CIVETS, PIGS and BRICs, Oh My

Navigating the economic waters of the past few years reminds some of us that cloaked in every old setback, there is newness - new opportunities to be had, new solutions to be uncovered, news ways of cutting old cost - and in a global economy, a new vocabulary to learn.

We all became very familiar with the BRIC countries (Brazil, Russia, India, China), which with the exception of Russia per EITO in March of last year, were hit less severely by the global economic and financial crisis. Because these countries post strong growth, especially in some industry specific areas like IT and Telecom, Emerging markets have been poised to not only drive recovery in down times, but also lead global growth generation in the future. These markets are also receiving global focus for logistics infrastructure improvements - which is especially important in a country like India where logistics and transport challenges go beyond the terrain.

The Economist drew a picture of two different types of growth occurring in China, largely state directed, and India, driven by private enterprise, in “How India’s Growth Will Outpace China’s”; and both countries require logistics and service development to continue growth trends.

In a global economy, inventive solutions are required to support markets that may not be emerging so much as Different, which have their own complexities - in 2008, questions regarding development of the STANS (Uzbekistan, Turkmenistan, Kyreyzstan & Tajikstan) shed light on opportunities and challenges in an interconnected world.

But the pace of growth in East vs. West is quickly putting more acronyms on Webster’s map, as examples of predicted expansion for emerging nations other than the BRICs are made for the decade ahead. The CIVETS (Columbia, Indonesia, Vietnam, Egypt, Turkey and South Africa), so called after the cats found in many of these countries, may not have the scale or influence of the BRICs according to Stephen Green at HSBC in “The Re-emerging World and the Shift from West to East”, but they have fairly diverse economies and are reasonably stable politically. Unfortunately by contrast, nicknames for suffering economies singled out for the potential impact their post-recession deficits could have on the rest of the Eurozone, led to the coining of the PIGS (Portugal, Ireland, Greece and Spain).

Consensus remains however, that though these markets pose complexity, the opportunity warrants logistics solutions, and the vocabulary is worth learning. Toby Gooley outlined such challenges in “The rocky road to Rio: What shippers need to know about doing business in Brazil” - Why? Because focus on and growth in Brazil followed by Latin America is stronger and only increasing. Consequently, the role of 3PL specialists with regional focus becomes more of an asset than ever to companies requiring aftersales support in these complex markets.

So rest assured, learning your vocabulary as you follow the yellow BRIC road is time well spent and a requirement for partners, providers, suppliers, vendors and team. Happy New Year. http://www.flashlogistics.com/brazil/

Contributed by: Amy Minarik, Director Marketing & Public Relations, Flash Global Logistics

Power in Personal Meetings: Introductions Drive Success in a Remote World

Conducting business in 2010 is a very different environment than it was ten years ago. Relationship building is accomplished in new ways, highlighting the differences between Gen X, Y and A-Z. Add to this business generational gap the means of communicating via skype and IM, telecommuting and remote employment, supporting Green initiatives and cost containment, and you have the perfect blend of opportunity or confusion in the new landscape of finding a fit to win business relationship.

While the days of closing a deal on a napkin are gone and transactions are completed via electronic signature without even a handshake, there is still a lot to be said for rolling up your sleeves during a whiteboard session and being in the same room to brainstorm over a technical requirements document. How about remote teambuilding? Virtual emoticons vs. a laugh over an old fashioned ropes course...

Globalization, made even more possible by remote business, introduces additional wonder into what's behind the curtain. Companies that are making signficant investment in regional market opportunities across the world require and deserve a see-for-yourself approach to service, product, value and the personnel with whom they will engage. Knowing your people across the world goes a long way when the next video conference must be scheduled.

While the travel budget may take a hit, facilitating site visits, tours and face to face opportunities across country borders is adopted by companies that need to vet capabilities and experience for their corporate team, and by suppliers who enthusiastically showcase their capabilities and infrastructure as a fit to win.

From April 12-16th, Flash Global Logistics' CEO Jim van Leenen and SVP Global Business Development John Miller will be in Brazil, escorting clients and potential clients through its São Paulo facility with Director Latin America, Walter Santiago. Conveniently, the Reverse Logistics Association conference is taking place from April 14-15th, where the team will also be joining panels and educating attendees about logistics opportunity and potential challenges to entering or doing business within the Brazil and Latin American market. There is no greater opportunity to determine win win business potential than to experience, meet, touch and see for yourself.

