Xuhua is a dropout from UCLA (PhD program) and has caused Lumber Liquidator’s (“LL”) to drop 2/3 – YES, 2/3 of its market cap (from $3bn to $1 bn) within a year! He noticed a significant increase in their profitability compared to the industry, and in investigating why,…
I was recently invited to speak to the Board of FSMA on an issue that has them totally perplexed. FSMA is an organization of large food manufacturers and their agents which has been experiencing the following: longer sales cycles, lower margins, demand for additional services, challenges to prove their value add, etc., etc. And lo and behold – they thought they had found what was causing them all this angst – it was this new thing called Category Management (CM). For those of you not familiar with the retail sector, this is an integrated process to manage the entire lifecycle of a category of consumer goods. What it is not, is the category management (cm) process that people in sourcing and supply chain use. And this is where the confusion and tension arises.
In a recent posting on Business Week, I had written about the dynamic nature of outsourcing strategies and why companies must develop an exit decision model and an exit strategy concurrently when they first decide to outsource(offshore). The GM decision to insource their IT function, which had been 90% outsourced, might be a perfect example of that concept. They are currently looking for 10,000 IT professionals!!