Cincinnati, OH -- If you watch and read much of the gloom and doom dominating the news, you may believe the economy is sluggish and actually going in the wrong direction. Truth is, both profits and Gross National Product are increasing -- just not increasing as fast as it once did. Savvy retailers must be prepared to look ahead at the coming opportunities by gearing up for the economic upturn.
U.S. Treasury Secretary Paul O'Neill said he expects the GNP to grow by up to four percent in 2003, and although not growing as fast as it did in the late 1990s, the economy continues to grow. The Dow Jones broke the 9,000 barrier and consumer confidence, although volatile, is showing signs of kicking back into gear. A cautious consumer optimism combined with summertime buying is either the perfect mix for cyclical sales joy or cyclical distribution nightmares ? depending on how prepared businesses are to respond to consumer demand.
"With current levels of consumer demand, businesses are carrying more inventory, which is certainly taxing upon their operations," Forte Industries marketing director Rodger Roeser said. "Many businesses have laid off workers in an effort to mitigate the effects of higher costs and lower demand. But, the strategic operations leaders have the ability to seamlessly respond to the ups and downs in demand because they understand how competitive and how critical a powerful distribution operation is --without missing a beat and without laying off workers. Proactively managing this 'demand response' will allow suppliers to succeed."
Roeser explained that the competitive landscape that exists among suppliers, with the retail outlets and big box stores holding a dominant market position because they have the golden combination of shelf space and consumers, will lead to the tremendous success of some retailers and the utter failure of others. It is the organizations that provide products to the big box stores in the most efficient, compliant, timely and accurate manner that will win coveted shelf space and ultimately increase market share.
"Those that are not prepared or have highly labor intensive practices will find profit margins continuing to decrease," Roeser said. "The big box stores will continue to impose more upon their suppliers, and if the processes are not up to snuff, the stores will simply look to other suppliers who can provide what they want, when they want it, and in the manner they prefer."
Forte Industries is a nationally recognized B2B supply chain distribution operations improvement firm. More information can be accessed at www.forte-industries.com.
