Browsing: Value

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There is no doubt that spending on services is climbing and climbing at a rapid pace. Most organizations have recognized this and have been trying to get a handle on this critical area. MSPs and the various software solutions out there are a clear example of that. While most of these efforts are very admirable and do a decent job of helping you manage this area, they still fall woefully short. And the reason is that they are only focused on one aspect of the entire conundrum.

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Unless it’s a special night, you’re probably picking chicken because who can afford lobster all the time? Actually, you can since the price of lobster has dropped from $6/lb (1995) to $2/lb (2013) but you would never know it from restaurant or grocery store prices. Because they know that if they drop the prices, the experience (and therefore demand) of eating lobster will diminish, which is counter intuitive as you would think the demand would rise as prices fall.

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Materials managers, buyers, transportation coordinators, category managers, product engineers, suppliers, quality controllers, etc. all make up this mysterious world of Supply Chain. If you look at that list and think that one role is more important or more critical than another, then think again. Would it surprise you to learn that a 57 – cent part may have been the cause of GM’s recall crisis?

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I read an article yesterday in Crain’s Chicago Business entitled “America’s Ever-Shrinking Middle Market” where the author Joe Cahill explains that large companies and long-standing brands like McDonald’s, Sears and J.C. Penney are struggling as “ . . . nimbler new competitors are picking off customers.” This is where my story begins . . .

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Who remembers the summer of 2011 when Netflix, Inc. raised its prices by 60% (“Netflix raises price of DVD and Online Movies Package by 60%” NY times 7.12.11) and lost almost one million customers? Fast forward to October 22, 2013 where Netflix reported adding 1.3 million U.S. customers just in the third quarter ( “Subscribers Fuel Netflix Stock” – WSJ) to eke out HBO by one million subscribers. In addition, its stock price is up 282% since the beginning of the year. How did they do it?

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“WOW” was the reaction from the National Consumer Law Center to the news that major utilities in Massachusetts would be buying wind-generated electricity at less than 8¢/kwh (kilowatt hour). The reaction from the business world (and the biggest electricity users in Massachusetts) was summed up…

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