May 10, 2009 | Demand chains
Over many years of being involved in the evolution of demand chains, there appears to be a number of stages through which they evolve. It is almost always iterative, often with many false starts and dead ends, but those that persist, display the following stages:
- Catalyst. At some point, someone yells, “There must be a better way!”. Generally this happens in tough times, about now would be appropriate.
- Pre-chain. This occurs as a few look around at the data, and wider commercial environment trying to identify a better way for them. Most do not go beyond this investigation, as it now starts to get hard.
- Cautious first steps. Generally a relatively simple collaboration centered around something they all use or need, such as carton, transport or service supply, that is essentially non competitive.
- Commitment to a chain as a competitive differentiator. Key here is to collaborate using information that in less enlightened times would have been seen as proprietary.
- Evolution to a demand chain. This takes time, commitment and is a journey with no end, just an evolving chain that continually improves its ability to react to short term changes in consumer demand, as well as being sufficiently adaptable to evolve its business model to accommodate evolution in the commercial environment. Examples of true demand chains are few and far between. Dell computers lauded “build to order” business model is the best known example of a large business that acts as a manager of a demand chain. It is one of the many models around, largely housed in small businesses where the strains of dumping the status quo are more easily managed.
May 8, 2009 | Marketing, Uncategorized
In a recent blog I mused about the business model of the newspaper industry, wondering if it could survive , given the inroads of the web. It is also reasonable to ask if the e-paper can survive without the paper version.
How hard wired is the behavior that leads to people relating to the paper version, and is there a mid point like Amazons Kindle?
The brands that the e-papers are seeking to leverage are all the result of the old version, none have so far made anything of a dent in the task of building a newspaper brand in cyberspace.
I think this tells us something about the manner in which humans like to relate to brands, preferable if they are physical in some way, the impact of a tactile experience with a product imprints the brand better than an “e-experience” alone
May 6, 2009 | Demand chains
The uneven distribution of power in a supply chain is the norm. To move beyond simple supply to a value chain, or further to a demand chain, the decision making power needs to be distributed more evenly through the chain via collaborative mechanisms.
The ultimate collaborative mechanism is transparency of information, which puts decision making at the point where it adds most value to the operator at that point in the chain, as well as maximising the value to the whole chain, particularly to the end consumer. It removes the pricing power that accumulates with information at points of arbitrage in a chain.
May 6, 2009 | Demand chains
Two weeks ago, on coming to an agreement with a new client, sealed with a handshake, I indicated I would send him a letter that outlined our agreement. Pretty standard practice in my industry, but his response surprised me.
He asked ” do we need our agreement in writing because you do not trust me, or is it because you do not warrant my trust?”
Recovering from that was interesting, and it remined me that trust, emerging from the behaviour of the parties, is the basis of all successful demand chains.
Contracts codify expected behavior, and specify what is allowed, and what is not. By inference, if it is not stated as being banned, it is OK, and vice versa.
What does that do to the very basis of successful and mutually beneficial relationships: trust?
If you cannot trust someone, having a contract will not change that, it just outlines the basis on which the sanctions will be applied.
May 4, 2009 | Strategy
All of my four kids were elite athletes, petty unusual in one family, particularly as the sports they excelled in were different.
Apart from being naturally very good athletes, and being prepared to work very hard, they have one common trait: They all visualised the “finish line”, and the route to get there.
My daughter, a gymnast would close her eyes, and physically move through the whole routine on the floor, before mounting the apparatus, my youngest a butterfly swimmer, would stand behind the blocks, eyes closed, and get the rhythm of the stroke going, (looked a bit weird) and the other two, in their way would do the same for their sport.
Try the same thing in your business, visualise the end point, think and “feel” your way through the steps, do it again and again, and succeeding becomes the normal state of affairs, rather than something unusual.
