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    Dell and Supply Chain Management

    By
    Steve Poppe
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    The problem with manufacturing companies whose sole focus is to be expert in supply chain management is that they tend lag as innovators.  They rely on other people’s parts (OPP).  Some end up as middle of the pack companies growing through acquisition. Dell is in this position right now.   One could argue, but for me, Dell made its mark by being a low-cost, high quality computer provider.  Sure, you could order models with tailored features, but when push came to shove, consumers believed Dell drove price points for laptops below the $1,000 mark and was a great value.

    For Dell to keep its quality up and its prices down, it needs to do more than find the best circuit manufacturer in China or motherboard maker in Taiwan. It needs some R&D breakthroughs of its own.  And patent it needs to patent them.  Change the form of PCs. Change the interface. Act like a design and component innovator.

    Over the past 8 years, to keep revenue up, Dell went into corporate services, then TVs and MP3 players, now they are on a buying jag, looking to purchase other companies.  Back in the day, before supply chain was the pop manufacturing science of the day, American companies invented — and created differentiation through research and development. Peace.

    Claim and proof.

    By
    Steve Poppe
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    My wife has kept the coffee in the freezer for years. This morning I went to make a pot and it’s not there. Why?  Because a woman with whom she works said it is not good to keep coffee in the freezer.  My wife changed her behavior for one of two reasons: the woman is a known, recognized coffee expert or the woman said something that led my wife to believe that putting coffee in the freezer hurts the taste. I suspect it was the latter explanation. The “something” she told my wife had to carry some weight. In advertising or marketing changing behavior requires claim and proof. Just saying it “tastes better if you don’t keep it in the freezer,” is not convincing. Especially to someone who has done it for so long. The claimant needed to persuade or convince through reasonable, explainable proof.  Not “taste test” proof, but scientific sounding, plausible evidence. 

    Claim and proof is what selling is all about.   (I’m off to get my first cup of non-freezer coffee in years. Wonder if it’s going to taste any different.) Peace!

     

    Art vs. Craft

    By
    Steve Poppe
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    What’s the idea with Bob Lefsetz? I’ve seen music blogger Bob Lefsetz in person and he’s a trip. At Canadian Music Week earlier this year he was talking about the draw and star power of today’s musicians and asked a packed house “Would you fuck Feist?”  Point made. Today his post starts with “Fuck Facebook. Mark Zuckerberg is a pompous…”

    With Lefsetz it’s not about the f-bomb – though, there’s a lot of that – it is about his in-your-face attitude, question-everything-mentality, and amazing prose of the day. There is no better blogger. He gets today. He gets his readers.

    Check out his rant today about the poor state of the music business. Piracy and bad management aren’t the problem, he argues, lousy music is.  He’s so right. There is too much craft and not enough art in music today.  Art is personal and it comes from the depths of the heart. When the heart and the guitar throb, the music tends to be powerful. Listen to Janis Joplin or early British punk. When Janis wrote and sang her art she wasn’t thinking of tax-deferred annuities or who will be handling the catering at her shows.  She was feeling it. Lefsetz is art, other music writers are craft.

     

    Are we advertising resistant?

    By
    Steve Poppe
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    Cows are fed antibiotics to make them less likely to become sick, making them a more cost-effective food source. The result of this is that antibiotics are being passed on to humans who, in large part, are becoming resistant. This will change when the government gets it act together, but it makes we wonder if all the bad advertising out there today is making humans resistant. I think it does. We’ve seen so many brands flinging around superlatives and “me, me, me” communications that we’ve become resistant to this strain of selling. So as practitioners we’ve moved on to newer forms: viral, word-of-mouth, experiential, online.     

    The good news is that people are still watching TV, listening to the radio and reading. And when good advertising comes along it gets noticed. And talked about. And it works. Advertising is not dead. It’s just on antibiotics. Peace!

    Chicago, JWT and CPG

    By
    Steve Poppe
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    What’s the idea with Chicago? 

    Is it losing its luster as an advertising community? JWT, one of the city’s cornerstone agencies, is down to 50 people. At its highpoint JWT employed upwards of 800 in Chicago; some of which were the highest priced, highest profile creative people in the business. Chicago has always been a stronghold of packaged goods advertising, thanks to its proximity to the giant food and beverage manufacturers, which makes me wonder if consumer packaged goods (CPG) marketers are less committed to traditional consumer advertising – the recession aside.  Of the thirteen companies identified by Ad Age as Super Bowl XLIII advertisers only Coke, Pepsico, Anheuser Busch and Pedigree are present. The rest are car, tire, and Internet plays. Hmmm. Peace!

    Paper, paper.

