Sep 30, 2011 | Change, Leadership, Management, Operations, Personal Rant, Small business
The news that Fosters will be sold to SA Miller Brewing represents almost the last Australian food and beverage business with a global brand has now disappeared. I say almost, as I can think of no other, but some may argue that a few sales in Fiji or NZ constitutes global. To my mind, it does not rate.
Why is it that we seem to be unable to build and sustain food businesses from this country?.
Australia is now a net importer of packaged food, according to the AFGC 2010 report, and yet we are an abundant producer, particularly of broadacre commodities, grain and meat. Most people when told we are a net importer go into a state of disbelief, and yet the march of imported food, and the decline of Australia’s manufacturing base has been happening slowly over a long period.
It’s pretty easy to blame the evolution of globalisation of supply chains, the domination of Woolworths and Coles, regulation imposing costs overseas competitors do not have, the geographic spread and relatively sparse population denying the economies of scale, but the reality is that it is a management failure. The failure is shared by boards and shareholders who have tolerated a complacent management, discouraged long term strategy in the chase for short term returns, and simply disengaged with the basic drivers of competitiveness over a long period.
The only hope left is that a few SME’s will emerge from the heavily culled pack that remains, but it seems to me that they have missed the boat, and the barriers that the businesses that existed 30 years ago, and should have breasted, are now simply too high for the small guys to tackle without the scale and capital resources necessary. Our one hope is that there is a processing breakthrough, technologies like the CSIRO High Pressure Processing technology offer some hope, but they are unlikely to be the savior by themselves.
Almost gone, down to the last gasp, what on earth will we do then? Or don’t we care?
Sep 28, 2011 | Lean, Management
Years ago as a senior manager in a large organisation, part of the monthly routine was to write an APP report: Achievements, Problems, Plans, kept to an A4 page, used as a scene setter for the more detailed monthly report.
At the time it was a pain in the posterior, generally done at the last minute, with the objective of getting it done, rather than communicating the context of the rest of the report.
In short, a squandered opportunity.
How much better it would have been to use the APP as a summary of the context and detail of the functional responsibility I carried, something that had performance measures built in, and that was useful. In time it may have evolved into an A3 type report that I have more recently been using as the core tool of project planning, but the attitude that it was just a pain eliminated the opportunity to be creative and constructive with it.
How many good ideas are being squandered in your environment?
Sep 22, 2011 | Leadership, Management, Operations, Small business
One of my clients, a modest sized business inhabiting a narrowing but quite deep niche of manufacturing, has over a period of time put considerable resources into training their essenial technical people to be expert in the fields vital to their success.
A topic of discussion and concern has always been, “how do I get my investment back when I train them, and they leave?”
Perhaps the better question to ask is “what happens if we do not train them, and they stay?”
Sep 21, 2011 | Communication, Management, Social Media
What a great term, coined by Euan Semple, to describe the phenomenon of older (largely) male senior executives pretending they have “got” social media.
Like many others, I spend a lot of time trying to persuade people of the value that can be generated by intelligent use of social media, most of those people run enterprises, and usually reluctantly can be persuaded to put a modest amount of resources into SM, often I think because their golf partner was telling them on the 19th last week that he has been able to cut the advertising budget by 50% by using SM.
Anyway, they become superficially engaged, in their hearts thinking this social media stuff is just their almost adult children behaving badly and then for some inexplicable reason, posting the footage on face book.
The term “Dad Dancing,” perfectly invokes a picture of the gyrations and uncoordinated usually frenetic and short term activity that emerges from such a conversion.
Sep 16, 2011 | Customers, Management, Sales, Small business
SME’s in the Australian food industry are up against it if they see their futures as suppliers to the major chains, who require a combination of utter commitment, globally competitive costs, and supply certainty requiring substantial scale and the attendant capital base.
Added to all that, small business has it all in front of them in any stoush with a large corporation. Metcash, the nations largest wholesaler, and effectively the third force in Australian FMCG via its supply arrangements with independent retailers seems to relish a fight.
They chose to fight Andrew Bunn, a small retailer in Canberra who went to the wall, and then accused Metcash of breaking their supply contract. The blue Metcash then picked with the ACCC over their proposed purchase of Franklins has been entertaining. Metcash informed the ACCC they would go ahead with their purchase of the Franklins chain from Pick n Pay before the ACCC delivered its decision, ballsy call, justified as the Federal Court gave them the go-ahead, but the ACCC is now appealing the decision. Who knows what will happen next, but the ACCC must assert its power in the marketplace or become irrelevant, but whilst the legal stuff drags on Franklins is bleeding cash, virtually removing them from the scene as an ongoing concern, whoever owns them.
I’m sure there is more to come, but none of it matters much to the SME manufacturer facing a small number of retail gorillas who exercise their power ruthlessly, and without any empathy with their suppliers. The ghost of Eric Bender who inhabits the memory of the few of us still around who dealt with him, would shake his head in dismay, and take another drag.
Sep 8, 2011 | Customers, Management, Marketing, Operations, Small business
The mulitnational Heinz has been in the news a bit recently.
First, they announce a restructure, which means closing plants, and consolidating production, in this case to NZ, and to a remaining Australian plant that will get a bit of a kick-along. Wonder how long that will last?
Then the worldwide CFO Art Winkleblack took aim at the retail duopoly in Australia, citing it as a reason for the difficulties Heinz has had, and as a basis of the restructuring decisions. I bet the local sales management loved him for it, the next time they had to front Coles and Woolies!
In a short period, the challenges of the industry are laid bare, the $A making imports cheaper, the power exercised by the retail duopoly, and the necessity of manufacturing and marketing scale to counter it.
If Heinz, a global business turning over close to a billion dollars in Australia, and many more globally has these problems, put yourself in the position of the SME, with little marketing leverage, a plant that needs capital, banks that are so risk averse, and so stripped of people who understand small business they simply choose not to engage, how can the little guy hope to sustain his business?. Pure bloody mindedness and determination is about the only answer you will come up with, mixed in with a spirit of being prepared to really have a go, and screw the buggars!.
We wonder why we have more imports of packaged food products into this country than we produce, the position Heinz finds itself in demonstrates why.
