One of the major factors that has changed the business landscape in the past decade is the shift in buying power. What was once the control of companies -- to determine what products to sell, when to sell them and how much to charge for them -- has completely reversed. Today, if companies don't have what customers want, when they want it, at the price they're willing to pay, they will go elsewhere to get it. Bottom line: end customers are in control.
This shift in power has made it much more difficult for global businesses to predict buying habits, which are forcing them to find ways to increase levels of flexibility and responsiveness. And, empowerment of consumers will only increase over time, creating even more pressure for companies to improve their competitive position or risk being left behind.
If the operational challenge to become more nimble in responding to customer demand wasn't challenging enough, global businesses are feeling intense pressure to reduce costs while increasing quality. Many business leaders have concluded that China is the best low-cost labor solution. But by focusing solely on the lowest labor cost, companies often fail to take into account larger business issues that prevent them from quickly responding to changes in the market - customer needs, competitor moves or even business strategy.
The right approach shouldn't focus on the lowest cost, but rather the lowest "total landed costs." This is a significant paradigm shift in designing a supply chain that is responsive and flexible, focused on quality while achieving the right cost balance.
In his keynote presentation at IW's SMART/mfg conference to be held June 14-16, in Las Vegas, Cannon will address how companies can optimize their supply chains.