Worldwide Business Research draws our attention to the Wall Street Journal article by Joe Mullich, highlighting the New Face of Face-to-Face Meetings - Efficiencies, Technology, and Better Metrics Bring Greater ROI. Creating a forum for decision makers to explore business opportunities and gauge cultural fit with potential partners is an opportunity to deep dive in person past what might be unrecognized in the e-world.

Should you be interested in the RLA Brazil conference in April, Flash Global Logistics' discount code is BX35271070.

Should you plan to be in San Diego in June for 2010 Interlog Summer, Flash Global Logistics' discount code is 10866.004XZ951.

Let's Face It - decision makers have enough on their plate without having to weed through the web weaved in the e-world. If providers can help companies cut to the chase and get to the root of information necessary, make sure no stones are left unturned in the quest for tools, team and technology, and make the most of their time in a personal meeting, isn't it worth the upfront travel investment to save future cost? There is power in personal meetings; a new introduction could be the key to driving your future success.

New Face of Face-to-Face Meetings - Efficiencies, Technology, and Better Metrics Bring Greater ROI

Contributed by: Amy Minarik, Director Marketing & Public Relations, Flash Global Logistics

Cost Cutting vs Cost Savings

We are all faced with the challenge of meeting the pricing pressures of our clients in this economy. Contracts? Is there such a thing when it comes to pricing? In this economy it is all about showing me the money and giving me the absolute best value. There are those companies that view reductions on the rates that exist as a win and others that can look deeper into the process and see that the impact of services can truly drive cost savings throughout the organization. I have been designing and presenting models for high tech service parts supply chains for over 17 years and I can tell you from experience that the savings comes from scalable solutions that impact internal operations and improve working capital. Let me be clear; there is a cost that comes with outsourcing services, but that cost has to be measured against the positive impact on all operational areas (Engineering productivity, customer satisfaction, inventory investment and planning) in order to see the true value of the solution and not just the price. There is much more to come on this topic in my next posting...

Thanks for reading....

John T Miller
SVP Global Business Development

What Progressive Service Parts Organizations Look For

In my previous posting on service parts logistics planning and execution, I finished with the notion that when service organizations plan for field stocking locations (getting parts close to customers so they can be delivered in minutes or hours), what they should focus on is intelligence in selecting where to put Forward Stocking Locations, what to put there, and what to look for when selecting a service provider to manage them.

My good buddies at MCA Solutions and Click Commerce have expressed interest in where I was going with my blog postings, particularly since I’ve focused on both the planning as well as the execution of service parts logistics. The folks at Servigistics are pretty interested as well. These companies plus Baxter Planning Systems all focus on the “what to put there” topic and to a degree the “where to put Forward Stocking Locations”. Check out their web sites and blogs for more detail on those topics. I’ve worked side by side with and know many people working now at these four companies and each offer superior products and services to the service parts professionals and organizations.

What I’ll do is focus on some of the “where to put Forward Stocking Locations (FSL’s)” and “what to look for when selecting a service provider to manage them” topics. The natural for me to focus on is what to look for when selecting a service provider to manage FSL’s, so I’ll start there first. In the last few months I’ve traveled around the US and to Europe and here’s what I hear progressive service parts logistics organizations looking for:

• Working with a partner who has a long established laser focus on service parts and critical item logistics. One that has a majority of their revenue generated from this line of business, and resources (people on board) with experience in this unique space. The people I’ve spoken with are looking for a partner who brings fresh creative perspectives and ideas to the table for evaluation and incorporation into a solution capable of providing the extreme customer service I speak of.
• Global coverage of a partner’s current network and capability to expand to countries in Frontier Markets (a term coined by BusinessWeek,,, I think,,, to describe markets that are developmentally even less mature than the typical Emerging Market countries).
• A partner with resources located in regions such as Europe, Latin America, Asia Pacific and North and Central America; the “boots on the ground” available local business hours with local language regularly spoken (not available by request). Was it John Chambers from Cisco who for many years preached plan globally but manage locally? In our business, the value of local presence and knowledge of cultural and geographical uniqueness is immeasurable.
• The ability of a partner to support complex customer unique business processes from both an Operations and Information Technology standpoint. Each of the companies I spent time with recently has expressed the fact that they have unique requirements based on their end customer’s requirements of them. Remember my posting on Extreme Customer Service? The best partner has what I think are the three most critical components; the right people, process, and technology. All three are needed - always.
• Did I use the word “partner” enough? This is a key point. The people I’ve spoken with are looking for a partnership, not a supplier / vendor relationship. Since the goal is to provide extreme customer service to the end customer, each party in the partnership must have a deep understanding of the other’s business environment and both must have congruent goals. Only when this occurs can the partnership thrive and the needs of each partner be served.
  

