Black Friday shopping… minus the shopping??

Boats and Cargo Containers on the NJ Transit Cheesequake Creek Draw Bridge

 

There is no questioning the importance of supply chain management to a successful business.  A supply chain disruption causes production to come to a screeching halt and has negative effects on business performance and shareholder value.  When we discussed this topic in class, I could not help but think about the magnitude of issues that results from a disruption to the system.  Especially with the pressure to improve efficiency and reduce operating costs, supply chain systems are becoming increasingly more complex and involved that one major disruption could end up costing a company a significant amount of money.  Not long after discussing OM in the News examples in class of disruptions to supply chain management did we experience a devastating hurricane that not only affected the lives of those on the East Coast but also affected businesses everywhere.

Hurricane Sandy was unforgiving as she tore through the East Coast.  Articles such as Holiday Shopping Is Being Threatened By Crippled Supply Chains are surfacing everywhere speaking about the devastating consequences that came from damages to supply chains.  Retailers suffered a huge blow because of all the damages to ports and rail lines, along with destroyed warehouses full of merchandise.  The effects of Hurricane Sandy may carry over into the holiday season and affect forecasted sales for countless businesses.

Although these situations are less than desirable, they occur.  I was curious about what businesses could do to soften the blow and be more prepared for these situations.  I came across an article in the Wall Street Journal that tackled these very questions and had some insightful suggestions.  Command and Control: Managing Supply Chain Risk interviewed Kelly Marchese, a principal with Deloitte Consulting LLP who specializes is supply chain management, regarding potential threats and risks the affect the supply chain and how business can be more prepared to sufficiently handle the situation.

Kelly’s response was that companies need to make updating their technology a priority.  Too many companies are attempting to manage global supply chains with technology that dates back 5+ years.  The most important tool is to use technologies that provide simulation, visualization, and analytical capabilities.  These new technologies have different benefits such as allowing managers to simulate different improvement initiatives and their impacts before actually implementing them.  Kelly also stresses the importance of updating information management architecture to better connect all of the facilities and sites in the supply chain, especially since critical supply chain data from specific locations or regions is often overlooked since it isn’t available.  However, these technologies do come at a cost and these costs may be difficult to justify, especially in our struggling economy.

Do you think that improving technology is enough to solve a problem that has severe consequences to businesses?  Is there anything else that supply chain managers should focus on to be better prepared for these moments of crisis?

 

 

 

Move over Nike… FILA’s making a comeback

Paris Hilton for FILA

When considering our class discussion of product placement and the product life cycle, I wondered how that would apply to a company that was already established and looking to ‘revamp’ their image.  A newer company has the advantage of a clean slate and a fresh approach to whatever service or good they are looking to provide; yet a company that already has a reputation that they want to break free from must have a well thought out strategy to help them accomplish this.

I came across this article in the Economic Times that was a live example of what I was curious about.  How FILA’s Gene Yoon plans to build a strong brand presence in India The article’s focus was Gene S. Yoon, Fila’s global chairman, and his strategy to break away from FILA’s image as a non-aggressive brand and become successful in India’s marketplace.  This article was an interesting supplement to several of our class topics, but especially on product life cycles and product decision.

The Indian marketplace has become the focus of FILA’s strategic efforts at competitive advantage.  Bata was the original company that dominated the marketplace; however Nike and Adidas have found success in this marketplace and FILA is hoping they will as well.  While Nike is known for “Just Do It” and Adidas says “Impossible Is Nothing”, Fila’s first priority is to decide on a tagline that will effectively differentiate them from their competitors.

Fila’s main strategy for competitive advantage appears to be rapid response.  FILA is one of the only brands that allows each retailer to devise regional marketing plans.  Aside from the logo, FILA gives retailers creative freedom in regards to color, fabric choice and design allows them to tailor each product to local preferences.  This strategy will assist in the growth of the brand throughout numerous markets.  FILA is also focusing on differentiation and their general ‘cool factor’ by signing on celebrities, such as Paris Hilton, which aided in their success in outgrowing other markets in Korea.

FILA is currently present in 40 exclusive stores in India, and Yoon forecast’s the number to increase to 100 stores by 2014.  I believe in Fila’s strategy to succeed in the Indian marketplace, however I do think they need to have a more focused strategy.  I understand the idea behind regional marketing plans, I just think that they would be more successful if they have a definitive tagline and ensure that each product that is developed embodies what they are trying to represent.  FILA expresses their interest in being a lifestyle brand, and in order for them to prevail, focus is needed in all areas of product development.

Do you believe that FILA’s strategic plan will be successful? Or do you think that regardless of their attempts, they will not be able to break away from their reputation of being non-aggressive and not very “cool”?