Fortune (May 1, 2006)prints a report that should give everyone hungry for low-cost manufacturing in China pause. It seems that once you've trained the crew, handed over the blueprints and turned the crank on production, it is very hard to turn if off again. Meaning that once your sub-contractor has done their bit for you, there is nothing to prevent them doing just a little more - except that this time it's for themselves. In fact, they can do so much more that they can sell items that are indistinguishable from the real thing -- because they MAKE the real thing.
For all those looking for a reason - any reason - to keep manufacturing at home, this one might prove among the most compelling in the long term. Check it out.
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Now I've seen it all. Business Week (May 1, 2006) has a long discussion of how Tide and other consumer brands are being made into 'so much more than just detergent' by companies seeking to appeal to the deeper emotional needs of potential customers. One that grabbed me -- "One of our rallying cries was to get out of the laundry basket and into her life" quotes the P&G fabric care marketing director.
Imagine how interesting life could be if more companies took a more compelling view of their products.
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So how is this for interesting? Business 2.0 reports in April that Ireland's Ryanair may soon be prepared to give away tickets for flights for free. What's the catch? You pay for everything (and I do mean everything) else that used to come along with the flying experience. Not just food & drinks, but for things like checking your bags. They are serious about keeping costs down - to the point where they even remove the seat-back pocket to save space and weight.
When you think about it though, how creative! Customers are basically saying they don't want to pay for flying - so why not give them exactly what they are prepared to pay for.
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This is an interesting way to deal with workforce flexibility. Business Week (April 17, 2006 edition, p. 14) reports that McDonald's in the UK is testing a program that allows employees from the same immediate family to fill in for one another without clearing it with the boss. It's called the family contract, and in my opinion is a great way to deal with the fact tha work and family often require juggling to accommodate the demands of both. According to the story, about 1.5% of the 60,000 British McDonald's workers are related to one another.
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Just learned about an extremely interesting idea for helping customers' improve their key metrics. It turns out that many large companies are actually unable to manage their procurement supply chains very effectively because there is a lot of information loss from the signing of a contract to the payment of a check. The dilemma is that as the payment system increases in complexity, it gets easier for vendors to charge more than they are entitled to. Often, these payments can slip through the cracks.
Enter The Buying Triangle,
http://www.thebuyingtriangle.com/a new company founded on the concept that helping companies manage their payment streams better will have value.
A typical overpayment occurs because the supplier puts in a bill for a more expensive offering than was actually delivered. For instance, a letter carrier might charge for a heavier package than was sent, or a service provider might charge for a higher class of service. It looks at first glance as though the bill is for items that are covered by the contract. But it isnt until you go line-by-line to see what was actually sent that you can pick up the discrepancies. So one of the things this company does is monitor the actual goods and services delivered and map these against contracts and payments. They estimate that a product offering they call
PtoPSmart can save a typical large corporate customers 10% to 15% of their purchasing bill.
Check out their web site. Who knew there were so many exciting things going on in the world of purchasing and procurement?
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