The Dreaded Season

I do not know about you but I do not look forward to this time
of year. Don’t get me wrong, it is not the fall or football
season or even the upcoming holiday season I dread. It is the
annual budgeting season for next year. It is the time of year when
we try to predict the future of next year by looking at the past.
Though it has been a long time since my college days I do remember
one thing from my Logic Class, that there is no such thing as a
perfect analogy, it does seem sort of like driving a car by looking
in the rear view mirror though. The biggest challenge this year is
how can someone predict next year based on what is happening around
us.

With revenues coming to a grinding halt or modest growth at best,
the focus on bottom line EBITDA and improving efficiencies is the
new mantra. Never mind that cash is king. So what does this mean
for the manufacturing sector and the associated technology that
goes along with it? How did we get here? Whatever happened to our
Corporate Risk Management Scorecards? Our Business Intelligence
dashboards or even our Enterprise Manufacturing Intelligence
solutions? I almost forgot, according to industry analysts these
solutions are still emerging and being adopted. Maybe the concept
of proactive or leading measures truly are what we needed to
foresee this coming a little sooner and could have made us react a
little quicker. Could be food for thought for next year’s
investments.

Though hindsight is 20/20, what does the budget look like for next
year? Do we focus on core competencies and look to outsource
specific business process to more cost-effective regions? Sounds
like a good idea but then how will we mitigate the risk of ensuring
product quality, customer services, on-time delivery, and even
regulatory compliance in certain instances? We could turn to the
plethora of portal and collaboration hub technologies to assist in
the process while at the same time supporting the event management
logic and associated web-content to inform us when thing go fine or
when action is needed. With the growth of mobility applications
being adopted for pricing, operational, customer and supplier data
we are always connected. 

This new found global connectivity with instant access to the
global financial trading markets and the impact on the U.S. dollar
to foreign currency valuations brings to mind the associated budget
line items associated with energy costs. Let’s see, two
months ago, oil was trading at more than $140 a barrel and now it
has dropped over 60 percent to under $60 a barrel. Are we going to
be as environmentally conscious now that we can load up our fleet
of trucks or are we still going to look at optimization solutions
that minimize fuel costs against delivery performance levels. Maybe
we should look at improving the bottom line in our warehouse and
transportation execution processes and technology solutions in the
near term and put off the optimization until things calm down.
Seems a crazy eight ball is needed here to allocate that line
item.

I suppose it all comes back to managing risks. Managing that fine
balance between establishing priorities of projects with varying
risk and reward metrics. Now that market is growing very well due
to growing regulations and some common sense actually. The key
caution is not to feed these programs with overly optimistic
assumptions and to feed them oversimplified data. This will enable
the alarm to be sounded in a much more pragmatic manner, if done
correctly.

So how does the ship look next year for you? I suppose it is easier
to steer a moving ship then get one started in the first place. So
if change is good, there is plenty ahead on the horizon.