SME’s need to adapt or die

Being a supplier to FMCG retailers is really, really hard. The two gorillas are demanding, unreasonable, and often just plain stupid, at least that is a suppliers assessment. If you asked the retailers, they would just be doing their jobs, maximising the revenue and margin returns from their shelf-space, minimising their costs, and competing aggressively for access to the consumers wallets.

It is just a matter of perspective, but whilst the customer is not always right, they remain the customer, and if you want to serve them, it is you, the supplier who must adapt or die.

The current pressures on SME food industry manufacturers, a high $A, the retailers push into housebrands, difficulties in funding working capital, skills shortages particularly in regional areas where many of them are situated, and promotional costs, are pushing many to the wall. The long term impact of these changes appear to be all bad for the economy, as food security, balance of payments, regional jobs and skills,  and having a manufacturing base from which to innovate, are all compromised. However, there is  not much joy in complaining, clearly the various governments do not care, or are more engaged in important debates like gay marriage, and spending our money on sectional interests who seem to have a few votes, so we have to address the problems ourselves.

Manufacturing, let alone food industry manufacturing no longer even warrants a seat around the cabinet table, clearly we are on our own, so we adapt or die, and many will die, the few who successfully adapt will be very good indeed.

 

 

About strategyaudit

StrategyAudit is a boutique strategy and marketing consultancy concentrating on the challenges of the medium sized manufacturing businesses that make up the backbone of our economy. The particular focus is on their strategic and marketing development. as well as the business and operational efficiency improvements necessary for day to day commercial survival. We not only give advice, we go down "into the weeds" to ensure and enable implementation.
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2 Responses to SME’s need to adapt or die

  1. Pingback: Lean accounting. An SME manufacturing lifeline? | Strategyaudit

  2. Pingback: Death of an “Iconic” brand « Strategyaudit

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