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Thursday, March 4, 2010
Protect your brand through controlling your Supply Chain
Over the last month, Toyota’s brand has taken a big hit. It’s February sales in the US moved to 3rd place behind Ford, and GM. Who would have believed such situation just 6 months ago? Apple late last week had to admit some of its contract manufacturers were using child labour in the making of iPhones and iPods. There quick admittance probably saved their brand.
Both those examples demonstrate the importance of understanding what happens throughout your supply chain (and I use the term here in the widest sense, from raw material to end customer).
Combining three initiatives helps addressing the risk of brand damage. These are gaining an in-depth understanding of the Supply Chain, understand what the market is saying and supply chain audits/controls. Let me develop each of those in some more details.
We have already talked about how we could gain a better understanding of the Supply Chain. First we need to gain an understanding of the topology of the supply chain. Who are the companies participating. Tier 1 partners are easy, but it is moving up the tiers that become increasingly complex. But that’s where the danger may come from. In the Mattel case from a couple years ago, the problem was not a supplier, nor a supplier of a supplier, but a tier 4 supplier. Unfortunately, as the products were branded Mattel, they took the hit. Once the community is understood, one may want to put information sharing, communication and collaboration tools in place to facilitate the transfer of information at all levels. Obviously this requires collaborative suppliers and trust. Using a business exchange or cloud computing based solutions the collaborative network can be monitored and potential issues and strange behaviours identified.
Understanding what the market is saying would have helped Toyota understand their issues earlier.A vast amount of information is communicated on the internet and on social networking site, that it becomes mandatory for a company to monitor what happens. But to my greatest amazement, many well known brands don’t do this. I would start with three very simple steps. First, I would create a Google Alert with the name of the brand. This would provide me with a daily report of what is being said on the internet and in the blogosphere. I would make somebody responsible to read what is being said and look for potential clues. Second, I would create a Twitter and Facebook account. Besides being a mechanism to communicate with customers, I would also look at what they tell me. In Twitter in particular, I would closely monitor the #Brand tag to see what people say. In Facebook, I’d look for “friends”, and see what they tell me. And third I would search for forums on my brand or my products, subscribe to those (with an RSS feed to ensure I am not missing anything) and then listen and interact. Many customers are dying to tell something, why not encourage that dialogue.HP for example spotted a contrast issue with the camera of their TouchSmart when a YouTube video treating them as racists, turned up on Twitter. They very quickly intervened and addressed the problem.
But not everything can be addressed through remote monitoring. You need to go and see for yourself. And that is where audits and controls are playing a role. Many companies have a supplier code of conduct, describing what the suppliers may or may not do. Some of those requirements are not obvious for suppliers as it differs from their cultural heritage, so making them understand the importance of the requirement and why it is there is key. And then, doing actual controls (planned and unplanned), helps identify issues. The Apple example is a good one here. It is during one of those controls they found out. Now we talked about the tiers of suppliers. You may want to work with the tier 1 suppliers to have them auditing tier 2 etc. But here again, as your brand is on the product, you want to make absolutely sure the audits are performed seriously and completely. Maintaining the results and identifying the suppliers that are borderline helps you focus on the weak links in your supply chain.
Last but not least, dialogue with your suppliers and ask them where things can be improved. You will be astonished about the quality of the information that comes back, and I’m sure you will implement some ideas straight away. Collaborating with your supply chain, listen to suppliers and customers and continuously analysing what is happening are a great insurance to avoid trouble. Because the last thing you want is your brand name with bad news printed on the front page of the main publications. Take the necessary precautions ahead of time.
4 Tips for Buying the Best Running Shoes
Before you hit the road to run, make sure your feet are covered with the best running shoes for YOU. Your running shoes are the only thing separating your feet from the asphalt, so it is important that you take the time to get the right pair for your feet.
Not only can the wrong shoes or worn down shoes expose your feet to the elements, they could cause unnecessary soreness or injury as well.
Every pair and every brand can feel different to each individual, so make sure you choose the right shoe for your specific needs. Here are 4 tips that will help you find the best running shoes you’ve ever worn!
Before you buy, ask yourself the following questions:
- How old are your current running shoes? If you cannot remember the last time you replaced them, they are too old! You should be able to get about 300-400 miles out of a good pair of shoes. Write down the date you get your new shoes and keep track of the approximate weekly running mileage so that you will know when they need to be replaced.
- How did you pick out the pair that you are wearing? You should buy your shoes from a specialty store that focuses on running gear. A good store will take the time to watch you run, either in-store or on a treadmill, and then suggest several pairs for your foot strike. Your foot might land differently than your running partner’s, so don’t just get the pair of shoes your buddy recommends. Go and have your form evaluated by a trained professional and get the right pair for you.
- Where will you be running? If you are a trail runner, you should buy a shoe specifically made for running on trails. The same goes for street running. Each shoe is designed with a specific purpose, make sure you get the right kind.
- How much can you afford to spend? You can get a quality shoe for less, but do not expect to pay less than $60. Quality running shoes will absorb the majority of the ground impact when you are running which will help keep your feet, shins, and knees happy. Once you are fitted with a great pair of running shoes, preserve them by only using them when running.
Now that your feet are covered, go out and enjoy your run!
What brand of running shoes are you currently wearing?
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Tuesday, March 2, 2010
The Toyota Witch Hunt
As everyone is no doubt aware, Toyota has recently recalled over 2 million vehicles for an issue with gas pedals and 3.8 million vehicles over floor mats. Toyota’s CEO, Akio Toyoda, was also called to Washington for questioning over the recalls. It has been all over the media; a very high profile issue for Toyota which prides itself on safety.
