By Andrew K. Reese
Ask 10 economists when the current recession will end, and you'll likely hear 10 different predictions. Ask Jim Tompkins, and you might hear that the end of the downturn isn't nearly as important as the start of the upturn. Tompkins, CEO of Tompkins Associates, the operations-focused supply chain consulting firm, believes that the economy already is on the verge of what he calls "The Great Comeback."
"It is clear to me that corporate profits will rebound in late 2009, resulting in business investment hitting 'bottom' in the first quarter of 2010. When the recessionary 'bottom' is hit, the global marketplace will respond quickly just as the global decline occurred quickly," Tompkins wrote on his blog "GoGoGo!". As a result, companies must be positioning their supply chain now to take advantage of the uptick or risk being left behind by better prepared – and more agile – competitors.
In an executive briefing outlining his vision for the comeback to come (available at www.SDCExec.com/greatcomeback – registration required), Tompkins offers up a five-step process for companies looking to ride the next wave. He recommends starting with an assessment of how factors like the global and domestic economy, business cycles, consumer spending patterns and investment trends will affect your business. The goal is to understand the "comeback patterns" specific to your industry.
Next he calls looking at the competition to understand how other companies in your industry have responded to the recession and how they are likely to position themselves in the recovery. Third, you must understand when your business' own "turning point" is likely to come – when demand will start ticking upward again – so that you can gauge the lead times necessary to respond with the right amount of inventory or capacity to meet the rising tide of orders.
Once you understand all that, you can move into analyzing your enterprise's capabilities and processes and assess the "as is" against the "to be" state necessary for the upturn. Tompkins advises asking questions like, "What process upgrades do you need to deploy in order to not only recover, but to also gain market share, grow and prosper?" or "What are the process upgrades you need to have in place after the recession to enhance customer satisfaction, increase capital efficiency, increase profitability and increase long-term shareholder value?"
Finally, companies must create an action plan that provides for putting in place the people, processes and technology necessary to make good on the "to be" state at the right time to catch the wave of the upturn just as it begins to rise rather than after it already has crested. As Tompkins writes: "Research on prior recessions has shown that companies that are too timid or too late to act often fail to maximize their Comeback and the creation of value...The time is now for organizational leadership to step up to this challenge with a bold, proactive, Great Comeback Plan."