Jerry mentioned the Director article which is not available online so here it is (my piece) in a nutshell:
Wine merchant Edward Parker says margins in his sector are not generous and so 'cash flow management is absolutely key'. So too is seamless operations strategy. Parker sources wine for private individuals from producers globally and delivers across the UK...
Robert Craven, founder, The Directors' Centre
You are right to be sensitive to the situation. Your long-term financial performance will be related to your ability to get the right product to the right person at the right time.
To manage the unforeseeable is a contradiction. You must keep involved and engaged in every stage of the supply chain. To manage customer expectations, you need to know what is happening.
One option would be to offer gold, silver and bronze guaranteed delivery dates to accommodate different customer expectations with prices to match.
Clients will tolerate late delivery if they are kept in the loop or offered alternatives. Ironically, the ambiguous delivery time could be used to his advantage and built into the story. You say “most of your suppliers are in France”. You could state: “Our wines are sourced from small family businesses so our delivery schedules may appear a little erratic”. This adds to the mystique, builds in some slippage and early delivery will be an extra surprise.
The full article can be read at this scanned pdf.
17 comments:
Nice to see you in Director. Does anyone actually read it these days?
Andy
Agreed.
Director needs some spice - they need RC.
Morag (creep, creep)
Hm. Director. Still conjures images of red cheeks, fat arses and Chesterfields. Things might be changing, but I never thought of Robert Craven as a supply chain expert, (though he is an expert at many other concepts) and his article may prove my thoughts.
His advice on offering "Gold, silver and bronze guaranteed delivery dates to accommodate different customer expectations with prices to match" is unworkable, unless you happen to be Amazon.
All customers should be offered "Gold" standard delivery, and you should be partnering with like-minded suppliers to attain this. You should also be selling the partnership concept to your customers - after all, they are also part of the supply chain. They pay the price, and on time. In return they get the full "gold" service.
Offering to deliver at least two other tiers of what are, in essence, weaker services, in exchange for less money, means less revenue for you, and probably a reputation to match your weakest offering. It also means that you and your suppliers will have to structure two other systems, and thus have three to manage simultaneously. Utterly confusing for all, and thus utter nonsense.
Further, to suggest "the ambiguous delivery time could be used to his advantage and built into the story. You say most of your suppliers are in France. You could state: Our wines are sourced from small family businesses so our delivery schedules may appear a little erratic,” is another recipe for building a poor reputation, and creating/advocating dishonesty amongst your team.
I usually agree with Robert's view, as it is logical and well-formed. This article however, I could not disagree more with. It is a recipe for disaster.
Let's see what RC says. Not sure that gold/silver/bronze is so unworkable. RC is not, I imagine, a supply chain expert. Your comments about dishonesty seem a little harsh.
Morag
It was a bit of a shocker that none of the advisors in the article gave a practical answer to the merchant. Sorry RC, I'm in agreement with Andrew re the proper advice - I don't know about the "fat arses" bit.
RE Gold/Silver/Bronze. This is not so much the right answer as something to be considered.
I was thinking of three examples/cases I am familiar with as a comparison.
1 A specialist haulage Firm - offers G/S/B packaghes and alaways tries to delight. (Probably the largest truly independent left despite the recession and fuel prices)
2 Web Design company: most profit pw is made at Bronze Level. 1 Bronxe employee sells 5 days pw at £600 GP per day = 3,000 pw. 1 'maxed-out' Gold consultant sells 3 days pw at £800 GP per day = £2,400pw. Their conclusion was to sell more at the scaleable bronze level where the demand was and where the less expensive resource was.
3 Organic Wine Company that does exactly as I said. Loyal clients adore the idiosyncratic/individual nature of the business.
I am not saying any of these are 'the right answer'... just offering them as examples of how G/S/M can work.
RC (not a supply chain expert)
Re - proper advice
the nature of these articles is that the 'experts' are asked for an opinion and give it. How the opinion is presented and in what context and so on is usually out of your own control.
RC
re magazines etc
Magazines etc are primarily interested in selling ad space.
The content (whatever it is) is just a filler. As such some magazines are not desperately rigorous when it comes to having the best and most thought-through, coherent, article content.
Without criticising the experts in this case (as I don't know the details), sometimes the content we buy/read is just a sideline to the business of selling ad space.
Sorry.
Another R
Reading between the lines
RC is not a supply chain expert
RC & others were asked to comment
RC & others commented
Director mag got their filler
It was printed.
(I get Director mag as a member of the IOD - I use their facilities. Not really a club because it doesn't feel owned or run for the benefit of the members.)
Not quite the same but serenata wines deliver different delivery price points (but from UK not from France).
"Our standard next-day wine delivery service is available etc etc
Fancy a timed delivery? No problem:
Delivery slot Surcharge
8.00 a.m.– 6.00 p.m. £4.99
Before 10.00 a.m. £9.99
Before noon £8.99"
I saw the article as a general piece.
Nothing profound expected. It is Director magazine and not Harvard Business Review or the FT.
I am afraid the general quality of most journalism is of the dumbed down variety!
Just had a careful look at this and actually it was a sponsored page! So it was just a glorified ad?
Jerry
Jerry
An interesting comment. I was not aware of this at the time. The link at
http://www.director.co.uk/MAGAZINE/2009/10%20November/business_clinic_63_03.html
makes this clear.
Robert
Jerry
An interesting comment. I was not aware of this at the time. The link at
http://www.director.co.uk/MAGAZINE/2009/10%20November/business_clinic_63_03.html
makes this clear.
Robert
Not quite the same but serenata wines deliver different delivery price points (but from UK not from France).
"Our standard next-day wine delivery service is available etc etc
Fancy a timed delivery? No problem:
Delivery slot Surcharge
8.00 a.m.– 6.00 p.m. £4.99
Before 10.00 a.m. £9.99
Before noon £8.99"
Re - proper advice
the nature of these articles is that the 'experts' are asked for an opinion and give it. How the opinion is presented and in what context and so on is usually out of your own control.
RC
Hm. Director. Still conjures images of red cheeks, fat arses and Chesterfields. Things might be changing, but I never thought of Robert Craven as a supply chain expert, (though he is an expert at many other concepts) and his article may prove my thoughts.
His advice on offering "Gold, silver and bronze guaranteed delivery dates to accommodate different customer expectations with prices to match" is unworkable, unless you happen to be Amazon.
All customers should be offered "Gold" standard delivery, and you should be partnering with like-minded suppliers to attain this. You should also be selling the partnership concept to your customers - after all, they are also part of the supply chain. They pay the price, and on time. In return they get the full "gold" service.
Offering to deliver at least two other tiers of what are, in essence, weaker services, in exchange for less money, means less revenue for you, and probably a reputation to match your weakest offering. It also means that you and your suppliers will have to structure two other systems, and thus have three to manage simultaneously. Utterly confusing for all, and thus utter nonsense.
Further, to suggest "the ambiguous delivery time could be used to his advantage and built into the story. You say most of your suppliers are in France. You could state: Our wines are sourced from small family businesses so our delivery schedules may appear a little erratic,” is another recipe for building a poor reputation, and creating/advocating dishonesty amongst your team.
I usually agree with Robert's view, as it is logical and well-formed. This article however, I could not disagree more with. It is a recipe for disaster.
Post a Comment