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by John Mehrmann
Navigating Economic Challenges
Charting a Course for Survival and Prosperity
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How did we get here?Global Community – Global Marketplace
• How did we get here?• How long will it last?• What should I expect?• What can I do about it?
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A History of Home Values
Cause and Effect in our industry
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• Latest quarterly, median, existing, single-family home price provided by the National Association of Realtors. • Trailing house price index data provided by Standard & Poors and the Office of Federal Housing Enterprise Oversight. • Inflation data provided by the U.S. Department of Labor's Bureau of Labor Statistics.
2006
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The Great DepressionOct 1929 - 1940
This chart compares total debt (“credit”) in the U.S. to GDP (Gross Domestic Product) on a percentage basis. Current total credit-market debt stands at more than 340 percent of total GDP.
ChrisMartenson.com
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The Stock Market
18 Month Trend
Ten Year Trend
8A Global Trend
S&P 500
Dow Jones
Germany
London
Hong KongJapan
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Consumer Tendency SurveyConsumer Confidence Indicator
Unemployment Rate
Year Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Annual
1998 4.6 4.6 4.7 4.3 4.4 4.5 4.5 4.5 4.6 4.5 4.4 4.4
1999 4.3 4.4 4.2 4.3 4.2 4.3 4.3 4.2 4.2 4.1 4.1 4.0
2000 4.0 4.1 4.0 3.8 4.0 4.0 4.0 4.1 3.9 3.9 3.9 3.9
2001 4.2 4.2 4.3 4.4 4.3 4.5 4.6 4.9 5.0 5.3 5.5 5.7
2002 5.7 5.7 5.7 5.9 5.8 5.8 5.8 5.7 5.7 5.7 5.9 6.0
2003 5.8 5.9 5.9 6.0 6.1 6.3 6.2 6.1 6.1 6.0 5.8 5.7
2004 5.7 5.6 5.8 5.6 5.6 5.6 5.5 5.4 5.4 5.5 5.4 5.4
2005 5.2 5.4 5.2 5.2 5.1 5.1 5.0 4.9 5.0 5.0 5.0 4.8
2006 4.7 4.8 4.7 4.7 4.7 4.6 4.7 4.7 4.5 4.4 4.5 4.4
2007 4.6 4.5 4.4 4.5 4.5 4.6 4.7 4.7 4.7 4.8 4.7 4.9
2008 4.9 4.8 5.1 5.0 5.5 5.6 5.8 6.2 6.2 6.6 6.8 7.2
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The Domino EffectCause and Effect in a Global Market
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Many theories about how it all started. Many guesses about when it will end.
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The Domino EffectCause and Effect in our industries
Consumer Confidence & External Factors
Retail Sales Decline
Manufacturers Lower Production
Less Demand for Material, Price Drops
Recycling Impact
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Retail Sales ImpactImpact to one is impact to many
Consumer Confidence & External Factors
Retail Sales Decline
Retail DealersAnd Stores
Forward Logistics Freight Carriers
Reverse Logistics Freight Carriers
Product Return Processing Centers
Installation &Field Services
Customer Service
Sales
AdministrationCredit / Finance
VendorsJobs
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Producers adjust to market
Consumer Confidence & External Factors
Retail Sales Decline
Manufacturers Lower Production
Microsoft 11% drop in profitcuts 5,000 jobs*
SonyNet Loss $1.7 billion
cuts 16,000 jobs*
IntelCloses factoriescuts 5,000 jobs*
Nokia46% drop in earnings*
AMD33% revenue decline*
Jones Apparel Group$840 million write downs*
* Feb 2009 Headline News
Manufacturers in many industries react to challenge
GEProfits drop 45% in Q4*
Across all industries, manufacturers react responsibly to economic challenges
Global EconomyConsumer confidence down. Spending “buying” declinesProduction decreases due to lower demand
Less production means fewer jobs, factories close, GDP downLess production also means less demand for material
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Commodity Prices Plummet
Consumer Confidence & External Factors
Retail Sales Decline
Manufacturers Lower Production
Less Demand for Material, Price Drops
Recycling Impact
Copper Aluminum Nickel Tin
Supply and demand.
Eroding Profit
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Where are you in the product and service
supply chain?
Where are your clients & partners
in the supply chain? What are their challenges? What makes them financially secure?
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Now What?This is a wave of economic transition
• Recognize changes in the economic cycle and identify the waves of change coming your way. There are more waves of change coming.
• Watch what is happening to your clients and their cycles. They are your source of revenue.
• This is not a recession or a depression, this is a transition. Make changes and adapt to new conditions.