    By
    Steve Poppe
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    I know, I know the newspaper business is in the crapper. The pundits on The News Hour last night were ruing the demise of the newspaper. But here’s what I see happening to Samuel Zell and his Tribune properties. I see a smart business wo/man coming along an scarfing up the Chicago Tribune and Los Angeles Times at a major discount. News is new and these two papers are among the best in the business at collecting and reporting it. The new owner(s) will k now that it’s the paper that’s the drain, not the news, and will extend and build up the online side of these properties. 

    In the not-too-distant future all newspapers will primarily be read online and the paper papers will each cost about $8.00 an issue. As the world flattens further (Is a global language that far away?), news will become more important, not less.  We will just be consuming it in different ways. Whoever buys the LA Times and Chicago Trib knows this…and is quite the visionary. Let’s see steps up. Any guesses? Bill Gates?

    Save the people, save the world.

    By
    Steve Poppe
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    Co-mingling with the few holiday ads in today’s New York Times are all these long copy ads by America’s corporate giants running on about how they are saving the people and the world. To wit. IBM is saving the people’s food supply through smart data collection and analysis. JP Morgan Chase’s “way forward” is by saving businesses and institutions through lines of credit. Exxon Mobil is saving the environment through conservative energy practices (yeah right). Kaiser Permanente, by reducing paper, is saving patient lives. (That one actually makes sense.) Some guy in Florida is saving us nutritionally by selling Honey Bell oranges. And Shell is saving the planet by getting us the “difficult oil.” Whew, I feel much better. Heroes all? 

    Detroit and Wall Street Both Make Products

    By
    Steve Poppe
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    What’s the idea with all these bailouts?

    A lot has been written about the differences between the federal bailout of Detroit and that of the financial industry.  The automakers are being made to grovel and are under crazy scrutiny. The financial Machers (MAKH-ahs, for the non-Yiddish. It means big shots), not so much.  

    Here’s the thing: both these industries made stuff the American people bought. Cars are made of steel, plastic and electronics.  Mortgages are made of paper. Both are high-end products — the two biggest investments consumers make, actually – and both were aggressively marketed. Since people kept buying them, companies kept selling them.

    As to the predatory targeting of low-income families with toxic mortgages that didn’t require repayment for a year or two, that was beyond reasonable. But no one made people buy the freakin’ SUV de jour? That one’s on us.

    Detroit’s problem was poor judgment mixed with a dram of stupidity.  The automakers just never looked through the windshield to the future. The problem with Wall Street and Charlotte was avarice.  They used creative product development, but it was predatory.  Both industries were greedy, but only one was downright mean-spirited. Peace!

     

    Dell Now Selling Cheese Too.

    By
    Steve Poppe
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    I received a Dell Christmas circular today, all 28 pages of it. The cover displayed a nice red Dell laptop, a mini-tower, printer, two green Christmas tree balls, a Canon camera and a Palm Treo (it was too small to actually tell). The mini-tower was priced at  $429, the laptop $649.

    The inside folio displayed other inexpensive, low-margin products and the second spread was hawking a Microsoft Zune MP3 player, Tomtom GPS, Palm Treo and Canon EOS Rebel.  Not until you got to page 12 did you see a higher margin product and even that was under $1,000.

    Sorry to keep dumping on Dell, a company I truly root for, but they need to focus on computers. (I think they finally got out of the TV business.) Dell needs to stop printing 28-page brochures pushing the “cheese” end of the product line and OOP (other people’s products) and start focusing on making the next iPod of the personal computer industry. Then market. Peace!

     

       

    Detroit Bail-out Challenge – No Winner.

    By
    Steve Poppe
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    0

    A few weeks ago I issued a challenge that would reward one of Detroit’s Big 3 auto makers with all $25 billion in requested bailout funds. There was to be only one winner and that winner had to demonstrate it “got it” by presenting a plan for profitability. The challenge required each company show vision and commitment to smart design, resulting in vast improvements to natural resource consumption and reduced emissions.   

    What Detroit came back with was a bigger hat (to put money in), lots of cuts, lots of sales (buh-bye Hummer, Saturn and Saab,) agreements to renegotiate with the UAW, plant closings and a lot of other below-the-line, cost-cutting initiatives. Oh yeah, they all said – probably in the last paragraph of the leave-behind – they “would accelerate their timetables to make more fuel efficient vehicles.” RUKiddingME?

    Had GM come back with a plan in which they decided to keep scaled back versions of Cadillac, Saturn and GMC only, had Chrysler committed $8B to research and development of electric cars and charging devices, had Ford suggested buying Tata Motors, we may have had a horserace or a winner.

    What we got were cost-cutting solutions. Solutions to win the hearts of congress. No future-forward ideas. Nada. No winner!

     

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