Vivek Sood's Blog, page 47
March 18, 2015
Doing collaboration: The right way to improve your Supply Chain – Vivek SOOD – Global Supply Chain Group
Doing collaboration: The right way to improve your Supply Chain
Supply Chain Management (SCM) is an essential element of operational efficiency. SCM is critical to business operations, therefore it is clearly important for a company to know, understand and master the supply chain.
Supply chain’s evolution can be break down into three generations. That is an easy way for companies to understand how to be more efficient and maximize the benefits of a good supply chain. The three generations of supply chain go from supply chain 0.0 to supply chain 1.0, then to supply chain 2.0 and eventually reach supply chain 3.0.
Now, an important question should cross your mind: What are the differences between supply chain 0.0, 1.0, 2.0 and 3.0?
Supply chain evolution is quite logical. The generation 0.0 represents the absence of supply chain. Business act is then individualistic, each group is on its side working without or with very weak cross-functional communication and relationship. A company which is intending to be a well-established player in its field cannot stay at this stage.
The first main change brought by supply chain 1.0 is communication. Communication channels at horizontal level between different departments are created which is break down the silos. In order to be more efficient, people talk with each other across the departmental line and planning and scheduling become a team work. An ERP System is put into place to formalize communication.
But such a supply chain can become a little bit inflexible. If a company wants to overcome this difficulty, it has to expand its circle of collaborators. All the groups of the company have to take part in brainstorming and collaborate for the creation of a more structured planning environment. That is the aim of supply chain 2.0: Helping the finance to work together with operations and sales in order to establish a coherent set of integrated business plans to shape one single business outlook that can be agreed on and actionable by everybody.
The next step is to go beyond this to an attractiveflexible and structured plan. How can wedo it? It is time for the company to reach the supply chain 3.0 and stop taking its positions for granted.
The solution is called the flywheel of supply chain 3.0: create collaboration with suppliers and customers in order to create products at lower cost and higher degree of matching with consumers’ expectations.
The post Doing collaboration: The right way to improve your Supply Chain – Vivek SOOD – Global Supply Chain Group appeared first on Global Supply Chain Group | Management And Strategy Consultants.
March 17, 2015
Interview Transcript: 5-STAR Network for Profitable Business Transformation
Interviewer: Ric Bratton of This Week In America
Interviewee: Vivek Sood of Global Supply Chain Group (author of The 5-STAR Business Networks)
Here is the entire transcript of the interview:
Ric Bratton: Welcome back everybody! This Week In America, thank you for joining us! Our website is . As promised, coming up in a program an interview with the man who has the world’s most interesting job. He once was a ship captain like Captain Phillips, had a real-life fight with pirates at sea and now he helps CEOs and their companies with business transformation to boost profits and do it rapidly. He has more than 400 projects, they’ve spent approximately 84 countries and 5 continents with clients ranging from Fortune-500 companies to innovative green-technology companies. And he says he has more fun every day at work than he could ever imagine. Vivek Sood – our guest back on the program, representing “The 5‑Star Business Network” – that’s his book. Vivek, welcome to the program, it’s great to have you with us!
Vivek Sood: Thank you, Ric! It’s a pleasure every time to talk to you.
Ric Bratton: Oh, it is! Are you still having fun every day?
Vivek Sood: Oh, yes! The fun never stops, this is a beautiful job. Like I said last time, doctors save lives and we save livelihoods.
Ric Bratton: That is so true. When you go in and you are able to offer a lifeline to some of these companies, it really has to mean so much to them. Vivek’s website is www.5starbusinessnetwork.com. The book is called “The 5‑Star Business Network”. Information, of course, is on our website . Let’s start off by talking about something very important, we touched it last time. You said that the world economy is changing forever. It should get people’s attention, that is now changing forever. Talk about that. Why all of a sudden we are seeing this shift?
Vivek Sood: Ric, there are many factors. I guess the biggest factor really is Internet or connectivity. Global connectivity has made services and knowledge available to people, that was never available before. In a way, basically, you cannot trade on information asymmetry or, in other words, the arbitrage opportunity. The ability to fool somebody, because you have more information than them, does not exist anymore. That is probably one of the biggest shifts that has happened on a global level. Along with that, of course, China and India, two very big nations, each one of them is 1.3 billion people or so, they are now finally joining up the global economy after about 150-200 years of being in hiatus. Such a massive shift is definitely going to cause an upheaval in the global economy, there are no two ways about it.
Ric Bratton: I mentioned that you’ve worked in a number of countries, I think you visited and traveled to 150, you have clients in 80-85 countries. And looking at what we are in the United States, Vivek is coming to us from Australia as we are doing this. As for the Unites States and out companies, are we positioned in a good shape or are we playing catch-up with this?
