CG Survival Guide, Part 2: Five More Ways to Outlive the Recession
December 23, 2008 -- As we head into 2009, chances are that your New Year's resolution has something to do with managing your time and money better, saving more and spending less. In these times of economic hardship, senior-level consumer goods executives everywhere are probably making the same resolutions for their companies' future. Last week, CGT published five survival tips from our Research Advisory Board members that can help your company outlive this recession. Today, they offer five more valuable tips, which are guaranteed to help your company stick to its New Year's resolutions.
Survival Tip #6: Don't Compromise Service
Minimize wasteful spending and learn to invest in satisfaction drivers to make sure your clients know that you're not letting current conditions slow you down. They need to be reassured too, and your actions will speak volumes to them about your view of the future as well as your approach to overcoming the challenges of today. -- Cheryl Perkins, InnovationEdge
Survival Tip #7: Aggressively Trim your Product Line
Even though manufacturing is becoming more flexible every day, the proliferation of SKUs wreaks havoc on the production schedule, not to mention the inventory management challenges. High SKU count also makes forecast accuracy/supply chain planning more complicated, and with the growth of private label, if manufacturers don't get their SKU-house in order, retailers will do it for them. And don't just use cost information to identify which products to cut - use historical demand information to support the decision. -- Kimberly Knickle and Simon Ellis, Manufacturing Insights, an IDC company
Survival Tip #8: Build Demand-Driven Supply Management Capabilities
Food and beverage companies historically have invested less than other consumer products segments in supply chain planning technologies, and they also have a lower performance on long-term forecasting. A good long-term forecast is the foundation of strong buy-side strategies. Without it, companies are literally up a creek without a paddle, especially in this market of turbulent commodity prices. If companies don't have strong, long-term forecasting processes, they need to bite the bullet and invest in improvements through business process outsourcing. -- Lora Cecere, AMR Research
Survival Tip #9: Implement Insightful Price Changes
This is the ideal time to keep the selling price steady, but slightly reduce and/or change packaging size or content quantities to save a bit on each unit -- achieving a better price point per unit. Ice creams and cereals have done this very well in 2008. Has anyone noticed how much smaller the grocery store containers are these days? Smaller ice cream containers have a positive impact on obesity rates to boot. -- Thomas Bornemann, Clarkston Consulting
Survival Tip #10: Focus on Maintaining a Balance
In times of stress, the less mature organization reacts too suddenly to market issues and throws the supply chain out of balance. Stay the course by focusing on balance in metric tradeoffs, sales and operations planning (S&OP), and product, supply and demand cycles. -- Lora Cecere, AMR Research
Did you miss Survival Tips #1 through #5? Click here to read Part 1 of this series.
Survival Tip #6: Don't Compromise Service
Minimize wasteful spending and learn to invest in satisfaction drivers to make sure your clients know that you're not letting current conditions slow you down. They need to be reassured too, and your actions will speak volumes to them about your view of the future as well as your approach to overcoming the challenges of today. -- Cheryl Perkins, InnovationEdge
Survival Tip #7: Aggressively Trim your Product Line
Even though manufacturing is becoming more flexible every day, the proliferation of SKUs wreaks havoc on the production schedule, not to mention the inventory management challenges. High SKU count also makes forecast accuracy/supply chain planning more complicated, and with the growth of private label, if manufacturers don't get their SKU-house in order, retailers will do it for them. And don't just use cost information to identify which products to cut - use historical demand information to support the decision. -- Kimberly Knickle and Simon Ellis, Manufacturing Insights, an IDC company
Survival Tip #8: Build Demand-Driven Supply Management Capabilities
Food and beverage companies historically have invested less than other consumer products segments in supply chain planning technologies, and they also have a lower performance on long-term forecasting. A good long-term forecast is the foundation of strong buy-side strategies. Without it, companies are literally up a creek without a paddle, especially in this market of turbulent commodity prices. If companies don't have strong, long-term forecasting processes, they need to bite the bullet and invest in improvements through business process outsourcing. -- Lora Cecere, AMR Research
Survival Tip #9: Implement Insightful Price Changes
This is the ideal time to keep the selling price steady, but slightly reduce and/or change packaging size or content quantities to save a bit on each unit -- achieving a better price point per unit. Ice creams and cereals have done this very well in 2008. Has anyone noticed how much smaller the grocery store containers are these days? Smaller ice cream containers have a positive impact on obesity rates to boot. -- Thomas Bornemann, Clarkston Consulting
Survival Tip #10: Focus on Maintaining a Balance
In times of stress, the less mature organization reacts too suddenly to market issues and throws the supply chain out of balance. Stay the course by focusing on balance in metric tradeoffs, sales and operations planning (S&OP), and product, supply and demand cycles. -- Lora Cecere, AMR Research
Did you miss Survival Tips #1 through #5? Click here to read Part 1 of this series.