The Faceless Crime – Not So Anymore.

June 28, 2011

It has been an interesting week – living as I do in Vancouver. The city that so many of us love and respect turned ugly and a disgusting element of society felt the need to expose themselves (some literally) to the raucous onlookers and “lookie-lous”.  And for no other reason…a disappointing finish to an amazing run of hockey and sportsmanship.

As the week progressed the people of Vancouver have risen and proven themselves resilient and true humanitarians. They have come out in droves to clean, fix, disparage the idiots and support the organizations that were damaged on the infamous night.

For all the burning, the taunting and lunacy that escalated during the evening, one of the most disturbing series of events for me, a self-proclaimed retail junkie, was watching the looting and destruction of retail stores that just happen to be on the path of the rioters. When did destroying someone’s livelihood become cool?  Why is stealing OK? What possesses you to take a “souvenir” and think there is nothing wrong with these actions?  [Check out this student who stole from a shop because she was caught up in the moment and then isn’t particularly contrite about her apology! Read more ]

The downtown merchants affected for many are nameless, faceless corporations – big behemoths. The reality is far different. Of course there are large companies like The Bay, London Drugs, and BMO that were severely damaged but victims also included local coffee shops, family restaurants and mom & pop convenience stores. All the stores were affected – big or small. They all have to rebuild. They will have costs that are not covered. Lost revenue and sales. Their employees have been affected. Some of them have even had their reputations harmed by their own employees. And all of them will live with the impact of selfish and cowardly acts for much longer than the rest of us.

Looting is a violent and cataclysmic display of a cowardly crime. Unfortunately, shoplifting (the basis of looting) continues to increase around the world and will not abate until people recognize that there are people and families behind every retail venture – large or small. I hope that these hooligans are brought to justice and are made to understand and pay for their crimes.  Despite seeing the humanity and goodness arise through all of this, I adamantly hope that I never experience this debasement again.

VPD car covered in love. Messages of support.

Has the Well Run Dry?

March 23, 2011

It has become clear as they say – the jig is up and the well has run dry. Retailers and brand owners who have taught their customers to continue to expect lower prices; who have commoditized the market and idealistically believed they could discount and sell more while maintaining profit margins. Sales volume has not grown profit dollars and now the dependence, dare I say addiction to low cost sourcing may just have run its course.

For years buyers have sourced products from the world markets but the low prices, consolidated manufacturing base and availability of resources has lead most on the yellow brick road to China. Intrinsically we all knew the day would come when costs would usurp the value of buying from these sources; we could see it on the horizon but we didn’t want to believe it. Commodities and costs have risen before and retailers and ultimately consumers continued to buy and stomached the increases. So why will 2011 be different?

As Auret van Heerden, CEO of the Fair Labor Association said “Labor markets which we previously thought were inexhaustible, like China and India, have actually tightened up quite dramatically. Employers can’t get workers. Wages have gone up. Add to that the energy cost increases, and the factories, the contract manufacturers, are now suddenly squeezed. So they’re turning around to their buyers – to the retailers or the brands – and they’re saying, ‘Hey, my prices need to go up.’ And the brands are saying, ‘Whoa! We don’t think we can pass those prices on to the consumer.’ There’s something of a train smash looming.”

Labor shortages and material costs are two of the very visible issues facing buyers seeking low priced goods from China. Potentially an even more profound challenge will be the rising internal demand of the ever growing Chinese middle class – a market that is projected to exceed the total population of the United States of America by 2015.  As the middle class market continues to grow China’s GDP is rapidly turning inward creating challenges to global companies seeking to secure goods.

New countries will emerge as potential sources of supply as we have seen the growth in export commodities from countries like Vietnam and Bangladesh. But the reality is that untapped manufacturing markets are limited and soon buyers will have to face the ferryman and then… it may be that that fickle temptress of low cost sourcing will exact her due.

Welcome to Vietnam

March 14, 2011

At vLinx, our technology is designed to support the sourcing efforts for international buyers. The technology can help move information and make the process more efficient but one of the most important aspects of sourcing is knowing how and where to buy the goods.  Understanding – the culture and demographics – is critical to successfully broadening a base of supply.

Traditional manufacturing bases change, new sources emerge.

Vietnam is a country that has undergone significant renewal since its entry into the WTO. New products, diversified manufacturing and a skilled workforce have turned Vietnam into an exciting and enticing country from which to source goods.

Physically, Vietnam is a strip of land shaped like the letter “S”. China borders it to the north, Laos and Cambodia to the west and the South China Sea to the east. Although Vietnam is known for holding the longest war of our time, this former French colony holds some secret hidden gems. Vietnam is currently the world leader in export of goods such as peppers and cashew nuts. Fruit, shoes, and furniture are some of the growing businesses in Vietnam.

One of the most important things about doing business in Vietnam is knowing the people – how you address individuals; business meeting rituals; common misconceptions.  All of these aspects are important to creating strong and meaningful business relationships and long term partnerships.

To view our complete country profile on Vietnam, click here.