Vivek Sood: Ric, the best US companies are still the best in the world, there is no doubt about that. You look at companies like Amazon or Apple, they are definitely some of the best companies on earth. But there is also another hard fact, that US being a very large country of nearly 300 million people, as well as a very rich country, has never had to look outside its shores for business. Small to mid-sized enterprise, even a large enterprise really looks outside US almost as an addendum to its core business. So US is seen as the core business and the rest of the world are seen almost like incidental business. That is probably one of the biggest problems that a shift to globalization hasn’t happened in the minds of many large companies, let alone small or mid-sized companies.
Ric Bratton: Our guest on This Week in America is Vivek Sood. His website is www.5starbusinessnetwork.com and his book is called “The 5‑Star Business Network”. World’s foremost authority in global supply chains. And let’s talk about that. Exactly what are we talking about when we are talking about global supply chains?
Vivek Sood: OK, global supply chains are very easy. You look at an iPhone, iPhone 6, for example, which has just been released by Apply. Obviously, one of the biggest markets for their product is the United States of America, but when you look at the product itself, well, it is designed in California. The parts come from all over the world, there are companies in Taiwan, in China, in Malaysia and many other locations, which are manufacturing parts, which finally are assembled in a place in China. And that’s how this product is being made, and then it is being sold all over the world. Now that is a massive shift from how computers were manufactured when Apple first started manufacturing the computers in California. So that’s what I mean by globalization of supply chains.
Ric Bratton: How are businesses responding to the shift? Are most of them on top of this?
Vivek Sood: Some are, definitely, like Apple, the example I just gave you. They are totally on top of it. They are not only using global enterprises to manufacture, they are also using the global enterprises to design, in fact, even understand the consumer preferences around the world and create products that are acceptable to consumers around the world. Others are still thinking of it in a very narrow way, where people inside the company are telling the CEOs. I can even give you an example of a Korean company, which is one of the biggest competitors to Apple, they are still thinking in a very narrow way. They want to do everything in house, perhaps just within a small national boundary. And the more they are trying to do that, the more they fall behind their competitors.
Ric Bratton: Vivek Sood is our guest on the program on This Week in America. We are talking about his book “The 5‑Star Business Network”. Business-to-business network, something that we talked about on the last program, you talked about in the book and something you stress as being really important. Explain exactly, how that is. It sounds very simple, and some businesses go “yeah, I’ll get a Facebook page and I’m part of this new wave, this new phenomenon”. Talk about business-to-business networking and how it’s done right.
Vivek Sood: OK, so what people think of LinkedIn or Facebook as very large networks, which they are and they are very useful as well. But when you look at business-to-business networks, the scale is absolutely staggering, it’s mind-boggling. Facebook is about, let’s say, a hundred billion dollars. But when you look at just one industry – let’s say, automobile industry, the global supply chain of automobile industry runs into trillions of dollars. So all the ancillary unit providers, which are based in Far East, for example, combine that with all the assemblers and designers, and suddenly you have a global supply chain, which is worth trillions of dollars and works like a clockwork to put the next model of automobile out in the market place. This is just one example, you can think of chemicals industry, you can think about pharmaceutical industries, you can think about retail industry, – each one of them has a very diverse, a very widespread, very tightly neat global business-to-business network, a global supply chain, where the enterprises are working together with each other to put the final product in the hands of the consumer.
Ric Bratton: You’ve said that most miss the network that is hidden in plain sight. When you think about it, it’s sometimes too obvious, you are trying to make it more complicated than what it is.
Vivek Sood: I’m actually trying to make it simpler than what it is, Ric. In the end, they are actually very complicated networks. Think about it this way: today, if you wear a leather jacket, the cow comes from somewhere, the leather is tanned somewhere else, after that it is cut in another place, perhaps 2 thousand miles away from there. Then it is stitched into a jacket in another place, and finally it is packaged and sold in totally different place. It is far more complicated than most people actually think. And management of that global scale as well as scope of business-to-business network, and actually extract profits out of it, it is an art and it is a science, it doesn’t happen just by coincidence.
Ric Bratton: Vivek Sood, our guest on the program. His book is called “The 5‑Star Business Network”, his website is www.5starbusinessnetwork.com. Of course, this information is available on our website and you can link on directly to Vivek’s website and get information. Why do so many companies seem to get it wrong and struggle?
Vivek Sood: Ric, look at what is happening inside the companies. If you look at the senior executives or CEOs, they have come through the ranks in pyramid structure and they are used to work in a particular way. They face very intense pressure, by the way from their investors, from the Wall Street, who want the profits, who want to take advantage of the shift in the global business scenario. However, when they go internally to talk to their own teams, the internal teams basically have done business in only one way in the past, and that is the only way the know of doing business. So what they see around them, if you are a C-level executive, you see a massive waste around you, you see a massive loss of opportunity. And you just don’t know how to wrap your arm around it, and how to actually squeeze the waste out of the system, and how to actually get rid of the confusion and complexity. That is perhaps their biggest blocker, in my mind.
