-time visibility into where its trucks are at any given time. In addition, when this software is paired with DOT logging software, the savings that result from efficiency improvements start to add up rapidly. Considering that a recent study by Motorola found that vehicles equipped with a GPS solution have 53% less travel downtime and a 26% improvement in employee accountability, can you afford not to do it?

Supply Chain Challenges for 2009

Industry Week recently ran an article on the “top nine supply chain challenges for 2009”. Some were dead on. Some less so. But it got me thinking … what were the obvious challenges for 2009, and what were the challenges that were most likely to be overlooked.

The obvious challenges are getting their fair share of press.

  • Risk Mitigation
    Between risk of supplier financial failure; the volatility in the energy, commodity, and global financial markets; and the unpredictable nature of economic recoveries, every organization will have their hands full with risk mitigation this year.
  • Working Capital
    In a very short time-span, we’ve gone from a credit glut to a credit crunch, and chances are, unless you are among the small minority with flush bank accounts, you’re constantly facing working capital challenges.
  • Shorter Supply Chains
    Since you can no longer afford inventory, you have to move to a demand-driven pull-based model which requires a shorter supply chain to pull-off.
  • Renewed Focus on Safety
    After all of the recent salmonella, melamine, and lead-paint scares, there is a renewed focus on safety around the globe. You need to make sure your safety procedures and independent safety tests are in order, or risk massive fines and lawsuits.
  • Heightened Regulatory Compliance
    In response to the recent consumer product safety fiascos, many countries are stepping up import and export related requirements and introducing new documentary and testing procedures. Are you ready?

The most-likely-to-be-overlooked challenges, less so. But they’re just as important.

  • Technology Upgrades
    You have to do more with less, but your current, aging, software and hardware infrastructure won’t support it. You need new best-of-breed sourcing, procurement, trade, visibility, and analytic solutions as well as a new green infrastructure to run them. That costs money. And even though you can state case-study after case-study and customer success after customer success demonstrating the 2x to 5x ROI the upgrades will deliver, you’ll have trouble navigating the ridiculous obstacle course that the cost-focussed savings-blind CFO will force you through.
  • Sustainability
    Recession or not, the sustainability advocates are not going away. And neither is Generation Y. Since you have to redesign your supply chain anyway, you might as well make sustainability a core requirement.
  • Near Country Sourcing
    Shortening your supply chain is a good start, but you really need to find ways to take advantage of supply sources in your local geography if you truly want to win in the long term. LCCS regions come-and-go, but your neighbors will always be your neighbors. Find mutual opportunities for success and stick around for the long term.
  • Procurement Outsourcing
    Every procurement organization has functions and categories it does well, and functions and categories it does not. It needs to get a handle on the latter, figure out what needs to be done, and then outsource those functions and categories to a professional outsourcing firm that has the expertise to do those functions and categories well.
  • The Path to Procurement Mastery
    If you’ve been keeping up to date with the Hackett and Accenture research, not only do leaders do things different, but they structure their organizations different. In addition to adopting new technologies, methodologies, and supply chain structures, to truly overcome the supply chain challenges of 2009, you’ll have to restructure your organization and intersecting business processes as well. Change management is always a challenge.

Cut Cost with the Supply Chain

A recent article in CPO Agenda on how “supply chains hold the key to cost cutting” covers a recent “Opportunities in Adversity” survey by Ernst & Young across 337 senior supply chain executives. According to the survey, the majority of supply chain executives (83%) reported that their supply chains provided opportunities to lower costs, with a whopping 57% indicating that major cost savings opportunities rest in the supply chain.

This should not be a surprise considering recent findings by Aberdeen, Accenture, Hackett, and many others. The only surprise is that companies still see the need to do these studies. How many studies should it take to convince you that untold savings opportunities lie in your supply chain? That every procurement event is a savings opportunity? That every dollar saved by procurement matches five, ten, and sometimes twenty dollars of revenue brought in by sales? That best-in-class operations see a 6:1 ROI for every dollar spent on their procurement operations? I’d think three would be enough (and by now there are well over thirty). So, what are you waiting for? Hire a consultant (they’re cheap!) and get cracking!