But there’s something that doesn’t seem right: why is Toyota getting so much attention for this? In October 2009, Ford had to recall 4.5 million vehicles due to the fact that they could catch fire (faulty cruise control switches). This recall is linked to 550 separate incidents and it’s not a new problem; Ford, over the past decade, has recalled over 14 million vehicles in 8 separate recalls related to cruise control switches catching fire. Since 2008 alone, Ford has recalled over 14 million vehicles for various issues. But the media mentions next to nothing about Ford’s safety problems and recalls.
Where are the congressional hearings for Ford? It’s quite clear that Ford has a problem with cruise control switches and the results aren’t pretty. But a few floor mats and (made in USA) pedals in Toyotas and we have a media storm.
Of course, the US Government owns a large portion of American car companies and also happen to now be a good source of bad press for Toyota. An opportunity has arisen! Coincidence? Your call.
US General Motors recalls, blames Toyota!
American car manufacturer General Motors, resurrected by a government bailout after going broke, is recalling 1.3 million cars in North America because of a power steering problem, which has been linked to more than a dozen crashes. Four models were affected – the Chevrolet Cobalt, Pontiac G5, Pontiac Pursuit and Pontiac 4.
The company said the fault meant that at low speeds “greater steering effort may be required”, but that the cars could still be “safely controlled”.
General Motors was quick to blame the fault on a supplier partially owned by the Japanese car giant Toyota. GM’s vice-chairman Bob Lutz told the BBC at the Geneva Motor show: “This is a case where, yes, we would blame a partially Toyota-owned supplier.” Lutz said the supplier had not met “all requirements for reliability and durability”.
“So we will have to see who takes financial responsibility,” he said. “But this is a risk you sometimes take when you buy a complete system from a supplier.”
Astonishing!
Here is a US firm that almost died because it made poor quality, very inefficient and expensive cars for decades and was then resurrected by the federal government. Within months, GM is claiming to be the champion of quality and blaming Toyota. Is it an act of revenge or part of America’s economic war against Japan?
We should bear in mind that the new government, led by the Democratic Party of Japan, wants to loosen its alliance with Washington. Prime Minister Yukio Hatoyama advocates a policy of detachment from America and its foreign conflicts, while repairing relations with neighboring countries. For example, Japan ended its naval refueling mission in the Indian Ocean that had supported the US-led war in Afghanistan since 2001.
Monday, March 1, 2010
Toyota Finally does the Right Thing and Apologizes
Yesterday was an oppotunity for me to do something which doesn’t happen enough, read the Sunday paper cover to cover. Whilst I was a little cheesed off that Morrison’s apparently doesn’t stock the Observer at its petrol stations, my second choice, The Indy was available.
Whilst slowly digesting the paper, there were many things to comment upon:
The reported cuts to the Tory lead, a storm in a tea-cup really given every other poll has had them on 6% all week (apart from a Ipsos which said 5% on friday).
The fact that the Olympics are apparently going to come in under budget, an absurd suggestion given that the original budget was forecast at £2.4bn and it is now expected to be between £8.8 and £8.9 billion.
But no, the thing which most caught my eye, perversely, was an advert. A full-page Toyota advert to be specific.
Now everyone will know of the troubles facing Toyota recently and I would be lying if I said that they hadn’t brought any of it on themselves. The Director has already admitted many of the recalls are the result of too fast and aggressive expansion, however, this is not what I want to take issue with.
Toyota have recently recalled millions of their cars
A few weeks ago I was asked (as part of an application form) to analyse what I thought was one of the worst PR failures of 2009, this is what I wrote:
“Toyota, have had a few years of massive ups and downs in terms of their public relations. Over the last half decade they have built up a strong reputation for creating good, environmentally friendly cars. They did this through good advertising and wide media coverage and reviews, as well as encouraging prestige names to drive their cars. With some of the world’s top celebrities endorsing the Toyota Prius as a good but environmentally friendly car, the public’s perception of Toyota was extremely positive. All of this strong brand building and the trusting relationship between the consumer and Toyota was washed away in one swoop in 2009 when Toyota dithered in announcing a recall of millions of its cars which it feared may have technical difficulties.
Whilst being in the situation of having to recall cars was never going to be a positive development for Toyota’s image, it could have been handled much more effectively so to limit the damage done to the companies long-term reputation. Toyota’s phased recall decision, announcing, one at a time, the different models of its cars which were to be withdrawn was a mistake. Even today it is widely believed that tomorrow Toyota intend to recall some of its flagship Prius range. The problem Toyota have created for themselves is that they have prolonged the story. Every time there is a new model recalled it is front page news, serving to remind the public of Toyota’s unreliability. In addition to this there has been very little in the way of a defence of Toyota’s decision. If Toyota really wanted to improve their PR situation I would have encouraged making the point that they are recalling these cars as a precaution and that they didn’t expect many, if any, of the cars to be dangerous, but were withdrawing them because the safety of their customers was paramount. Whilst this may not have stopped all damage to Toyota’s reputation it would have greatly improved the situation which we see now with anyone with any make of Toyota car wondering whether or not it is safe to drive. Unfortunately for them, however, Toyota decided to hide in the bunker and not to address the concerns of the media or of their customers, and for this, their hard-earned reputation now lies in tatters.”
Toyota apologizes for the Recalls
Today I was happy to see that Toyota had finally accepted that they needed to make a mends with their customers and to apologise for the massive failings on their behalf. In all honest they deserve quite a bit of credit, firstly for doing so (even if it is a few months too late) and also for resisting the urge to dress it up instead of dealing with the issues themselves. Whilst not the sexiest advert in the world by a long shot, Toyota have gone a long way in redeeming themselves in my opinion after seeing this apology.
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