Ric Bratton: When you go in and you deal with companies, – and I mentioned at the beginning that you deal with companies of all sizes, all around the world, – when you go in and start laying out your ideas, and again, you mentioned that sometimes the corporate culture is very slow to respond, what kind of response do you get when you go in and you say: “OK, here’s what I think you should be going, here are the changes that really need to be made to be competitive on a market place today”? What kind of response do you get?
Vivek Sood: Ric, the most important thing we do for our clients is basically get rid of the complexity. So what we do is very clearly, we lay out the supply chain in a very systematic manner as it exists right now, and then we look at several different models of supply chain within their industry, but also outside the industry and we have now a track record of 50 years of doing this in our company for a variety of industries. We have these models in our mind, but we also work with the internal teams to create this permutations and combinations. And finally we choose the best model that works for this particular company. In each case, inevitably we end up saving humongous amount of money for the C-level executives and their companies.
Ric Bratton: You know, what’s interesting is, so often you hear of companies and when they decide to go through a transformation, it’s downsizing, it’s reducing force, it’s redundancies, things like that. Can you downsize your way to success?
Vivek Sood: Never, very rarely. In fact, in my view, if you have come to a point where you have to go through mass redundancies and just last week a very large IT company had to declare mass redundancies again, in my view, it’s already too late. Somebody has missed the obvious writing on the wall, the massive waste within the company was overlooked for long enough, so that the situation has come to a point where the knee-jerk reaction is that the Wall Street or the investors want results. And what’s the quickest way to get results? Let’s do downsizing. But that’s a very temporary solution. In the end, that will end in eroding the core competency of the business itself.
Ric Bratton: We talked about the companies, which are getting it wrong and struggling. Let’s talk about some of the companies, that you could say they are doing it right, and how they are doing it, because they are thriving and they are positioned to take advantage of this global economy.
Vivek Sood: Oh yes, there are lots and lots of companies that are doing it, and I continue to have this conversation with companies and work with them. Yesterday I had a very interesting conversation with three different companies, each one of them is a massive company, and each one of them is actually on the path upwards! Yes, many of them are sort of trying to stumble their way into that kind of new paradigm with new supply chains, but many others have become very systematic about it. How to take a supply chain, from supply chain 0.0 to supply chain 1.0, to supply chain 2.0 and then further on to supply chain 3.0. Now these are all a little bit technical terms, I understand that, but there is a massive difference between these. It’s almost like three different models of an aircraft.
Ric Bratton: Interesting! Vivek Sood, our guest on the program, his book is called “The 5‑Star Business Network”, it’s available on Amazon, all across the country, all the places where books are sold, and at his website, which is www.5starbusinessnetwork.com. Information available, of course, at our website. Vivek is a supply chain corporate strategist, managing director of the Global Supply Chain Group. A couple of minutes left of the program, let’s talk about some of the benefits of business-to-business networks. We’ve talked about the role it’s going to play in this transformation, it’s a network that’s there for you. Let’s talk about some of the benefits, tangible benefits that businesses will see, trying to engage their business-to-business network.
Vivek Sood: Absolutely. So, Ric, first thing is of course, as you cut out the complexity, you create much better understanding of the very complex business-to-business networks and supply chains in the business. With this understanding comes the ability to manage, the ability to control, ability to actually have much more influence that you ever had before. That’s probably the first benefit. Once you have an influence, you can actually start moving the ship in the right direction. I used to work in a ship, so imagine, if every time you turn the radar, you don’t know which way the ship is going to turn, just because you don’t have the control. Once you have that kind of control, you can actually start taking ship in the right direction. And, of course, with that comes higher profitability, much happier customers, for example, because your service levels are much better. More innovation, creating better products faster, working with your suppliers and suppliers’ suppliers, as well as working with your customers to create products that the consumers actually want, to get higher margins on those products, to actually customize the supply chain in a highly segmented manner, where each supply chain is structured for a particular customer segment and getting the maximum profitability out of the segment, because now they’re much happier with what they’re getting than they were ever in the past. I see this on a daily basis, by the way.
Ric Bratton: Yeah, and this is not theory that you’re dealing with, you had over 400 business transformation projects and the success rate of 100%. So you are actually able to take this into the market place and literally turn businesses around. I’m sure, keep some businesses fluid and allowing them to hire people, to keep the business going.
Vivek Sood: Absolutely, that’s what gets us out of bed every morning. It’s like a doctor who is very happy about saving lives as we’re saving livelihoods! In the end, having that kind of impact on businesses and creating much more effective as well as efficient businesses is rewarding itself.
Ric Bratton: Well, it’s a pleasure to have you back on the program. Vivek Sood, the book is called “The 5‑Star Business Network”, his website is www.5starbusinessnetwork.com. Information, of course, at our website . The book’s available at Amazon, all across the country and you can order the book by going to the website www.5starbusinessnetwork.com. Vivek, it is always a pleasure! Thank you so much for joining us, look forward to having you back on the program. Thank you and keep smiling!