Seven Innovative Paths to Consumer Products Success

Last fall, Strategy + Business published an article on The Unique Advantage that pointed out the trick to succeeding in consumer products industries isn’t necessarily being first to market, but being hard to copy. When you consider that eighty percent of new product introductions in a typical mature industry yield less than $7.5 Million in sales in their first year, it can take a while to recoup that R&D investment, and being hard to copy becomes critical to long term financial success.

So how do you gain that advantage? One way would be to start with the seven suggestions offered by Strategy + Business in the article, which I find to be particularly relevant as, with a few simple tweaks, you can also use the suggestions to transform your procurement organization into a procurement leader as these “best practices” are “hard” to copy without a significant amount of effort and forward thinking by your peers.

  1. Technology
    Technology innovations can yield significant returns in revenue, brand growth, and margins. For example, in health care, new products that match a new technology with a new market need deliver a median brand growth of 11%, double the median growth of 5% for products that address only an existing need. And in procurement, advanced sourcing technologies typically yield 12% savings, while traditional technologies do good to yield half that. Furthermore, technology innovations take time to copy.
  2. Claims
    Claims can add substantial value when they are tied exclusively to a product and can be held for a significant period of time. For example, in 2006, Mars developed a new line of chocolate bars, CocoaVia, which it labeled “heart-healthy” because of the demonstrated cardiovascular benefits of flavanols, a natural antioxidant in cocoa beans. The claim provides a sustainable point of differentiation because Mars owns patents related to processing technologies that are designed to retain higher concentrations of flavanols than regular chocolate manufacturing processes. Similarly, if you adopt a sourcing or procurement technology which an analyst firm hs found to regularly save similar organizations 10% or more, you are much more likely to get quick buy-in across the board, which is necessary for the promised returns.
  3. Ingredient Synonymy
    You can carve out an enviable market position by becoming virtual synonyms for your category — like Kleenex and Planters. Similarly, you can carve out an enviable organizational position of organizational innovator by getting involved in NPD early and helping the development team identify alternative low-cost sources of high-quality materials that can be used in product development.
  4. Unique Brand Characteristics
    Strong brands can build an identity in consumers’ minds that transcends products. This type of positioning can act as a springboard for new opportunities, as it did for Coca-Cola with Zero, Singapore Airlines with “Asian values”, and ESPN in themed-dining. Similarly, if your procurement department is viewed as a leader with unique cost saving capabilities, you’ll become more involved in every aspect of the organization as you’re asked to lead cross-functional teams that will help the organization identify new operational paths that will cut costs and raise revenues.
  5. Product Experience
    Successful products have an emotional component that builds a bridge to consumers, becoming part of their lives. Consumers want the product, and not a cheap imitation. Similarly, successful procurement methodologies and technologies make a user’s job so easy that they want to use the product.
  6. Packaging
    Packaging innovation can leverage technology, emphasize unique brand characteristics, enhance the product experience, and prove very difficult to duplicate. Similarly, a good procurement initiative is packaged in a very effective B2B 3.0 wrapping that promises to make a user’s life easier while improving their value to the business.
  7. Vertical Integration
    If you can keep a tight rein on your unique methods and processes, you can maintain a significant advantage in the consumer goods marketplace. Similarly, if a procurement department can insure that its best practice methodologies are applied consistently and not corrupted, it can ensure that expected savings are realized, making it a corporate hero.

And if you apply leading technology that supports claims of success, become synonymous with innovation, demonstrate a unique aptitude to cutting cost, make your users’ lives easy, package the experience, and keep the chaos under control, since you will, by the very application of these methodologies, also be:

  • Addressing TCO
  • Increasing Spend Under Management
  • Getting a Handle on Procurement Operations Costs
  • Increasing the number of NPDs/NPIS where you have a material role early in the development cycle
  • Managing your Customers and Suppliers

You will be increasing your mastery of procurement, and on your road to becoming the leader that Accenture and Hackett regularly praise in their surveys and book of numbers.