Questions on Change

questions_of_changeThinking about some further topics around business I thought that supply chains for a company whatever size of company or market was a key topic to touch this time.

Then just thinking this through it really clear that most if not all of us rely upon supply chains and where we fit in that supply. Then looking at it in a lateral way it seems everyone is involved in a supply chain, be it business or just being alive.

So in company terms there are many risks as well as support factors. It seems the key factors are knowing what supply chain we need to keep our business safe and what supply chains we feed up the line to make sure we have a product that will be needed, then immediately we come to the overall topic or where and how will our business stay stable by the demand for our supply keep active in terms of a market.

So in simple terms, we need to have a stable supply chain and we need our part in the supply to market chain stay valid. There are plenty of relatively current situations that indicate a great deal of awareness is necessary to keep our business safe where we fundamentally demand and depend on suppliers. So this raises a further major business topic, how much control should we have on or over the supplier? And in parallel, what companies or markets will continue to need our products in the future?

We could just hold it there and have a lot of topics to raise questions to ourselves or in wider terms for our company. This now raises further topics. What can we do to help those who supply us in the chain and what can we do to help or influence those who buy our products up the supply to market chain?

This all becomes a major subject. Some years back some companies demanded to inspect very closely aspects of their suppliers. This led to quite a complex situation where the buyer in effect was controlling the supplier business and profitability. Again a massive topic but it is difficult to see that approach working in practice long term. It opens many risks, for example if the buyer sees major profit angles in the supplier, apart from price control the other lurking topic is that the buyer may rapidly seek to make the product now supplied themselves. The supplier also has another problem of what if their buying market decided to find another supplier? Major issues here that have to be thought through in personal terms for any company.

Associated with this is the age long issue that if a company has agents then if for example the agent is very good, then the parent company cannot but consider buying that agency? Or setting up their own local company. It reaches a further issue of which is the biggest risk for an agent, to be not very successful and avoid a company setting up its own branch company in the market or be very successful and risk major take-over issues. I have briefly touched this topic.

I bring this further topic in because it directly touches some facets of supply chains. Only this is a direct example common for many companies. You can scale it down to say a one or two person company and the same principle applies, the temptation to just employ the few supply individuals in that small company. Good in some respects but many small companies wish to stay independent, that’s part of why they set up in the first place!

Probably having raised the various issues I will leave it there. Yes to some extent there are answers for these issues but the idea is to encourage the thinking in and around the issues for your own company. To some extent there are answers but this is a small set of notes and thoughts that has already grown too long. Maybe next time I will write a few notes on the subject of Change. It is guaranteed to happen and has many fascinating aspects.

Product specification just as important as product completion

It seems a good time to have a few words about Product specification and just as important product completion.

Apples product

There are many issues we could discuss about Products and the variations on that theme. So just a few thoughts might be useful.
The first and obvious way to avoid risk is to make sure a product is complete. But moving close to this is the topic of what is a Product? Taking an apparently simple approach we might first consider what we see around us, namely Supermarkets.

Looking at this in a deliberately simple way we might say their product is food or plants or clothes etc., no need to go the whole range of what they sell. But are these the real or whole meaning of Product? Thinking in a vertical way we may be saying that we well understand what they sell. There is a drawback to vertical thinking on this point, at some time, if not most times the competition demands a form of price war, built maybe around special offers etc. or some kind of discount or a volume deal that can have many meanings to stock control and supplier situations, a whole big topic that I don’t touch in these few notes.

But what is the possible situation in regard to a Product if we apply some lateral thinking? At first glance we might start to see the supermarket Product is the feeling of confidence that a person feels when the think about the store or when they are in it. We can expand this in many ways, another might be the product is the feeling of being more peaceful because of the ease of parking, it might be a feeling of being more confident that their limited cash can cover what they think they need. So we could continue this and get to the point where maybe the customer is more comfortable there due to the kind of folks who they see shopping there. So what is a Product? I chose not to define this, but leave you to think about it in a Lateral way.

Well it is easy to just catch a glimpse of what a product really is, it can of course have a number of definitions. But at a glance I have moved the discussion on what product a superstore offers away from the more apparent product of food etc. Why take a lateral view of what is the product, well it gives space for another kind of differentiation in terms of competition and allows the supermarket another world of attracting customers, other than a simple price war. I don’t pretend for one moment this covers the whole topic.

So if it happens that you are in a Company start-up situation with a product such as a wheel, I use this to avoid crossing too many paths, we can call it product X so that we keep to the topic of product definition. Now to horizontally expand the thinking is what you intend to bring to market really defined as a Product? Meaning also is it going into a market that already has access to wheels, for example only, or is it a product that has not been brought to market before? Be sure if it is going into a competitive market there will be a high cost of entry, and if into a market that does not appear to exist, there will also be a high cost of developing that market.

So whether this is a big store issue or a solo start-up company product definition is the real critical issue, this at first glance looks simple but a lot of success or failure can swing on product definition. Giving a simple example, deliberately to make the basic point, as a Product the wheel can allow more progress with less effort. Now we can expand this into a real long list of how a wheel is used. But the product definition can make or break the market entry. Apply some lateral thinking and ask yourself questions, what can my product be in terms of product definition? Another question issue might be how many big or small companies have failed because they possibly failed to understand what product they really had? I raise the issue, not going into the many reasons why they might have failed.

So wherever you are in your business, thinking to start or already being famous etc., there is always room to look away from the obvious and think in lateral terms, what really is your product? It might give you quite a start over potential competition.

Next time we might take a look at down the line supplier issues and distribution. A potential make or break issue for many companies, whatever their status.

Thinking of starting a new business

new_shootsWelcome to our monthly Business clinic where we will endeavour to give advice and practical information on running your business or if you are even thinking of starting one.

Our monthly column will be written by Peter our chairman. Peter has a wealth of information gained over many years in various business around the world. Below is a brief biography of Peter.

This first post is introducing myself, my business experience comes from many years in various businesses both in the UK and also around the world,and becoming involved in the scientific, industrial and at times academic action and at various levels of management. Both at corporate level,intermediate management level and in forming my own very small companies.

My responsibilities also included being involved in the  merging and acquisition of various different companies.Expansion and sale of companies This has enabled me to gain many  aspects of understanding how companies are run, business expansion and how to manage change.

In the next post we will start to touch some basic but key topics that affect company success in both start up and ongoing company development and risk areas. Topics that are key in this very tight economic climate for business.

Feel free to leave any comments below.