Vivek Sood: Thank you, Ric! Very nice to talk to you again! And have a very good day!
Ric Bratton: Thank you! I love the passion for what you are doing, it’s a pleasure to have you on the program!
Get the Book Now
The post Interview Transcript: 5-STAR Network for Profitable Business Transformation appeared first on Global Supply Chain Group | Management And Strategy Consultants.
This Week In America Interviews Vivek Sood on 5-STAR Business Network
Interviewer: Ric Bratton of This Week In America
Interviewee: Vivek Sood of Global Supply Chain Group
(author of The 5-STAR Business Networks)
Here is a video of the interview:
Get the Book Now
Here is the entire transcript of the interview:
Ric Bratton: Welcome back everybody! This Week In America, thank you for joining us! Our website is . As promised, coming up in a program an interview with the man who has the world’s most interesting job. He once was a ship captain like Captain Phillips, had a real-life fight with pirates at sea and now he helps CEOs and their companies with business transformation to boost profits and do it rapidly. He has more than 400 projects, they’ve spent approximately 84 countries and 5 continents with clients ranging from Fortune-500 companies to innovative green-technology companies. And he says he has more fun every day at work than he could ever imagine. Vivek Sood – our guest back on the program, representing “The 5‑Star Business Network” – that’s his book. Vivek, welcome to the program, it’s great to have you with us!
Vivek Sood: Thank you, Ric! It’s a pleasure every time to talk to you.
Ric Bratton: Oh, it is! Are you still having fun every day?
Vivek Sood: Oh, yes! The fun never stops, this is a beautiful job. Like I said last time, doctors save lives and we save livelihoods.
Ric Bratton: That is so true. When you go in and you are able to offer a lifeline to some of these companies, it really has to mean so much to them. Vivek’s website is www.5starbusinessnetwork.com. The book is called “The 5‑Star Business Network”. Information, of course, is on our website . Let’s start off by talking about something very important, we touched it last time. You said that the world economy is changing forever. It should get people’s attention, that is now changing forever. Talk about that. Why all of a sudden we are seeing this shift?
Vivek Sood: Ric, there are many factors. I guess the biggest factor really is Internet or connectivity. Global connectivity has made services and knowledge available to people, that was never available before. In a way, basically, you cannot trade on information asymmetry or, in other words, the arbitrage opportunity. The ability to fool somebody, because you have more information than them, does not exist anymore. That is probably one of the biggest shifts that has happened on a global level. Along with that, of course, China and India, two very big nations, each one of them is 1.3 billion people or so, they are now finally joining up the global economy after about 150-200 years of being in hiatus. Such a massive shift is definitely going to cause an upheaval in the global economy, there are no two ways about it.
Ric Bratton: I mentioned that you’ve worked in a number of countries, I think you visited and traveled to 150, you have clients in 80-85 countries. And looking at what we are in the United States, Vivek is coming to us from Australia as we are doing this. As for the Unites States and out companies, are we positioned in a good shape or are we playing catch-up with this?
Vivek Sood: Ric, the best US companies are still the best in the world, there is no doubt about that. You look at companies like Amazon or Apple, they are definitely some of the best companies on earth. But there is also another hard fact, that US being a very large country of nearly 300 million people, as well as a very rich country, has never had to look outside its shores for business. Small to mid-sized enterprise, even a large enterprise really looks outside US almost as an addendum to its core business. So US is seen as the core business and the rest of the world are seen almost like incidental business. That is probably one of the biggest problems that a shift to globalization hasn’t happened in the minds of many large companies, let alone small or mid-sized companies.
Ric Bratton: Our guest on This Week in America is Vivek Sood. His website is www.5starbusinessnetwork.com and his book is called “The 5‑Star Business Network”. World’s foremost authority in global supply chains. And let’s talk about that. Exactly what are we talking about when we are talking about global supply chains?
Vivek Sood: OK, global supply chains are very easy. You look at an iPhone, iPhone 6, for example, which has just been released by Apply. Obviously, one of the biggest markets for their product is the United States of America, but when you look at the product itself, well, it is designed in California. The parts come from all over the world, there are companies in Taiwan, in China, in Malaysia and many other locations, which are manufacturing parts, which finally are assembled in a place in China. And that’s how this product is being made, and then it is being sold all over the world. Now that is a massive shift from how computers were manufactured when Apple first started manufacturing the computers in California. So that’s what I mean by globalization of supply chains.
Ric Bratton: How are businesses responding to the shift? Are most of them on top of this?
Vivek Sood: Some are, definitely, like Apple, the example I just gave you. They are totally on top of it. They are not only using global enterprises to manufacture, they are also using the global enterprises to design, in fact, even understand the consumer preferences around the world and create products that are acceptable to consumers around the world. Others are still thinking of it in a very narrow way, where people inside the company are telling the CEOs. I can even give you an example of a Korean company, which is one of the biggest competitors to Apple, they are still thinking in a very narrow way. They want to do everything in house, perhaps just within a small national boundary. And the more they are trying to do that, the more they fall behind their competitors.
