Think small
In an increasingly competitive marketplace, many small businesses continue to thrive and profit. Other businesses can do likewise by leveraging some of the intrinsic advantages small businesses have over larger rivals.
In the convention focus session, Act Small to Get Big Results, founder of the Warehouse Education and Research Council Ken Ackerman showcased strategies and practices employed by smaller public refrigerated warehouses (PRWs) to get and stay ahead.
Among the advantages of the small operator, he said, are personalized service, less bureaucracy, more flexibility, and greater creativity. Among the hallmarks of an effective small operator: top managers have their home phone number on their business card, the chief executive is personally involved with the top 20 customers, and no single customer dominates the business.
The most successful small PRWs have a true commitment to customer service, which stems from their truly understanding customers and their business, said Ackerman. Having this insight allows these PRWs to uncover potentially profitable new services that it can provide for customers.
By way of example, he cited GENCO, which was a small warehouse in Pittsburgh, Pennsylvania, before creating “reverse logistics.”
“The development was stimulated by the urge to help a customer who was having a difficult time managing the process of customer product returns, which have been a headache since the dawn of retailing,” Ackerman said. “GENCO's management had the vision to turn a dirty job into a profitable niche service” by developing a centralized returns process to help customers manage and maximize the value of their returned products.
Companies can develop necessary but neglected business niches by talking with major customers and suppliers and asking them purposeful questions, he said. Ask what services are lacking or are being performed poorly. Find out what services are perceived to be too costly or unreliable. Ask customers what else could your business do for them.
Some niche services to consider: staffing, warehouse construction, packaging, diverting or product liquidation, transportation management, pallet supply, and reverse logistics.
When business opportunities are uncovered, Ackerman advised companies to hold a brainstorming session to determine the ones that are the most attractive to develop. An action plan should then be developed, assigning tasks to managers, and creating dates for completion, and tracking the progress.
Further, he also suggested seeking ways to create patent or copyright protection.