Feature Article
Cabotage
Leveraging Your Mexican Operations to
Reduce Logistics Expense
Recently President Obama and President Calderon announced an agreement to establish a program to allow U.S. and Mexican carriers to operate on both sides of the border. In return, Mexico will reduce and eventually eliminate tariffs imposed on transported goods supported under the agreement (DC Velocity, March 2011). While the legislation is still in its infancy, the opportunity is to begin planning now how your organization might leverage this legislation to reduce your ongoing cost of goods sold in the years ahead.
Transportation of goods into and out of Mexico is regulated under the U.S. Department of Transportation. A document titled “Cabotage: Mexico-Domiciled Motor Carriers”, provides a variety of answers to questions as to what is and is not acceptable under current transportation regulations between the two countries. (U.S Department of Transportation FMCSA-ESO-07-04). Cabotage is defined as the “trade or transport in coastal waters or airspace or between two points within a country” (www.m-w.com).
In addition to the regulations published above, a company should also take into consideration the following when transporting goods into and throughout Mexico. These include:
Diversify your carrier base to accommodate shifts in demand, availability of resources, and specific requirements for your portfolio of products.
Ensure customs brokers and transportation partners have appropriate knowledge and tools to provide visibility, tracking, and efficient movement of goods.
Migrate your accounting practices to accommodate the purchase of services in local currency to mitigate effects of exchange rate variations.
Do not assume that Mexican insurance programs will reduce your risk and accommodate any variation in value in the event of product shrinkage and loss.
For decades U.S. companies have enjoyed a strong business case for using and leveraging operations in Mexico as part of an effective and efficient service and manufacturing supply chain design. Our partners to the south have proven very capable and committed providers of goods and services. The opportunity is to ensure that supply chain designs, applying a Mexican capability, are constructed so as to reduce operating risk and ongoing business expense. Knowing regulations, developing and fostering local partnerships, being active in measuring performance, and being flexible as new regulations are enacted will provide you a foundation from which to continue to create mutually beneficial outcomes.
Is your business leveraging Mexican assets as part of your Supply Chain design? Are you getting the results you desire? If not, then consider reaching out to experts for guidance and support. ASIL consultants are Service and Supply Chain professionals with over 100 years’ experience in Domestic and International Service and Supply Chains. We know what it takes to create success now and into the future. We have a proven track record of pragmatic and creative solutions and welcome the opportunity to help navigate your journey to successful outcomes. Call us today at 408-980-9904 and let us help you achieve new areas of visibility, profitability and success in this ever changing economic climate.
Contributed by Warren White
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Spotlight
Effective use of Marketing
Marketing can make or break a company. The ability to effectively communicate your message or value proposition is fundamental to any level of success. Billions of dollars are spent annually by companies seeking to get your attention and business. Yet even with all the money, many companies fail to connect and get potential customers to care or take action.
While having the money to spend is critical, it is secondary to targeting your audience and messaging them in consumable bites. Whether you are managing the image of the company, a product promotion or any other important activity, we must remember that consumers are constantly being bombarded with messaging. The difference between success and failure can be a fine line. To increase your company’s success consider the following items as you plan your Marketing strategies or next campaign:
Know your audience – Understanding who the audience is and what they desire is critical to developing your approach and messaging to get an opportunity. Shotgun approaches that target everyone rarely hit anyone.
Keep the message simple – The fastest way to lose an audience is to overwhelm them with detail. If you need to share a novel, don’t! Focus on the salient points of interest to the Customer. Keep working your messaging until it becomes clear and concise.
Motivate with a compelling offer – Customers want to know the WHAM factor; What Here Applies to Me. They are always looking for relevance. Give them something that compels them to take action. This can include: addressing a critical concern, opening a new horizon, or incenting them through promotional activity. Ultimately, we are trying to get them to engage, make contact, or close a deal.
Include a clear call to action – Don’t leave them guessing what to expect next. Be clear and focused to obtain a meaningful outcome. The first contact was hard, the next ones become easier. You will lose them if you leaving them hanging.
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Repetition is critical- If it doesn’t work the first time, refine and try again. Persistence and repetition are important elements to winning an opportunity. Always listen and seek feedback.
Marketing can be very successful when focused and well defined. As a client once said “be clear, be quick, be gone”, and then make sure to listen and keep coming back. “No, doesn’t always mean No.” Timing and the art of packaging/delivery are keys. The professionals at ASIL (408-980-9904) can help you to review and refine your approach to grow your revenue and profits.
Contributed by Peter Pazmany
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Industry Trends
Driving Successful Change
Successful change is far too rare in the workplace in comparison to how often change is occurring. Approximately 80% of most change efforts fail due to a lack of understanding around the change itself. Change is attempted without careful calculation of the effect on the organization will have little chance of success. Change must be supported by management and the employees in order for it to be successful.
ASIL's Driving Complex Change® methodology deals with six factors surrounding successful change, including; Direction, Ability, Incentive, Resources, Structures, and Action. Each of these factors must be addressed in order to implement a successful change initiative.
Direction - Where are we headed?
The quality of the vision, strategies, and executive stakeholder support is critical to the success of any project. Establishing the direction is key to providing stability and a reference point for the change.
Ability - What can we truly do?
Core competency skills and environmental considerations must be taken into account for the organization to adopt new practices. Focusing on the readily available abilities to help the change is crucial. Understanding what new skills may be needed to support the new change must be considered as well.
Incentive - What will drive the change?
Understand the availability of programs that drive the behaviors necessary to advance the support and adopt the change initiative. Supporting the motivation for successful change will provide energy to the entire change process. Finding ways to incentivize making and sustaining change will be a unique challenge to each company.
Resources - What is at our disposal?
A successful outcome will depend on the appropriate allocation of human, fiscal, and technology resources. Achieving a desired state from change requires proper resources to help supplement the activities needed. Proper allocation of resource also affects how quickly the change will happen.
Structure - How does company's structure support the change?
A company's business systems and organizational structure are critical to the predictability of a successful change. The structure of the company's quality control and reporting are also pivotal areas that will foster or hinder the desired change.
Action - Do we have the tools in place to support and implement the change?
Without action no change can occur. It is important to execute against detailed and integrated project plans and communication strategies as well as having processes to manage issues, shortfalls, and escalations.
Integrating these change mechanisms within your company will result in a successful change initiative. Change is not a process that can be implemented without planning. The efforts will most likely fail without it due to the natural resistance of the organization to embrace change. If you or your company is struggling with a change initiative, contact ASIL at 408-980-9904 to discuss how we can help.
Contributed by Joe Pazmany
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Our Software Products
Click on the links below to view ASIL, Inc.'s MAX Partnering® self-paced software demonstrations:
Strategies and Execution - This demo depicts the tools that organizations can utilize to embrace change effectively and implement it successfully.
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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