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A Brave New WorldThe World is Flat, Hot, and Crowded
– The Internet connects business and individuals real time with global resources
– Automation and integration have improved and bypassed consolidation for efficiency
– Communication, data, visibility, ability to effectively collaborate (outsource & partner) have changed dramatically. Have you?
– “Status Quo” is the new “Road Kill”
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Don’t Fool YourselfThreats may be opportunities• Just because you may not have felt the
impact YET does not mean you won’t– Thousands of jobs reduced. What happens to all that
equipment and assets? A threat to reduce service and support, or an opportunity to help companies with excess assets?
– Fewer employees does not mean less work. Can you be the outsource solution for some of those functions and operations at a lower cost?
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Your ClientsCustomer Satisfaction is not good enough
– How are your clients being impacted?– How financially stable are your clients?– What can you do to help them right now?– What are their plans for the future?– How often do you communicate with them?– Are you poised to immediately help new clients if your
competition fails?– How are you using your internal resources to protect
your current sources of revenue?
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Executive LevelLeadership in tough times• Understand the Financial Crisis
– Recognize key indicators for your business
• Monitor Internal Cash Flow– Be in touch and constantly monitoring cash flow within
the organization. What is working?
• Monitor Clients– Communicate effectively with lines of business and all
points of customer contact
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Empower the Sales ForceThe right equipment for your team
– Do you have sufficient training for your sales force? Regulations, processes, technology, and economic factors are changing. Have you educated and prepared your sales force?
– Do you have easy to use and effective CRM, ERP, and tracking tools that are shared between the front line and back office?
– Customer acquisition and maintenance is a responsibility for the whole organization. Does it feel that way in yours?
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Human CapitalYour most valuable asset• Reallocate resources to Revenue sources
– Put your best people on most important programs
• A goldmine of quality candidates available– Are any of them from your company?
• Employee Confidence– Motivate and maintain morale– Communicate frequently and honestly– Reassure personnel with recognition
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How can one person cope?Can you spare 30 Minutes per day?
– 5 Minutes to create an action list for tomorrow– 5 Minutes to review Headline News– 5 Minutes to Review Short Term Projects & Metrics– 5 Minutes to Reflect on Long Term Goals– 5 Minutes to do something for someone else– 5 Minutes to relax and do something for yourself
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Short & Long TermAct now and plan for tomorrow• Short term projects
– Identify short term projects to reduce costs– Assign teams to concentrate on urgent needs and
quick implementation for results
–Long term goals– Align short term projects with long term goals– Invest in infrastructure and new business, watch the
waves of change for future growth
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Short Term ImprovementsClose to the source
– Need to identify internal improvements? How do you empower suggestions from your employees to improve and thrive?
– Six Sigma– Small Group Activities– Quality Circles– Or an empty suggestion box?
Bottom up starts from the top down . . .
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Internal MetricsWhat gets measured gets done• Identify your core competency
– SWOT Analysis
• Create or Maintain Internal Measurements– Monitor key metrics– Know your costs and your performance
• Outsource for other core competencies– Do what you do well, rely on experts for part time
projects and areas of specialty
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Partner or PerishWe are all in this together
– Even if you could do it all yourself, can you do less cost or better efficiency with a partner?
– Can a partner help you fill a weakness?
– Can you outsource part time requirements, dispatch to remote locations, or utilize special skill sets?
– Are you outsourcing your underutilized talent, resources, and competencies to generate revenue?
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TRIAGE & Remote DiagnosticsEffective intelligence
– Reduce using field service dispatch to diagnose
– Improve First Time Fix / First Time Complete ratio
– Reduce Labor costs, improve quality and customer satisfaction
– Improve technician quality, accuracy and productivity with pooled knowledge. What was done before and what worked?
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Route OptimizationMore productivity with the same labor
– Reduce Travel Time (non-productive labor)
– Reduce Fuel charges
– More Repair Events per Day (more revenue)
– Greater accuracy planning & scheduling
– Compare costs to maximize internal resources and contracted resources
– Have you integrated customer schedules, vendor schedules, parts, and dispatch?
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Part Prices & Freight ChargesHidden costs consume profit
– Do you compare multiple vendors prices?
– Do you compare cost of freight and hidden charges?
– Do you route parts for most efficient delivery location? (center, customer home, technician)
– Do you integrate parts delivery schedule with technician dispatch and route optimization?
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LogisticsYou want what where when?
– Are you using the empty trucks?
– Are you optimizing your routes?
– Do you identify client specific time requirements compared to flexible schedules?
– Are you effectively mapping your fleet to contracted supplemental carriers by cost, schedule, route, weight, and contents?
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Skill Based SchedulingThe best person for the RIGHT job
– Are you using the right skills for the right jobs?
– Are you maximizing throughput with junior technicians on appropriate tasks?