Those are my top 5. I’ll drill into each in subsequent postings, and also touch on determining the exact location of Forward Stocking Locations. Thanks for listening….. John Wild

Planning, execution, both?

So, to deliver on the promise of Extreme Customer Service we probably all understand the need for good planning and also good execution (see the Logistically Speaking post of March 1st at http://flashlogistics.blogspot.com/). So what does that really mean? Let’s think about planning; is it an art, a science, or a little bit of both? My vote is that it is a little bit of both. I’ve seen it; lived and breathed it too.

I experienced the planning piece while working as an Inventory Planner and strategy analyst at a Fortune 100 office products company and then while working for the company that is now Click Commerce designing key components of the original version of their software and implementing it for their customers around the globe. The execution piece while working in the service parts logistics organizations at two large global companies, and most recently for third party logistics providers, now of course here at Flash Global Logistics.

Plan as we may, even when using some of the top notch planning and optimization tools on the market today, to the Service professional, when the rubber meets the road, technicians or customers need parts and they usually need them FAST. Gone are the days when a technician can break a service call for lack of a part and tell a customer they’ll be back in the morning to get the machine working again. That’s almost like saying “the check is in the mail”. And remember, when it’s time to renew an equipment lease or sign a new service contract, it’s the broken calls that customers remember – even more than the fact that the equipment needed service in the first place. Years ago I remember reading research that concluded that customers who received good service were actually more satisfied than customers who’s equipment never needed service at all, imagine that!

So, many companies with same day service agreements (like 2 hours, 4 hours, etc.) have taken the approach of positioning service parts within arm’s reach of their technicians at Forward Stocking Locations using service providers who can deliver them to customers in minutes / hours. Today, technicians can’t tell customers that they’ll be back tomorrow and have the machine up and running again after they finish their morning latte. That doesn’t sound right as I write it, and certainly doesn’t sound right at the customer site when their device is not working. OK, nobody ever says that to a customer, but what you say and what your customers hear are usually two different things; right? Remember, we’re talking about the promise of extreme customer service here….

To the service provider what is important are things like potentially not meeting service level agreements for lack of parts, technicians spending time to hook up with their buddies who may have the part they need, or a host of other non productive activities that could potentially happen and yet the service level agreement is not met anyway. What’s needed is intelligence in selecting where to put Forward Stocking Locations, what to put there and what to look for when picking a service provider to manage them. More on that in the next posting.

John Wild

Extreme Customer Service?

Extreme Customer Service. That title on a recent BusinessWeek cover really got my attention (so to did the guy bending over backwards with an Amazon box in his hands... a guy far less follically challenged than Amazon CEO Jeff Bezos who is usually pictured in articles like this). And what I also found most interesting is that the various articles had comments like “when service means survival” or “keeping customers happy is more critical than ever” or “service champs economize on everything but TLC”. I thought: good, that all makes sense. Then there was the list of top customer service champs – all consumer facing companies from Amazon to Zappos.

OK, I get it, good. But I wondered why there were no manufacturers or aftermarket services firms on the list and that the bulk of the material focused on consumer facing organizations. What was missing was the Business to Business sector in which extreme customer service is so important now. Manufacturers and independent service providers have a heightened level of awareness of the need to provide extreme customer service in the current economic downturn. Maintaining current customers is critically important. The impact of the old adage that goes something like... it’s far less costly to keep existing customers than it is to get new ones... has been amplified by huge orders of magnitude in the last 12 months or so.

The end business customers (those that rely on the equipment they’ve purchased or leased to remain performing or to be service ready) are a fickle bunch. They’re paying for performance (up time) and expect it. Let them down, and they’ll start looking elsewhere for products that perform better or that are serviced better. So this challenge hits right at home in the field service and service parts logistics environment. Here our laser focus has to be on availability of technicians to provide service when needed and the service parts they require with them or within arm’s reach. In my experience, that requires two things; planning and execution. Planning as in making sure there are enough of the right parts in the right place, and execution as in making sure that those parts can be delivered from distribution centers or forward stocking locations to the point of use in time to meet the level of service commitments that have been made to the end customers. Oh, by the way, manufacturers and service providers are generally ‘for profit’ organizations (or at least they are not ‘not for profit’ organizations) so this extreme customer service has to be provided in a financially responsible way.

What I’ll be writing about in this blog are the challenges faced in this B2B extreme customer service environment and the creative ways that a laser focus on service parts logistics enables it... hey, I’m a service parts guy…John Wild