Friday, April 29, 2011

The Only Stupid Question,

is the one you don't ask.

I was taking a few moments this morning and came across this topic in one of the blogs that I follow. Evidently a prospective entrepreneur asked a question at a seminar and was not treated with a great deal of respect. I think this happens way more than it should and it leads to many people sitting on their hands rather than jumping into the fray. Let me say this in the strongest possible terms: if you are an entrepreneur or thinking about becoming one, never be afraid to ask your questions. Sure there may be people in the room that already know the answer and bully for them. That does not lessen the legitimacy of the question or the fact that others are sitting there wanting to know the same thing.

To take this discussion a step further, I implore you to take the time to develop a written business plan! This includes balance sheets, cash flow statements and break-even analysis. If you don't know how to do these, ask for help. It is available from several partners across North Carolina and in many cases at little or no costs. This will lead to a better understanding of what you are trying to accomplish, who your market is, how much money you need to start and at what level you become profitable.

So don't worry about the guy or gal who sits there and rolls their eyes or snickers when you ask your question. Most of the times, these know-it-alls will be the first ones who go out of business!

Monday, April 18, 2011

Why Bringing it Back is Not the Answer

Or at least not all the answer. I found the blog below during my daily reading and I think it makes many interesting points. I also think that is misses one very major one. Once companies have grown to a certain level of sophistication, they must start looking for ways to cut cost, increase production and add to the bottom line. The only way they are going to do this is increase productivity and cut labor cost.

Where we in the U.S. are falling behind is our R&D. We became a Super Power by being ahead of the curve, not figuring out how to cut costs and produce goods at lower margins. We would create a new product, or advancement of and existing product, skim of the cream (highest profits) and move on to something else. We won because we were creative and spent the time, energy and money to figure out what to do next. It really didn't matter that the Japanese or Chinese or anyone else were stealing our technology and reproducing it. By the time they had perfected the old technology, we were already two steps ahead. This is not happening today and we are facing a real crisis. So I applaud the efforts to "onshore" jobs, to tighten supply chains and to pay attention to customers, but if we don't get our act together on the research and development issue, I fear that we will find ourselves on the outside looking in.

Enjoy the attached blog and let me know your thoughts:

Why Bringing It Back Home Makes Sense
In Uncategorized on April 17, 2011 at 8:10 am

There has been much speculation and conversation of late about U.S. manufacturers considering “on-shoring” or “re-shoring,” essentially bringing production operations back home.

When I read articles on this subject, I cannot help but think of a quote from A.G. Lafley, the former CEO of Procter & Gamble, which goes to the heart of this issue.

“The only strategy that matters is one that touches the consumer.”

This quote, provided to me by a former P&G exec Ed Burghard, is one that I periodically revisit to remind myself of certain fundamentals that should never be lost on anyone in business, but frequently is. The customer really is boss, and if you don’t provide the product or service expected, watch out.

Certain American manufacturers have learned the hard way that they could not best meet the needs of their customers with production facilities offshore, especially if their customers were here in the United States.

What It Is and What It Isn’t

And that is by definition what off-shoring is all about. It is not about moving production to another country simply to meet customer demand in that particular market. If you are making widgets for a Chinese market, which is a very big and growing market, then it might be a very smart and appropriate move to build a plant in China. But I don’t consider that off-shoring.

Rather, off-shoring is about moving operations offshore only to later import the goods back into the U.S, which still remains the world’s largest market, to fulfill demand.

Mind you, it can work. It has worked, particularly for certain industries such as telecom. But for many U.S.manufactures, off-shoring has not proved to be the panacea as expected.

Let’s Get Closer

A recent survey conducted by Accenture among 287 manufacturing companies identified that, in order to compete effectively, they needed to rebalance their existing supply footprint to better match with demand location. The majority of 61 percent of the respondents said they are currently considering shifting their manufacturing operations closer to customers to provide better service and to enable accelerated growth.

“Companies are beginning to realize that having off-shored much of their manufacturing and supply operations away from their demand locations, they hurt their ability to meet their customers’ expectations across a wide spectrum of areas, such as being able to rapidly meet increasing customer desires for unique products, continuing to maintain rapid delivery/response times, as well as maintaining low inventories and competitive total costs,” the Accenture report said

Managing supply operations that are separated far from where demand occurs has weakened some companies’ overall operational planning, forecasting and general flexibility, while driving up costs, particularly when energy prices are soaring. In short, the off-shoring experiment for many has backfired.

It would probably not be accurate to call off-shoring a fad. Again, it does work for certain companies in certain industries. But it is also clear that there is a lot of me-too-ism in business, a lot of follow the leader because they might know something we don’t know. For many companies, these strategic moves were simply not well thought out.

For example, nearly half (49 percent) of respondents in the Accenture survey reported facing issues with cycle or delivery time, and 46 percent have experienced product quality concerns as a result of off-shored manufacturing and supply operations.

Seeking Nirvana

The simple truth is that global competition will always force factory managers to try to replace expensive workers with machines or with low-wage labor overseas. Seeking nirvana through low labor costs has been a prime reason for off-shoring. By the way, it is also been the reason why the U.S.manufacturing is as efficient as it is. Because we cannot compete in terms of labor costs, we have had to develop more efficient, more automated systems for production. The proof is in the numbers.

