Many mid-market companies today are looking to expand their footprint and grow their business – either internationally or regionally. What is the best way to do this successfully? Is it all about Marketing and Advertising? Is it about mergers and acquisitions? Is it about R&D of new products? Is it about pricing and promotions?
Those activities may drive growth, but ironically, the rising operational complexity and costs resulting from undirected/unsupported growth can stop companies from sustaining their growth targets. What’s missing then? Can excellence in execution actually be the key ingredient required for sustained, successful growth?
“Companies that saw sustained growth focused on internal factors under their control: the strategic and tactical execution of their vision…”
Growth is Easier Said than Sustained
According to a recent American Express survey of US Mid-Market Companies, the single most important priority for 51% of them over the next six months is growing their business. Companies also said:
- The #1 thing to help them grow is investment in infrastructure, including technology and operations.
- As they tackle growth, #1 challenge they face is managing the rising costs and complexity of doing business.
In other words – “growth” is easy to say, and potentially achieve, but difficult to sustain.
There was also a separate study recently done by the National Center for the Middle Market, “Pathways to Growth.” The study looked at track records of variety of mid-market companies, and broke them out into different categories. The common theme they found was that the “Non-growers” focus on external challenges, such as changes in market demand or unexpected disruptions, while companies that saw sustained growth focused on internal factors under their control: the strategic and tactical execution of their vision.
Supply Chain Execution begins with Strategy and Design
It’s important to think strategically and design your manufacturing and distribution activities to work well holistically to enable more efficient execution as your supply chain grows in volume and complexity. It’s important to analyze how effectively your current product, processes, and tools can scale for higher volumes, increased complexity, and greater breadth of distribution, all while minimizing risk.
You will want to optimize your physical product, supply chain, and use of outsourced partners so consider potential changes to:
- Physical product design (i.e. postponement, modularity, component commonality, etc.)
- Physical supply chain (i.e. location and number of manufacturing sites, warehouse sites, distribution center sites, routes-to-market, transportation modes, etc.)
- New supply chain partners required to execute your plans such as CMOs, 3PLs and retailers
An Expanding Business Requires an Agile Supply Chain
Although excellent supply chain execution starts with strategy and design it’s enabled by effective business processes and tools.
When you expand your business volume, your business risk increases according. Expanded regions to cover, additional clients to service, more products to source and deliver all lead to increased complexity that you must balance and manage. So you must consider business process or technology changes to manage your higher supply chain volumes with agility. You need the ability to access, analyze and respond to a tremendous amount of information quickly and effectively!
Execution with agility requires:
- Real-time visibility: This means visibility across your entire supply chain – both inbound and outbound flows. You can’t respond to what you can’t see!
- Data integration: This is required for visibility, across both internal systems and external partner systems. You system must be able connect quickly, and normalize the data so it’s useful.
- The ability to collaborate effectively with partners by providing all partners:
- Access to data that is relevant to their activities.
- The ability to quickly update and execute transactions relative to that data.
- The ability to communicate/share their updates and executed transactions back to you.
- Clear, consistent, well-defined business processes: The ideal would be as many common business processes as possible across regions and business units, because fewer processes mean less complexity. However the reality is that process variations are almost always required in complex global supply chains. Handling those various processes and complexity manually is time consuming, difficult and error-prone. Supply chain tools that allow you to automate your core business processes will enable speed and accuracy, and only require human interaction when process exceptions occur.
- Ongoing process improvement: Perfection is impossible so it should be an ongoing priority to constantly evaluate the status your execution and find ways to improve. This makes it critical to have supply chain tools that provide access to key performance metrics and reporting.
Mid-Market Business Growth for the Long Term
So before you drop that $1,000,000 on your 30-second Super bowl ad, try the recommendations above to see if you can execute your way to sustained, successful mid-market business growth.
You can also contact us to discuss how a supply chain collaboration solution could help sustain your growth.