Ric Bratton: Vivek Sood is our guest on the program on This Week in America. We are talking about his book “The 5‑Star Business Network”. Business-to-business network, something that we talked about on the last program, you talked about in the book and something you stress as being really important. Explain exactly, how that is. It sounds very simple, and some businesses go “yeah, I’ll get a Facebook page and I’m part of this new wave, this new phenomenon”. Talk about business-to-business networking and how it’s done right.
Vivek Sood: OK, so what people think of LinkedIn or Facebook as very large networks, which they are and they are very useful as well. But when you look at business-to-business networks, the scale is absolutely staggering, it’s mind-boggling. Facebook is about, let’s say, a hundred billion dollars. But when you look at just one industry – let’s say, automobile industry, the global supply chain of automobile industry runs into trillions of dollars. So all the ancillary unit providers, which are based in Far East, for example, combine that with all the assemblers and designers, and suddenly you have a global supply chain, which is worth trillions of dollars and works like a clockwork to put the next model of automobile out in the market place. This is just one example, you can think of chemicals industry, you can think about pharmaceutical industries, you can think about retail industry, – each one of them has a very diverse, a very widespread, very tightly neat global business-to-business network, a global supply chain, where the enterprises are working together with each other to put the final product in the hands of the consumer.
Ric Bratton: You’ve said that most miss the network that is hidden in plain sight. When you think about it, it’s sometimes too obvious, you are trying to make it more complicated than what it is.
Vivek Sood: I’m actually trying to make it simpler than what it is, Ric. In the end, they are actually very complicated networks. Think about it this way: today, if you wear a leather jacket, the cow comes from somewhere, the leather is tanned somewhere else, after that it is cut in another place, perhaps 2 thousand miles away from there. Then it is stitched into a jacket in another place, and finally it is packaged and sold in totally different place. It is far more complicated than most people actually think. And management of that global scale as well as scope of business-to-business network, and actually extract profits out of it, it is an art and it is a science, it doesn’t happen just by coincidence.
Ric Bratton: Vivek Sood, our guest on the program. His book is called “The 5‑Star Business Network”, his website is www.5starbusinessnetwork.com. Of course, this information is available on our website and you can link on directly to Vivek’s website and get information. Why do so many companies seem to get it wrong and struggle?
Vivek Sood: Ric, look at what is happening inside the companies. If you look at the senior executives or CEOs, they have come through the ranks in pyramid structure and they are used to work in a particular way. They face very intense pressure, by the way from their investors, from the Wall Street, who want the profits, who want to take advantage of the shift in the global business scenario. However, when they go internally to talk to their own teams, the internal teams basically have done business in only one way in the past, and that is the only way the know of doing business. So what they see around them, if you are a C-level executive, you see a massive waste around you, you see a massive loss of opportunity. And you just don’t know how to wrap your arm around it, and how to actually squeeze the waste out of the system, and how to actually get rid of the confusion and complexity. That is perhaps their biggest blocker, in my mind.
Ric Bratton: When you go in and you deal with companies, – and I mentioned at the beginning that you deal with companies of all sizes, all around the world, – when you go in and start laying out your ideas, and again, you mentioned that sometimes the corporate culture is very slow to respond, what kind of response do you get when you go in and you say: “OK, here’s what I think you should be going, here are the changes that really need to be made to be competitive on a market place today”? What kind of response do you get?
Vivek Sood: Ric, the most important thing we do for our clients is basically get rid of the complexity. So what we do is very clearly, we lay out the supply chain in a very systematic manner as it exists right now, and then we look at several different models of supply chain within their industry, but also outside the industry and we have now a track record of 50 years of doing this in our company for a variety of industries. We have these models in our mind, but we also work with the internal teams to create this permutations and combinations. And finally we choose the best model that works for this particular company. In each case, inevitably we end up saving humongous amount of money for the C-level executives and their companies.
Ric Bratton: You know, what’s interesting is, so often you hear of companies and when they decide to go through a transformation, it’s downsizing, it’s reducing force, it’s redundancies, things like that. Can you downsize your way to success?
Vivek Sood: Never, very rarely. In fact, in my view, if you have come to a point where you have to go through mass redundancies and just last week a very large IT company had to declare mass redundancies again, in my view, it’s already too late. Somebody has missed the obvious writing on the wall, the massive waste within the company was overlooked for long enough, so that the situation has come to a point where the knee-jerk reaction is that the Wall Street or the investors want results. And what’s the quickest way to get results? Let’s do downsizing. But that’s a very temporary solution. In the end, that will end in eroding the core competency of the business itself.