A recent report by HIS Global Insight said China required 110 million workers to produce approximately the same amount of goods that 11.5 million American workers could produce. You may want to read that again.

In 2009, productivity in U.S. manufacturing increased by 7.7 percent, more than any other country followed by the Bureau of Labor Statistics.

The simple truth is that manufacturers in the U.S. beat sweat-shop wages in developing countries through innovation employed here at home. It is the only way we can hope to compete. It is our only chance.

But clearly it is a chance, a risk worth taking for many manufacturers who have discovered issues of quality control that is not to their (or their customers’) liking and that total costs of manufacturing off-shore turned out to be not as low as expected.

What Happened to Our Cost Savings?

For one, labor costs are rising in Asia, particularly China, where wealth is building and a middle class is being created. And on the energy front, many analysts are predicting $150 a barrel oil before the end year’s end. Any way you cut it, moving a container load of pink flamingos from a far-off plant in Shandong province in China to the U.S. and to eventually find its way into your local Tacky Wacky store (I just made that up) is going to become more expensive. That is just the way it is.

So the seemingly initial cost savings – the reason why many if not most U.S.manufacturers jumped into a off-shore strategy with both feet are no longer so big. In fact, they are diminishing. And then there are your customers, you remember them. They are those pesky, challenging people requiring better service, agility, speed, and quality.

And now it starts to dawn on you that your plant in Shandong province alone may not cut it. Indeed, if you are going to keep these customers as customers, you are going to have to bring at least some production back home.

And that is what is happening, pure and simple.

The Right Strategy

“Getting closer to the customer allows for improved flexibility to respond to uncertain mand and unknown customer requests in an agile way with fast delivery times while maintaining high quality and optimized costs,” the Accenture study said.

It may not always prove to be the lowest cost strategy, but it is the right strategy for keeping customers happy. So a rebalancing act is taking place to better match supply operations with demand locations. BMW, Nissan, Siemens, Electrolux are recent examples of companies investing hundreds of millions of dollars in this country in pursuit of a strategy that A.G. Lafley spoke about.

Yes, indeed, it’s a brand new world out there. Heck, it’s always a brand new world.

Dean Barber is the president/CEO of Barber Business Advisors, LLC, a site selection and economic development consulting firm in Red Oak, Texas —

Friday, April 15, 2011

Stokes County Treasure

As spring move onward, I wanted to take an opportunity to bring you up to date on the lake and beach opportunities at Hanging Rock State Park. In addition to the wonderful trails, wildlife and vistas to enjoy, you now have additional hours to enjoy the lake and beach area.

Hanging Rock Lake

Fishing is permitted year round on the lake for bass, sunfish, and catfish. Anyone over 15 years old must have a NC fishing license. Fish from the shore, the wheelchair accessible pier, or from a rental boat. Only the swim beach and stone dam are off limits to fishing. There is no fee for fishing.

Rowboats and Canoes are rented for use on the lake weekends April, May, September, and October, and daily Memorial Day-August. Spring and fall hours are 10:00 a.m. to 5:00 p.m. Summer hours are 10:00 a.m. to 5:45 p.m. Rental cost is $5 for the first hour and $3 for each succeeding hour. To protect the lake from weed introduction, private boats are not allowed.

The Lake Refreshment Stand is open on weekends April, May, September, and October from 10:00 to 5:00 and is open daily to 5:45 Memorial Day through August.

If you are a regular visitor to the park, welcome and if you haven't visited the park, what are you waiting for?

Friday, April 8, 2011

What Consumers want from facebook

Below you will see information that may surprise you somewhat. That certainly appears to be the case for many of the large corporations in America. They have been busy trying to have a conversation with their customers rather than offering them what they really want, which is deals or special promotions for their products.

The social media perception gap
April 4, 2011 by engagesciences0
inShare.Most companies are misunderstanding the massive opportunity that social media marketing represents. Last month the IBM Institute of Business Value published a report entitled ‘From Social to Social CRM’. The report surveyed 1000 consumers about the reasons they interact with companies via social sites and then compared this with the results from surveying 350 business executives on why they thought consumers followed them on on social media. The results highlighted a perception gap that can only mean companies are missing out on direct revenue opportunities.

The reality is social media followers WANT to be monetized – they are after deals, promotions and discounts. Unfortunately most business executives are barking up the wrong tree by thinking that conversation with the brand is what drives people to follow them. In reality it is quite the opposite. Of course this represents a massive opportunity. If brands build up large social followings they can distribute social offers into this community and the research suggests that commercial results will be healthy. You can’t get more focused social ROI than campaigns focused on revenue. Marketing executives need to meet consumers expectations when they follow companies on social sites through providing regular deals, coupons and social offers.

This reminds me of what an "old time" salesman told me one day after I had made my sales pitch. I was really excited about the job I had done and I had walked out with an order. I asked him to critique how I had done, just knowing that I had hit it out of the park. He looked at me for a moment, sort of nodded and said: " Wood, you did ok but you talked to #### much, just say your piece, ask for the order and shut-up." This sounds like sound advice to anyone trying to promote products on social sites. Give them what they want, then get out of the way.