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Bug or Windshield?

Tue, 12/29/2009 - 11:58am
Alan Amling, Global Logistics and Distribution Marketing, UPS Supply Chain Solutions, www.ups.com

AlanAmling

As I write this blog in early December the Dow is reaching 14 month highs, indicating a belief that the worst is behind us.  While many believe there will be more bumps in the road and the unemployment picture hasn’t improved much, the tide is changing. Thoughts are shifting from conservation of resources to the best deployment of resources to generate growth as consumer demand improves.  Whether you’re in the high tech industry or serve the high tech industry, the challenge is how to stay one step ahead of your competition to capture the growth in an improving economy.  To do this, it’s more than understanding your customer’s needs today; it’s anticipating what they’ll need tomorrow. The tea leaves showing key trends are all around us in blogs, news articles, business and financial analyst reviews and more.  In this three part  blog post, I’ll touch on three trends; Sustainability, Demand-side Asia and Consumer Empowerment.

Trend 1, Sustainability
The U.S. has been behind the eight ball relative to the EU in putting in place environmental legislation.  However, this is a top priority of the Obama administration and you can be sure we’ll be raising our game at the Copenhagen Climate Change Conference this month.  It’s time to get serious and take stock of your environmental position.  Do you know your carbon footprint?   Do you know the environmental position of your suppliers, partners and most importantly, customers?  At UPS we’re seeing more and more bids come in requesting not only information on our environmental record, but how we can help our customers lower their carbon footprint.  If you want to understand how attitudes will change in the U.S. over the next few years, look to Europe.  Lastly, as environmental guidelines and regulations are established you need to be an active participant in the process.  If your competitor is active and your not, the alarm bells should be ringing.  This is a classic case of “frame or be framed.”

Trend 2, Bug or Windshield?
Demand-side Asia
For the last two decades Asia has become not only a major supplier of goods, but also services.  All of this economic activity has driven a steady increase in the middle class purchasing power of countries like China and India.  According to World Bank research, developing countries were home to 56% of the global middle class in 2000, but by 2030 that figure is expected to reach 93%.  China and India alone will account for two-thirds of the expansion.  Are you set up to capitalize on this trend?  You may have mastered the Asia to the US/EU supply chain challenges, but what about Dalian to Delhi?   As a businessperson, you want to find the fast moving train.  Average performers on a fast moving train will always make out better than great performers on a slow moving train.  The middle class consumer in Asia is that fast moving train.   Time to hop aboard.

Trend 3 Bug or Windshield?
Consumer Empowerment
Global consumers have access to the greatest source of power since the dawn of time…information.   The explosion of internet connected devices provides more access to more information than ever before…and the trend will continue.  “Google” has become a verb and social networks disseminate facts and opinion like wildfire.  How do you harness the good from this information explosion and control the bad.  One change UPS has made over the last year is to be a participant in conversations that are happening on sites like Twitter.  By recognizing an issue and responding directly to the user in a timely fashion, we can materially change the customer experience.  Global online and Mobile commerce is also benefitting from this information explosion.  If I can get all the information I need to make a purchase while I’m waiting for my daughter’s lacrosse practice to end, why put off my purchase and travel to a store?  You can envision a day when stores essentially become showrooms.  There are already sites popping up like Alice.com that allow you to purchase household goods directly from the manufacturer.  The well informed consumer will continue to raise the bar and challenge the status quo, turning the supply chain into a demand chain.   Are you ready?

Bottom line, change happens.  Will you stay in front of the changing market, or become a victim of it...will you be the bug or the windshield?

 

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