– Are you effectively utilizing the time of experienced skilled labor on the right tasks
– Are you effectively monitoring internal resources and contracted labor?
– Do you have pay for performance?
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ReportingYou cannot manage what you cannot see
– Do you have real time visibility to monitor your process and identify gaps, interruptions, or anomalies?
– Do you provide real time visibility to clients & partners?
– Do you have real time updates from your vendors, suppliers, and contractors?
– How real time is your data and your decision-making process? How are you alerted?
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SecurityReady or not, here it came
– Gramm Leach Bliley, HIPAA
– State regulations being created now
– Do you handle computers, servers, hard drives, or other memory?
– Do you processes customer records or handle financial transactions? (Do you bill anyone?)
– Are you properly prepared and have you taken reasonable steps for privacy protection?
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Recycling & SustainabilityExtended producer responsibility
– Fourteen States have regulations today
– Federal Regulation have been proposed
– WEEE & RoHS are being updated
– Are you a collector? Do you take product?
– Do you provide data wiping services?
– Do you refurbish or provide asset recovery?
– Being prepared for regulation creates opportunity. Failure to prepare is a threat.
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IT BudgetsHow will IT spending change in 2009?InformationWeek Analytics Outlook 2009 Survey
76% Investing in Cost Cutting and Long Term Goals
24%
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IT Driven Results at UPSReal Bottom Line Results!• Route Optimization
– 30,000 miles saved in 2008 by using package flow technology to optimize routes for packages and vehicles. Fuel, labor, and time!
• Integration and Communication– 30,000 packages a month ship globally without three copy invoice
it used to take (Project launched January 2008 with 100 countries)
• Collaboration and real Cost Reduction– Working with HP, “spray on” locations and instructions reduce
printed labels. 1.5 million packages per day (3.1 million by 2010)
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ZSL Inc is dedicated to help you through this transition.
Visit us at the Reverse Logistics Trade Show Conference & Expo in Las Vegas
Feb 3-5, 2009Triage & Remote DiagnosticsRoute OptimizationParts Price & Freight Comparison Integration & Data CollaborationReal Time Reporting & VisibilityPrivate & Shared Public CRMSkill Based Resource ManagementCoordinated Dispatch & TrackingScheduling Control SoftwareTechnician Profile Management Inventory Control & WMSUnique Logistics ManagementCollector Systems for RecyclingSolutions for Recyclers
Reverse Logistics Conference & Expo
Third Party Service Providers (3PSPs) will be exhibiting their Reverse Logistics services & solutions at the Reverse Logistics Conference & Expo in Las Vegas in February 2009.
At the RLA Conference & Expo in Las Vegas, the focus of 3PSPs will be to help OEMs, Retailers & Branded companies become aware of RL support on a global basis. This is a rich opportunity for OEMs and Branded companies to identify future service partners. There has never been an opportunity like this for 3PSPs to sit down face-to-face with the key outsourcing decision makers from the major OEMs and Branded Companies.
Conference & ExpoFeb 3-5, 2009Las Vegas
John Mehrmann, Vice President, Business Development - ZSL IncSpeaker - Reverse Logistics Conference & Expo
John Mehrmann is Vice President of Business Development for ZSL Inc., a leading Technology Solutions Provider. John has over 20 years of experience that spans logistics, operations, sales, e-commerce, accounting, customer service, marketing, and training. His experience as an author, speaker at several trade conferences, and consultant for many of today’s executive management, has made John a valuable resource to colleagues in many industries.
Prior to ZSL Inc, John served as Director of Service Operations for Toshiba, Regional Sales Director for Data Exchange Corporation, as Operations Manager for SatisFusion. In 2005, John founded Executive Blueprints Inc, an organization dedicated to the advancement of human potential in business. John has had the privilege to design strategic solutions with esteemed colleagues and clients at Toshiba, Fujitsu, FUNAI, Sirius, Service Net, Wells Fargo, Deloitte & Touche, P&G, AT&T, AIG, Zurich, GE Capital, UPS, Iomega, CDC, and NSA.
John Mehrmann is author of the award winning book, The Trusted Advocate: Accelerate Success with Authenticity and Integrity. This groundbreaking book demonstrates practical applications to grow profit and retain loyal customers with honesty, integrity, and obligation. The Trusted Advocate contains entertaining stories and easy activities to personalize the experience, not only to boost revenue, but also to achieve a greater sense of personal satisfaction by an ethical approach to business.
Past RLTS Participation:
Topic - "Evolve or Become Extinct! A RL Model to Deliver Expanded Shareholder Value" - Singapore 2007 Las Vegas 2007
Topic - "Create Your Reverse Logistics Financial Model: Putting Dollars to the Metrics to Measure Your Options" - Las Vegas 2008
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