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

Sept. 25, 2010
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 ...

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

About the Author

Jim Tompkins | CEO

Dr. James A. Tompkins is an international authority on leadership, logistics, material handling, outsourcing, and supply chain best practices. As the founder and CEO of Tompkins International, he provides leadership for Tompkins globally.

His 30-plus years as CEO of a consulting / integration firm and his focus on helping companies achieve profitable growth give him an insider’s view into what makes great companies even better. Listen to an interview of Jim Tompkins on the Business Leader Radio show.

As a high-level business advisor, his unique perspective prepares corporations and executives for the future.

To share his knowledge and provide up-to-date information on supply chain and business trends, he developed the GoGoGo! Blogand Global Supply Chain Podcast.

He has written or contributed to more than 30 books and eBooks, including Caught Between the Tiger and the Dragon, Bold Leadership, Logistics and Manufacturing Outsourcing, The Supply Chain Handbook, andNo Boundaries. Jim has been quoted in hundreds of business and industry magazines such as The Journal of Commerce, Supply & Demand Chain Executive, and FORTUNE, and he has spoken at more than 4,000 international engagements.

Jim has served as President of the Institute of Industrial Engineers, the Materials Management Society, and the College-Industry Council on Material Handling Education, and Purdue has named him a Distinguished Engineering Alum. He has also received more than 50 awards for his service to his profession.

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