Innovate or die? - the brink of a revolution
January 10, 2009 by david.evanson
I’ve just been reading an article in the Food Manufacturer (Rick Pendrous, 02/01/09) in which he claims that supermarkets such as Tesco are allegedly seeking as much as a 5% price drop off products such as ready meals and other core products.
The article states “Tesco are very demanding,” said one chilled food supplier that was asked to cut its prices. “We will end up very wounded indeed.”
Are you reading this and thinking similarly? Perhaps you are already being challenged on your costs and have made the first step of laying off your temporary labour, but still being requested to hit targets and improve efficiencies. If this is the case then news that the supermarkets are going to be challenging your sales teams for further price cuts….which you are likely to be requested to deliver.
In my opinion this leaves many manufacturers with a choice: Innovate (And improve). Or die.
In my belief this environment could well lead UK manufacturing into a new era of innovation. Over the next 12-36 months i believe we will some of the things we will experience are:
- Greater demands for output
- Greater constraints on labour costs
- Greater focus on ROI
- Pressure from retaillers to drop cost
- Greater constraints on capital expenditure
Resulting in:
- Any sites that act too slowely will be shut
- Any sites that choose not to act will be shut
- Major changes for the sites that want to survive
If you want to survive expect:
- Change. Lots and lots of change
- A resurgence in lean and CI implementation
- More continuous improvement projects being implemented
- Greater focus on KPI’s and numerical performance
- Greater emphasis on improvement
- Individuals held more accountable for delivering change rather than just ‘doing the day job’
- People management skills will be at a premium
- Your site will introduce improvement projects with greater emphasis on internal team delivery
- To be involved with consultants and CI experts to support projects
If you’re slow adopting these changes my belief is that times will get very difficult…and you may not last the year, or even the next 6 months.
Many of us will have heard of “The Toyota Way” of production, when will you start to create “Your way”, and what will it contain?
The end result? I believe we are on the brink of a CI revolution in the UK. I believe that over the next 3 years we may well witness if not some new techniques, then some new ways of applying age-old techniques. I can’t wait to be involved!!!