Ric Bratton: We talked about the companies, which are getting it wrong and struggling. Let’s talk about some of the companies, that you could say they are doing it right, and how they are doing it, because they are thriving and they are positioned to take advantage of this global economy.
Vivek Sood: Oh yes, there are lots and lots of companies that are doing it, and I continue to have this conversation with companies and work with them. Yesterday I had a very interesting conversation with three different companies, each one of them is a massive company, and each one of them is actually on the path upwards! Yes, many of them are sort of trying to stumble their way into that kind of new paradigm with new supply chains, but many others have become very systematic about it. How to take a supply chain, from supply chain 0.0 to supply chain 1.0, to supply chain 2.0 and then further on to supply chain 3.0. Now these are all a little bit technical terms, I understand that, but there is a massive difference between these. It’s almost like three different models of an aircraft.
Ric Bratton: Interesting! Vivek Sood, our guest on the program, his book is called “The 5‑Star Business Network”, it’s available on Amazon, all across the country, all the places where books are sold, and at his website, which is www.5starbusinessnetwork.com. Information available, of course, at our website. Vivek is a supply chain corporate strategist, managing director of the Global Supply Chain Group. A couple of minutes left of the program, let’s talk about some of the benefits of business-to-business networks. We’ve talked about the role it’s going to play in this transformation, it’s a network that’s there for you. Let’s talk about some of the benefits, tangible benefits that businesses will see, trying to engage their business-to-business network.
Vivek Sood: Absolutely. So, Ric, first thing is of course, as you cut out the complexity, you create much better understanding of the very complex business-to-business networks and supply chains in the business. With this understanding comes the ability to manage, the ability to control, ability to actually have much more influence that you ever had before. That’s probably the first benefit. Once you have an influence, you can actually start moving the ship in the right direction. I used to work in a ship, so imagine, if every time you turn the radar, you don’t know which way the ship is going to turn, just because you don’t have the control. Once you have that kind of control, you can actually start taking ship in the right direction. And, of course, with that comes higher profitability, much happier customers, for example, because your service levels are much better. More innovation, creating better products faster, working with your suppliers and suppliers’ suppliers, as well as working with your customers to create products that the consumers actually want, to get higher margins on those products, to actually customize the supply chain in a highly segmented manner, where each supply chain is structured for a particular customer segment and getting the maximum profitability out of the segment, because now they’re much happier with what they’re getting than they were ever in the past. I see this on a daily basis, by the way.
Ric Bratton: Yeah, and this is not theory that you’re dealing with, you had over 400 business transformation projects and the success rate of 100%. So you are actually able to take this into the market place and literally turn businesses around. I’m sure, keep some businesses fluid and allowing them to hire people, to keep the business going.
Vivek Sood: Absolutely, that’s what gets us out of bed every morning. It’s like a doctor who is very happy about saving lives as we’re saving livelihoods! In the end, having that kind of impact on businesses and creating much more effective as well as efficient businesses is rewarding itself.
Ric Bratton: Well, it’s a pleasure to have you back on the program. Vivek Sood, the book is called “The 5‑Star Business Network”, his website is www.5starbusinessnetwork.com. Information, of course, at our website . The book’s available at Amazon, all across the country and you can order the book by going to the website www.5starbusinessnetwork.com. Vivek, it is always a pleasure! Thank you so much for joining us, look forward to having you back on the program. Thank you and keep smiling!
Vivek Sood: Thank you, Ric! Very nice to talk to you again! And have a very good day!
Ric Bratton: Thank you! I love the passion for what you are doing, it’s a pleasure to have you on the program!
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March 13, 2015
Is Big Data a big lie?
Every few years the IT vendor industry comes up with a new buzz word. Here are a few I have heard in my work as a strategy consultant for the last 15 years:
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A deluge of Biblical proportions – what could happen to businesses with a global ZIRP
Everyone welcomes rain – after all it provides succour to the men and animals, and sustenance to life-giving vegetation. Till there is too much of it – just like in flooding!
All businesses like money too, it provides the resources to buy and use capability – till there is too much of it. Because then it provides no competitive advantage. While a Zero Interest Rate Policy (ZIRP), keeps the supply chains humming in the short term – during the times of crises, it can also clog the wheels in case the monetary system ODs on the resulting debt (other people’s money or OPM in short).
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February 9, 2015
Who is going to win the battle of Titans (Apple, Amazon & Google)
As everybody knows, three giants in the tech and software world have amassed an incomparable power in recent years from their networks and their strategies. With a vast range of products, they have stitched up the market amongst themselves. But what are the strengths and weaknesses of each giant?
What are the deep business and supply chain implications of the battle of these Titans?
Each one of them is a Business-to-Business Network in its own way with excellent partners and supply chain participants. Apple has its own ecosystem, which is not just their customers, but also thousands of programmers and app developers as well as millions of sellers on iTunes. That is Apple‘s biggest strength.
