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Growing Profitability in Uncertain Times
GENCO Marketplace is one of the largest liquidators of overstock merchandise and retail returns. In 2006, as the company’s the new president, I recognized an opportunity to significantly grow our share of this $84 billion U.S. liquidation market. But it would require a transformation of our culture and operational approach. We needed to become a more aggressive, buyer-driven company. To assist in designing and implementing this change, I reached out to Pete Pazmany and his team at ASIL, Inc.
ASIL began with a thorough examination of the company’s processes. They held up a mirror to GENCO Marketplace that helped us clearly recognize the areas of opportunity. Importantly, ASIL accompanied this “as is” analysis with a milestone-driven roadmap to change. The proposed transformation was significant. Using their skill and experience in corporate change management, ASIL helped introduce and manage the change with minimal turnover and increased staff enthusiasm.
There were three phases of change. The first was organizational. ASIL monitored sales staff activity and determined that only two hours per day was spent proactively selling to prospective buyers. The remaining time was spent on sales administration. ASIL developed an organizational model that separated responsibility for sales administration and buyer development and oversaw a training effort to facilitate the change. Result: a 125% increase in sales time available to expand the buyer base.
The next phase involved using GENCO Marketplace systems to automatically match available sales lots with specific buyers based on past purchases. ASIL worked with our systems team to map these businesses processes. By having information immediately available through an intuitive user interface, sales staff can contact likely buyers armed with a complete history of their past purchases and the price paid. Result: more sales in less time.
One of the most significant and innovative changes we have enacted, with ASIL’s assistance, is the Turbo Buyer Program (patent pending). This program allows buyers to automatically purchase certain product lots as they become available, avoiding the time and labor involved in typical order processing. By establishing a pre-funded account with GENCO Marketplace, buyers can guarantee a predictable supply of specific products at agreed prices. Our system matches buyer preferences with available lots and automatically triggers purchase documentation, shipping, and electronic transfer of funds. Result: improved sales productivity, reduced warehouse and office labor, and rapid liquidation.
One key to the success of our partnership is ASIL’s adaptive approach. They have a remarkable ability to adjust to unforeseen circumstances. For example, during the course of our three-phased change effort, GENCO Marketplace began a large refurbishment project that, shortly after it started, began losing significant money. The ASIL team stepped in, examined the work processes and determined that much of our labor costs were unwarranted since the market value of 70% of the products we handled was not sufficient to warrant refurbishment. This analysis provided us with objective evidence to convince the client to forego the extra processing, saving GENCO Marketplace $500,000 - $750,000 and saving the client $150,000.
Our partnership with ASIL enabled a transformation of our organization, thereby increasing revenue, reducing costs and delivering a more profitable bottom line. As we head into 2009 we will continue to team with the professionals from ASIL.
Contributed by Robert Auray Jr. President/CEO GENCO Marketplace
Feature Article
Economic Uncertainty – What is a Supply Chain Manager to do?
Six months ago who would have thought the DJIA would drop 32%, Lehman Brothers would go into bankruptcy, AIG would require multiple insertions of cash by the U.S. government and that same government would be forced to take an active role in saving the nation’s credit and lending markets? Two months ago the price of NYMEX crude oil was selling at $145 a barrel and now, just a few months later, the price per barrel is hovering around $67 a barrel. These are turbulent times in the United States and across the globe.
Logistics and Supply Chain Professionals are pros when it comes to managing during turbulent times. During the last few decades they have had to establish global supply chains to take advantage of global market capabilities, alter distribution strategies to reduce fuel consumption, and continue to design effective operational processes while driving out costs and increasing customer satisfaction year over year. These teams are no stranger to the market and economic forces requiring change. So what lessons can we apply to these uncertain times?
Develop a Plan: It’s time for you, and your staff, to take some time out of the day-to-day activities to continually pulse market conditions and develop a set of short-mid term strategies to potentially mitigate possible future risks. In doing so, the approach should be a facilitated session where the team explores existing conditions, visible trends/changes in the market, a risk analysis of the company’s products and services sales forecasts, and the development of P&L forecast scenarios based on any potential risks becoming real.
Focus on Talent: Prepare yourself to make sound decisions when it comes to your talent pool. Assess your talent requirements (short-mid-long term), your current capabilities and competencies, and develop a gap analysis. Assess the talent investment requirements and risks of foregoing those investments and develop a go-forward plan.
Assess your Supplier Portfolio: Difficult times require a rethink of your supplier architecture. Are the suppliers you are using the most effective, are they still viable and financially sound, are they willing to be flexible, and are they committed to mutual success? Consider altering suppliers or renegotiating existing payment terms so that both parties remain profitable during these times of change.
Maximize your Investments: Now is a time for prioritization. You may not be able to continue to invest in strategies developed six months ago. Review your investment strategies for those that will focus protect profitability and maximize your potential for market leadership.
Be Flexible with your Customers: Consider developing and instituting practices to allow your customers more flexible payment options. Gain-sharing plans may be a way to develop flexibility and show willingness to “share the pain”. Being flexible will go far in cementing a long-term relationship with your customers.
These are clearly a time of great change for our economy. Leaders understand that change can be a driver of much stress or an opportunity of much greatness.
Managing change is the core value proposition of ASIL, Inc. Our Driving Complex Change® methodology and software is 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. We’re not simply theorists but pragmatic and experienced operational executives with a track record of managing successful change. Let us help you achieve new areas of profitability and success in this changing economy.
Contributed by Warren White
October 2008 Spotlight
October Spotlight: Data Mobility – How secure is it?
Today’s fast paced business world requires us to move tons of data all over the world instantaneously. We are bombarded with the newest ways to move data and share information, from the internet to laptops to cell phones and more. The storage capability contained in any of these devices is staggering, yet as consumers we needed the ability to have storage be even more mobile, hence the storage stick.
These wonderful little peripherals can hold lots of data and information. They are very convenient to use and enable presenters to quickly load their presentation without having to lug around another computer. The cost has been brought down to earth and the volumes being shipped are in the 100’s of millions.
Many companies are stamping their names on them and handing them out to their employees or clients to help increase their productivity. What is not to like about low cost, easy of use, and mobility? How about security? That’s right security.
Reports suggest that there are millions of laptops lost each year throughout the airports around the world. Most of these may have a few files of value, but they are typically scrubbed clean and resold. So while the loss of the laptop is real, the breach of data is still secure in the majority of the cases.
Now let’s examine the storage stick. Typically these only carry files or information of importance. This information is not secure at all. Anyone can find or take a stick and insert it into a USB port and have immediate access to the data. The size of the device is easy to forget, and the cost being so cheap, it becomes no big deal.
So what can you do to increase the security of your data? Start by communicating the risks and benefits of mobile storage devices. Alert people to look for unattended devices within your business area and to be mindful of the proprietary nature of the data stored. In other words, help to shape a new culture of awareness that can benefit from technology, while safeguarding the company assets. It won’t be easy, but STICK with it.
Contributed by Peter Pazmany
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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