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Strategies to Weather the Recession
I recently attended a conference where a spokesperson from JP Morgan took the audience through various graphs and figures on the state of the U.S. economy. He displayed data on supply and demand figures attempting to explain whether the US economy is in a recession and to what extent the recession would impact future sales activities. His perspective was that the US economy was in recession and that it began back in the December 2007 timeframe. He also explained that unlike previous recessions this one appears to be mild as most businesses have done a great job leveraging initiatives in supply chain management, just-in-time inventory management, and efficient hiring/replacement strategies to mitigate ongoing costs and improve underlying productivity. He also mentioned that unlike previous recessionary periods, this one may prove short, in retrospect, due to a combination of actions taken by the Fed, Congress and business to stimulate consumer spending.
So what’s the opportunity for us as business owners? The opportunity is to take action now to develop and invest in strategies to improve the foundations of our businesses. Doing so will position us for success and improve the ability to leverage the up-tick in post-recession business growth. The opportunity is to focus on the basics and prepare our teams by providing a clear sense of direction of the way ahead.
Sure it’s important to manage costs during periods of revenue decline but it’s equally important to prepare your team with new skills and capabilities for future opportunities. Preparing your team for the future is an essential element of your role as leader. A prepared team is able to grow your business’ top line and strengthen the bottom line by adapting to change in an efficient and expeditious manner.
How might you go about preparing your organization for the opportunities ahead? Consider performing a change readiness assessment to review your organization’s capability to adopt and advance new practices. ASIL’s change readiness assessment focuses on the six pillars of change, those being Direction, Ability, Incentive, Resources, Structure and Actions. By assessing these six areas, a leader can gain valuable insight into the organization’s ability to improve flexibility and nimbleness in developing new capabilities and value propositions.
Managing change is a core value proposition of ASIL, Inc. Our Driving Complex Change® methodology and software applications are designed to empower companies with visibility and understanding into those factors that result in successful cultural change. We offer a variety of services to help you innovate and transform your business. Let us help you achieve new areas of profitability and success.
Contributed by Warren White
August 2008 Spotlight
The Olympics - An Economic Stimulus
The summer Olympics have just ended and China put on one heck of a show. No matter what your thoughts are on the age of participants or the condition of the air or the tragedies that occurred, it was a tremendous level of effort and accomplishment.
The focus and planning to complete the various projects and venues for the games was a Herculean effort in its own right. The resources consumed (literally) were staggering. The scheduling of the people, materials, and activities took years to plan and execute. The impact on China’s economy was huge.
What can we learn from these efforts? First, mountains can be moved through human will and focus. Second, by involving many in the development process ideas and issues can be understood and tested. Third, planning and control are critical to the execution of any vision or objective. The final point is about incentives and I am not speaking about job continuation.
Why is all of this important? An opportunity exists for us all to harness the resources and energy within our teams. When we work together to develop the vision and strategies, ownership is transferred from one to many. This is critical in accomplishing broad sweeping efforts that may take an extended window of time.
How can each of us bring together our resources to make a difference? Start by developing your team and enabling them to dream and take risk. Provide them an environment that encourages them to push the limits, while recognizing that all experiments don’t work. Not sure how to get started, give us a call at ASIL, Inc.
Contributed by Peter Pazmany
Industry Trends
Managing Global Supply Chains: Observations from a McKinsey Survey
A McKinsey Quarterly survey finds supply chain risk is rising sharply. However, supply chain management is not keeping pace with the increase. Most respondents say their companies aren’t meeting strategic goals and relatively few have acted on the global trends.
Executives point to the greater complexity of products and services, higher energy prices, and increasing financial volatility as top factors influencing their supply chain strategies. More than three quarters of the respondents say the degree of supply chain risk their companies face has increased in the past five years, up from almost two-thirds two years ago.
Despite the importance respondents place on these trends, relatively few companies indicate adjustments in planned mitigation actions. Only 35 percent of the executives say their companies have acted in response to the increasing complexity of products and services and only 16 percent to rising energy prices.
The most common trends influencing supply chain strategies are increasing the efficiency of supply chain processes and actively managing risks along the supply chain. It seems when setting strategic goals for supply chains, companies focus first on reducing costs and then on improving customer service.
Executives, whatever the goals of their companies, are expressing frustration in meeting their strategic objectives. Fewer than half of executives surveyed indicate their companies completely meet any strategic goal involving supply chains. Indeed, 43 percent of the survey respondents cited the ability to share knowledge effectively across different manufacturing and sourcing locations was a major challenge and managing communications and cultural differences was a close second at 39 percent.
Trade-offs involving profitability may lead companies to explore changes in their supplier relationships, including leveraging best practices of new supply chain partners. ASIL is highly experienced in supply chain management, supplier selection, and developing supplier relationships to maximize profits and reduce your costs.
ASIL, Inc. can help you manage your Supply Chain risks. Contact us at ASIL, Inc.
Contributed by Michael Singleton
Our Software Products
Click on the links below to view ASIL, Inc.'s MAX Partnering® self paced software demonstrations:
Self Assessment Sample Questionnaire - This demo will enable you to respond to a small sample of self assessment questions focused on change management and create a Heat Map of your responses to see areas that may need attention. The Driving Complex Change® methodology addresses the six areas of Direction, Ability, Incentive, Resources, Structure, and Action that can impact your effectiveness of change management.
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