The same goes for Amazon, with an ecosystem including a very large customer base as well as thousands of sellers that sell their products on their website.
On the other hand, almost everybody uses Google as a search engine, which means they have the largest market share now in the mobile operating systems with Android. Google also owns YouTube and many other digital properties. Each one of them has a formidable Supply Chain, Business-to-Business Network or Supply Network in its own right.
Yet now, all three of them are facing problems in different ways.
Apple is facing problems because its success has always been based on creating the next big product, especially if you look at Apple’s history (iPod à iPhone à iPad). Now, Apple is launching the new Apple watch, which is not a very successful product in my mind. IPhone 6 is obviously just a minor update of the previous successful iPhone. That is where Apple is currently failing. However, they are creating some really innovative services such as Apple-Pay, which allows you to use your mobile as a NFC-based payment option, and Apple-SIM, which allows you to roam at a very low cost in foreign countries.
Apple continues to profit from past supply chain and product successes, and sits on top of huge pile of cash. Amazon, on the other hand, does not make much profit, although it has a very high growth rate of revenue (it grew by around $24 billion in two years) and still growing.
Source: http://time.com/money/3656571/apple-amazon-google/
But they invested in a number of things, which did not turn out that well. This type of experimentation is in the DNA of the company, and at the moment, it is not a big problem, at least not yet. Nonetheless, a couple of these investment, noted by analysts and commentators, have raised red flags in my mind. Amazon Fresh seems to be a resurrection of the business model of an failed company called Webvan, which invested $1 billion in this field and went bankrupt in two years.
Amazon also continues to invest in expanding its business in India, which is a very competitive environment. With local market players who know the local characteristics much better, and a chaotic marketplace, this is perhaps the most uncertain field for Amazon in my view. The competition may not even be from other B2C e-commerce companies; every man with a mobile phone and a bicycle is a potential competitor. Amazon persists in investing in these two markets.
This could be much more harmful to Amazon than their mobile phones or other hardware devices that they keep creating every few months. They are losing money on those but for a purpose: they are trying to lock customers into the Amazon Network. Nevertheless, these products will never replace iPhones/iPads or equivalent Samsung products and will always be number two in customers’ minds.
The question is: Where is Amazon’s next platform for growth?
Amazon’s “unsexy” B2B business, a “$8 trillion bet”, has been growing silently in the background, perhaps making it eight times bigger than Alibaba and the biggest 5-STAR Business Network on earth.
AmazonSupply, a wholesale and distribution hub, started in 2005 and has grown to carry 2.2 million products, ranging from office equipment to industrial components, materials and more. After nearly 15 years of languishing on the wayside, the B2B exchanges are finally coming true, slowly.
Already, wholesalers are whispering about the threats from AmazonSupply; although many specialty wholesalers and distributors are somewhat confident that their turf is safe from the giant’s claws due to their highly segmented market.
Nonetheless, AmazonSupply, Alibaba, or B2B exchanges, could become so powerful that they will suck small players into their enormous vacuum of suppliers. The process can even accelerate if trust keeping mechanisms are built into B2B exchanges.
Seller and buyer ratings, as well as seller/buyer protection seen on sites such as eBay and PayPal are not enough to cover the sheer size of B2B transactions. Even the current rating system on Alibaba will not suffice, should this attractive market grow in the years to come.
Looking at Google, basically revenues of advertisements relating to search engine are stagnating/saturating. Fake clicks are being identified much more easily. People are becoming more careful of what they are spending on online advertisements. Android and YouTube are two engines of growth for Google. Google has declared a strategy of continuing investment in its YouTube products
It is easy to argue that Apple has the best chance of leading the pack in 5 years’ time depending on what kind of new hardware they manage to create in the next 2-3 years. Google and Amazon are probably equal second depending on whether Amazon succeeds in its strategy to capture Business-to-Business markets or whether Google manages to monetise YouTube as much as they can.
Equally likely, new competitors might emerge on the horizon – like superUber! That will be very interesting to see.
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VIVEK SOOD:
ABOUT VIVEK SOOD:
Vivek is the Global Supply Chain Strategist and Author who works globally with large and mid-size corporations to FIX their Business-to-Business Networks in order to their multiply profits.
In that last 14 years he created several new breakthroughs in Supply Chain – including business transformations led by SCM 3.0. His more than 400 projects have spanned approximately 84 countries on five continents, with clients ranging from fortune 500 companies to innovative green technology companies.
Get free extracts of his books and see why thousands of executives at the world’s leading corporations trust Global Supply Chain Group to build brilliant business-to-business network strategy.
We are rapidly growing and hiring. Exceptional (world’s best) Outsourcing Experts, Logisticians, Strategists and Supply Chain should contact me directly.
Follow Vivek here and @GlobalSupplyCG
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If you are a HR professional, recruitment or HR consultant – and you think your clients might benefit from these insights about business transformations – feel free to forward this blog series via email or linkedin. The nature of your industry is changing rapidly as a result of forces mentioned in this article.
