Gaining a Supply Chain Edge

Five Nuggets of Wisdom for Pursuing Profitable Growth in Post-Recession Times

In the Global Supply Chain Podcast series that I host, we have been focusing on profitable growth. We are only half-way through the series, but I just realized that we are really creating a gold mine of information on the topic. We have looked at profitable growth through the lens of organizational excellence, marketing and solution selling, the service supply chain, and operational and strategic approaches.

Here are five nuggets of wisdom, condensed for blog readers.

1. Profitable growth is not just about more revenue, or cutting all costs. And it is not about spending money on as many projects as possible. It is about growing revenue, controlling costs and doing it with sound, logical investment.

2. If a company would like to grow while making more profits, service supply chains present a great opportunity to achieve both, not to mention a positive impact on customer delight and retention.

3.The word growth is most often tied to the top line, as increased revenue. The word profitable is most often tied to the bottom line as increased profits. So yes, what we are talking about with profitable growth is increasing both the top-line and the bottom-line of your company.

4.Companies want to grow their revenues while simultaneously increasing their operating margins. They do not want to grow at any cost -– they want responsible growth which allows them to continue to focus on operational excellence. They want growth that positively affects both the top line revenue and positively affects the bottom line costs. The focus today is not purely on capturing market share at any cost, but on growing and improving the overall business in a planned, manageable way.

5.Organizations must have excellent anticipation and planning, as well as processes in place, to run the business with a smooth, stable and harmonized supply chain, (which is the base for profitable growth). Not anticipating scenarios and not having processes in place covering the changes leads to interruptions. Exceptions that are not planned and processes not in place to cover them lead to increasing costs, which in turn reduces profitability.

The supply chain is a major enabler for profitable growth in organizations. Do you have any nuggets of wisdom to add about the topic? Let me know in the comments.

These thoughts are all taken from the profitable growth series on the Global Supply Chain Podcast.


Jim
Tompkins Associates

TAGS: Supply Chain
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