Go West, Young Man!

Originally advice given by American author Horace Greely in the 19th century, this could well be applied to 21st century sourcing strategy as Chinese manufacturing wages rise and its 30-year position as a low cost supplier look to be coming to an end.

Although China remains an important supplier for many UK retailers Ben Cooper reported that half of 28 retail executives interviewed are now sourcing from alternative markets and even more significantly only two expect to be sourcing more from China in the near future.

So what are the main reasons for this and which countries are emerging to take China's place?

Huge increases in labour costs of up to 15% year on year. In fact it is anticipated by Boston Consulting that China's manufacturing cost advantage over the US will disappear by 2015.

The working age population is declining. The Financial Times reports that by the end of 2012 the population aged between 15 and 59 was 937.27m. A decrease of 3.45m from 2011 according to figures released by China's National Bureau of Statistics.

For the first time in 2013 the Chinese renminbi (yuan) became one of the top-10 most traded currencies and has reached record levels of value relative to other currencies making importing from China more expensive. In addition to this Chinese manufacturers are more often imposing high minimum order quantities.

Some retailers have experienced a degree of unreliability from Chinese suppliers due to the increasing mobility of the workforce and the seeming lottery of the "will they or won't they come back after Chinese New Year".

Zara is well known for having one of the very best supply chain models in the fashion world and where do they manufacture? Two thirds of their production is from Africa and Europe.

A new study from Stratfor Global Intelligence has identified a "Post-China 16" that includes four African countries as well as Mexico, Peru and Indonesia. Europe offers shorter lead times and lower minimum order quantities, which combined with reduced freight costs is good news for net profitability.

What next? A return of UK manufacturing? Fingers crossed, young man!

Written by Erica Vilkauls: JEM Retail Consultants

Flying High Between Contracts

While being a consultant gives me the opportunity to work with a variety of interesting people on exciting change programmes, gaps between contracts are an occupational hazard. Oscar Wilde said "a break from employment is not a holiday" and on this occasion I decided to do something more constructive with my break than play tennis and chase the next assignment.

Looking back on it now I was foolish not to have flown off to some exotic destination the moment my last contract ended, isn't hindsight a wonderful thing? Instead I have filled my time with various, mainly none paying, projects that have gradually grown to the point that I find myself "working" at something or other 7 days a week. So now my situation will move from working all the time whilst unemployed, to working in full time employment without ever having the holiday on an exotic beach in between!

So what am I busy with I hear you ask? Well I will tell you about one of those projects and if this blog gets enough hits to keep Mike happy and off my back for a couple of days, then I will write about another one.

Concorde was one of the most beautiful and iconic aircraft ever built. It was also one of the most exclusive with just 20 being made between 1966 and 1979 and only 14 of them ever entering commercial service with BA and Air France.

October 24th this year marks the 10th anniversary of the last commercial flight by Concorde when 3 flights landed at Heathrow within 5 minutes of each other to "cheers and tears" according to Joan Collins who was on the last of them arriving at 16:05. The last flight ever was on November 26th 2003 when Concorde was flown from Heathrow to its birth place at Filton Airfield near Bristol carrying 100 BA staff.

After more than 250,000 hours of flight time Concorde had come home.

But I am starting to sound like Wikipedia. The point of this is that a friend of mine has a source of Concorde memorabilia including some stunning fine art prints signed by Concorde pilots and stylishly framed with the unusual addition of an authenticated seat belt. As you can imagine these products have extremely limited availability making them very collectable and my friend wanted to market them to coincide with the forthcoming anniversaries. Unfortunately he didn't have the time, which is where I came in.

Going with a website was the obvious thing to do and Sara at Creative Remedy, who built the website for JEM Retail Consultants, was on hand to help. What was less straightforward was settling on a price point that will provide the required margin and return on investment but not put off the customer. As these are unique items there was really nothing to go on.

Then there was trying to estimate the demand. The exclusivity is a great selling point for the prospective buyer but could be a stock availability nightmare for us. There is no planning system here full of 2-years sales history. There is no tried and tested customer profile. The largest task of all is the search for the potential customer base and finding ways of drawing them onto the website.

I think even my trusted colleague Erica would forgive me for resorting to a spreadsheet if, in fact, that would even help. What will the take up be? Will 2 of us have the capacity to fulfil the orders? Will our supply chain be fast and robust enough to meet sales? Do we need to source more products? Other products? We discuss and debate all of these questions; we then stick our fingers in the air and grab numbers out of the sky. Hopefully that doesn't sound like your planning system. Or does it?

Kidding apart I am excited about the venture. The website will go live on Tuesday 24th September when I will send out a quick update to let you know the details and keep you informed of its progress, hopefully success and the performance of our planning and merchandising system!

Written by Jane Fransen-Hale: JEM Retail Consultants.

Making an Exhibition of Ourselves!

First venture into taking an exhibition stand for our newly formed consultancy.

Between us my colleagues and I at JEM Retail Consultants have over 100 years of experience gained with 20 retail organisations but as individuals have normally gained new contracts via fairly conventional routes – usually our personal networks or through agencies.

Although we have now worked together on 4 separate occasions this is our first experience of trying to find a contract as a Consultancy and we felt that we needed to market our services at an exhibition in order to make some new contacts and promote the services we can offer.

So where to go?
The first opportunity we chose was the Retail Week Technology Summit being held in London on the 25th / 26th September 2013. This was partly influenced by helping to win the Supply Chain Excellence Award hosted by Retail Week but we chose it mostly because it will be attended by part of our target audience: CIO’s and IT Directors from top retailers.

Retail Week Technology Summit: www.retailtechsummit.com

Next was the Retail Business Technology Expo being held at Earl’s Court on the 11th / 12th March 2014. This is expected to attract over 9,000 visitors taking advantage of the 300 exhibition stands and the networking opportunities that will be provided.

Great! Decision made but what else do we need? The most obvious thing was a display stand and fortunately Sara from Creative Remedy who developed our website for us was on hand to do the design drawing from the branding she created for the web. Next were pens, packets of mints and printed brochures.

I think it is fair to say that this has taken rather more organising than I had anticipated when we started but we are looking forward to the experience and the opportunity to make new contacts.

We would certainly be interested to hear from anyone who has experience of exhibiting at this type of event, particularly if there are any other venues they would suggest.


Written by Mike Gamble: www.jemconsultants.co.uk