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How Google is Looking to Change the Corporate World in 2015, Again
By Vivek Sood
The Corporate World in 2015
Changing Business Models – Push television/video to YouTube:
Videos ad revenues from YouTube in the US would hit $1.13 billion by the end of 2014. In 2015, Google is making a huge change in the way it has been promoting YouTube: they are going to put significantly higher focus on it.
(Source: http://www.cnet.com/au/news/4-things-to-expect-from-google-in-2015)
Why Google is making this move? Let us unpack Google’s strategy.
Google’s traditional advertising revenue from SEO is starting to stagnate. Among the explanations, one is all robotics clicks are starting to disappear because Marketing Managers have begun to understand that not all clicks are from interested costumers. So they are questioning more and more: Are the clicks they are paying for actually leading to customer purchase or not?
Google’s traditional business is under threat from those who are more in touch with the changing SEO landscape, and are now starting to demand value for money.
At the same time, Market penetration of Search Engines is saturating. Thus, the growth in their market is not as high as it was in the last decade. Google has to search for new revenues of growth and YouTube is one of those new revenues.
YouTube is a growing business. Why? Because an average American, European or Australian still watches numbers of hours every week on televisions and Google is capable of facilitating high quality contents available on demand on any screen at anytime.
Transitioning consumers from cable television or Free-to-air television to online YouTube consumption will have huge implications for the business models of traditional television, as well as Marketing and advertising companies.
Big budget TV advertising will start to diminish. Most of the YouTube’s ads can be produced on much smaller budgets. Because of the fact that customers can be very highly profiled on Google/YouTube, using Google Analytics, one big ad can be replaced by a multiple of highly targeted storyboards speaking directly to each of the niche segments. Typically big advertising agencies are not very good at speaking to the small niches.
That means a number of small advertising companies who are good at low budget niche advertising will crop up. These companies maybe eventually be acquired by large advertising companies, under one umbrella, but they need to have reasonable amount of autonomy and independence to operate on small budgets and retain their key characteristics.
The CEOs and Executives need to know this: their entire world of Sales & Marketing is going to change in the next five years due to the breakdown of the traditional television and advertising model .
The public should know that more and more relevant and highly targeted programs will be available on YouTube, in paid and free formats. On-demand will become the norm: when you want it, where you want it, how you want it, big screens, small screens, tablets, and smartphones.
This change will also have implications for recorders like TiVos and PVRs – people will stop using those, or use less and less of personal video recorders. So if you are thinking of buying one those things, hold off because the price is going to fall!
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Understanding and Using Resistance – in Business Transformations Using SCM 3.0
ລາວ: ການຈັດການຕ້ອງເຮັດໃຫ້ດີ (Photo credit: Wikipedia)
19 years ago, when studying for MBA, our Professor in Change Management, Dexter Dunphy told us that Change Management is nothing but management of downside. I understood that his point was every change has a downside – and as a change manager, the most important job you have to do is to understand the downside of the change being proposed, and manage it well enough. When I became a management consultant with a top-tier strategy house after my MBA, I took his dictum to heart, and it served me well through several change management projects. Those who were most affected by change appreciated the fact that the change was managed in a sensitive and caring manner – rather than imposed abruptly.
Auroville boutique (Photo credit: Wikipedia)
After a few years, when we started our current boutique consulting house, I started to notice another pattern. This was that many companies could accelerate their change management by skipping one entire generation of Supply Chain Management (SCM) in their efforts to make their businesses more modern. In other words, change management would entail moving from SCM 0.0 to SCM 1.0 or from SCM 1.0 to SCM 2.0 or from SCM 2.0 to SCM 3.0. On the other hand, many companies would want to take up an accelerated path – jumping 2 steps at a time – e.g. SCM 0.0 to SCM 2.0 or from SCM 1.0 to SCM 3.0. This enabled them to frequently leapfrog their competitors, and transform their businesses rapidly and systematically. This was nothing different from many companies skipping a generation of Microsoft Windows when they upgraded their operating systems – for example skipping Windows Vista and jumping from Windows XP to Windows 7.0. The reasons were different, yet the methods were similar.
While change management entailed managing the downside for those who were affected by change, business transformation was more about understanding and managing resistance. By now, downside management has already become a big enough industry – just look at the number of large outplacement consulting houses, HR consultancies, and the booming business they do through the ups and downs of business cycles.
Business Transformations will lead to a second boom in these. If a business keeps up with the SCM evolution and moves with it, there will be a greater need for leadership training, corporate cultural adjustment, collaboration training and less outplacement and redundancies.
And, there will be a need for understanding, managing and using resistance to further business transformation.
What is the nature of resistance? What is the reason? How to identify 4 different types of resistance? How to use resistance to accelerate positive business transformations? That will be the topic of my next blog.
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