How Business Capabilities Can Differentiate (Every Company)

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Our recent past president Kevin Williams coined the insight, “logistics is the new marketing“. He backed it up by sending us the following excellent article.

This is the 4th day of our tour of fiber, thread, yarn and textile production in the Carolinas. We have 27 people from brands and retailers. For one young lady, this is her first week on the job. Others are supply chain veterans. We have met few of these people before. After all of yesterday morning at Contempora Fabrics in Lumberton NC, virtually 100% said something to the effect, “I’ve been in so many textile mills but no-one ever took the time to educate me on what I was seeing”.

In our industry, assume nothing. Not everyone in the industry had the privilege of graduating from NC State’s Textile program, which is common in the Carolinas.

We have NEVER organized such a complex event. It has turned out to be the toughest yet truest thing we may have ever done. We’ll send you a report soon.

(Photo courtesy of Devin Steele of ETC)

How Business Capabilities Can Differentiate Brands
Posted: 10 Apr 2018

In her book The End of Competitive Advantage, Rita Gunther McGrath argues that any individual advantage in the marketplace today is likely to be fleeting and that companies, therefore, need to be constantly investing in their next-generation business model and new capabilities that will differentiate it. Let’s illustrate how this works at a company that whose ascent has been based on an ability to constantly build significant new capabilities to push the boundaries out and innovate around its business model. The company is Olam.

From its modest beginnings, in 1989, building a uniquely safe and corruption-proof supply chain to bring cashew nuts from Nigeria, Olam has expanded to forty-five commodities in sixty-five countries, reaching a level of $13.6 billion in annual revenues and more than $650 million in profits. The company’s success has made it one of the best-performing IPOs in Asia of the last decade and its CEO, Sunny Verghese, has won many awards, including CEO of the year in Southeast Asia. The company’s performance is all the more amazing given the low growth of its markets, the practical challenges of building secure supply chains in places like Nigeria, and the inherent complexity of the business.

Consider this. Before Olam, the typical cashew farmer would sell his crop to a local intermediary, who would then sell the shipment to a distributor, who would then hire someone else to transport the product to warehouses where large global companies would collect it. No one “owned” the full supply chain. As a result, it was leaky, unreliable, hard to trace, and rife with corruption. Farmers received only a tiny fraction of what they were entitled to. Verghese and his team believed that they could differentiate the company to global customers like Nestlé by focusing on the end-to-end supply chain, with the goal of managing the whole thing themselves. Olam succeeded and now has the only supply chain in its key markets that is completely controlled from the farm gate to the end user. Anyone who wants to be a manager at Olam must spend at least three years living in a rural community doing the ground-level work. Read More

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