Remember, if you get a chance to visit Vietnam a great culturally significant city to see is Hue. And don’t forget to try some Pho from one of the many vendors!

The Dawn of a New Era

March 7, 2011

In the wake of the Egyptian, Libyan and Tunisian turmoil, the world has been enlightened on the power and effectiveness of social media. The awe inspiring capacity of the people; the voices and the emotions, camaraderie and ultimately the dynamism and energy that was evoked from a tweet, a post, a conversation.

The fierce power of voice – has shown leaders and countries that citizen engagement is a critical component of the new world order. But what do you do if you are the leaders of one of the most closed and censored countries? If you both seek economic supremacy on one hand and global political acceptance on the other; all the while your rankings on the global human rights lists are heading in the wrong direction. Do you tighten the grip? Do you close the access points? Has the time arrived to allow voices to be heard? Opinions to be debated? True open access to the conversations being held around the world.

The leaders in China must be struggling with this dilemma. Business and industry want and know that they must continue to use current technologies and processes to remain competitive and to achieve equal economic footing amongst the world leaders. The government, with all of its might, must do all they can do to support the growth, for they must meet or exceed the country’s demanding growth plans to keep the Chinese economy at the forefront of economic growth.  It is the yin and yang; growth, international competitiveness, innovation or be the followers.

Will personal economic growth and success limit the potential political and emotional upheaval? Can the government of China ignore the dissent and dissatisfaction of business and industry leaders who are underachieving or at a disadvantage as a result of government polices? Can China afford not to join the world’s conversation and allow social media to be the catalyst for change and growth?

In the world of global sourcing and the ever increasing search for secure business operations and partners, this precipice on which China sits is critical.  A quote by Michael Schrage tells the tale, “China’s efforts to retain authoritarian control over its internet evolution increasingly — and inherently — conflict with its professed business, economic and educational need to raise living standards and grow. No great leap forward is required to realize that the same economic empowerment business net services like LinkedIn provide can seamlessly become tools for political exchange, as well. The Internet demonstrably dissolves once-meaningful distinctions between political and economic self-expression. Arguments about whether societies can have the benefits of economic freedom without the burdens of political freedom date back before Adam Smith. But what’s becoming inarguable is that the more economies use digital platforms to generate greater innovation and choice, the easier introducing political discussions around opportunity and accountability becomes…The irony for Western business is that a freer China is almost certain to be a more effective economic competitor than one held back by authoritarian fears. For China’s leadership, the irony is that the technology most likely to empower and accelerate economic growth effectively requires it to become less authoritarian.”

We wait.

2011 – The Precipice of Change

January 4, 2011

The crystal balls have been worked over. The Magic 8 ball tossed and the predictions are flying – will 2011 bring us renewed prosperity? Increased sales? A strong and stable economic stage on which to play? Or will the “Double Dip” catch us as we are climbing out of the trenches congratulating ourselves on our survival…dare I say victory?

For companies that are actively sourcing products and procuring goods on a global basis, there are a few truisms that I think will reign in 2011.

Costs Will Rise:

Without a doubt, manufacturers will be facing commodity increases – oil is forecasted to be over $100/barrel; Raw material prices have been steadily creeping up; Cotton prices are 80% higher than last year – all of which lead to higher costs for buyers. Chinese manufacturers, particularly, will have secondary pressures from their workforce as the cost of living continues to rise and the Chinese populous demands their wages keep pace.  These dual forces will not allow for manufacturers to absorb the increasing costs and they will push the increases to the buyers.

Relationships Will be Tested:

Interestingly enough, the price pressure will create a fissure in the traditional manufacturer – retailer relationship. Retailers and buyers have traditionally wielded their power and defrayed rising costs to the supplier network. However, in 2010, this battle intensified and manufacturers and suppliers have begun to push back. Manufacturers are selling directly to the consumer at an increasing rate around the world. Suppliers and manufacturers are leveraging their power of supply and refusing shipment as a course of their negotiations. This is a relatively new phenomenon and will cause partners to re-evaluate and prioritize the elements that are important in their relationships.

Emerging Nations Will Compete:

Global sourcing has typically meant buying from China, however 2011 will bring emerging nations to the forefront and “early adaptors” will spearhead the quest for new partners and sources. Vietnam, Bangladesh, Indonesia, Turkey, and Brazil are just a few of the countries that are developing industries, infrastructure and support networks to support global business. Buying from sources that are not as well developed as the traditional sources of supply is fraught with risks. There will be issues. And without a doubt, nerves will be frayed but the rewards for those that are willing to try should be significant.

Information is King:

Regulations will continue to tighten and moving goods from around the globe will continue to be challenging. To meet the growing demand for visibility and paperwork in advance, access to timely and accurate information will continue to be one of the most critical elements of the supply chain. Collaborative, web-based systems provide the most efficient vehicle to support the ever growing needs.

2011 is here – there is no turning back – and why would you want to?! The adventure and the challenges, the successes and failures are what allow us to learn and grow. Armed with the knowledge to challenge the conventional, I think we are on the precipice of an exciting and revolutionary time. Good luck in 2011 – may your business flourish.

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