Top 5 issues that can change the trajectory of your business

Succeeding in the label business is as much about carving out your position as it is defending it.

Top 5 issues that can change the trajectory of your business

Top 5 issues that can change the trajectory of your business

Certainly, we’re used to the typical challenges (for example competitors undercutting prices, turnover in client entities, subcontractor reliability, etc.). But there are a few new issues that we need to get a handle on. While these may have seemed fleeting just a few months ago, it now looks like they’re here to stay. We need to be aware of these and work every day to minimize their impacts on our operations – and our industry – today, tomorrow and beyond.

Let’s take a look at these escalating issues and how we can address them:

Supply chain shortages We continue to hear frustrations over the supply chain. Stock availability, manufacturing shutdowns, freight problems and other elements are affecting our ability to serve our customers. We can’t expect customers to just put up with this, and we can’t expect their loyalty. Instead of getting beaten up by the supply chain, we should be thinking about a ‘supply change.’ And we should be doing this proactively. Customers won’t be happy if you have to substitute material mid-production. But they won’t mind if you find solutions that help them save money, be greener, or gain other benefits – in advance. Look at standard/repeat programs and find ways to improve or better navigate the current supply chain. Doing this will put factors back in your control and shield your customer from the impact. Moreover, it will show that you are forward-thinking, innovative, and committed to customer growth – the hallmarks of our great industry.

"You may want to re-egzamine your purchasing strategies, as the just-in-time model simply doesn't work in the current marketplace"

You may also want to re-examine your purchasing/warehousing strategies, as the just-in-time model simply doesn’t work in the current marketplace. Repurpose existing space or create an alliance with those who can provide the space. Having materials on hand may make the difference in winning the order – and the continued trust of your customer.

Inflation and recession impact Our current financial environment has become tenuous, as we teeter between inflation and recession. Either way, we don’t win. What’s important is that we shield ourselves from the impacts as much as possible, so we don’t have to push these through to our customers.

Take a look at vendor relationships, purchasing contracts, economies of scale, and even office/human resources expenditures, and see where you can get leaner. Consider collective buying groups where you can offset price increases. Review your sources, and ask long-time vendors about prices, options and terms. Maximize your buying power better than your competitors to ensure you’ll stay strong through these pressures.

Manpower Every industry is struggling to get and keep great employees. People are what make a business, and relationships are what keep your customers connected. Manufacturing in general has had difficulty attracting new entrants into the field as it may appear stodgy.

This effect is exacerbated by the educational system’s emphasis on STEM (science, technology, engineering, and math) careers.

We need to capture the innovation, excitement and opportunity of labels and packaging in our recruiting efforts. Moreover, we need to showcase our technologies.

Market with video, partner with schools, run demos, provide work-study options, and broadcast our industry’s vibrancy on social media and the web. Remember also to show new candidates how we are sustainable and invite them to help lead the effort. By speaking in younger workers’ terms and expectations, we’ll open their eyes to the opportunities to be part of the thriving label industry.

Changing Competition Ongoing consolidation is changing the face of labels and packaging, and it will continue to create new powerhouses and displace others. We need to develop a plan that allows us to compete without impacting our customers. For some of us, we may need to acquire or sell to remain competitive. Consolidation will affect our customers only if they begin seeing gaps or better opportunities. Our customers have choices. Stay cognizant of your position and your competitors, and do everything possible to ensure your customers keep choosing you.

Covid-19, war in Ukraine, global pressures The things which we have the least control over are the things we need to be most aware of. Follow the news and watch for events that have implications for your business, your customer’s business, and those businesses that support both. Awareness gives you the chance to plan and prepare to mitigate potential problems – or capitalize on changing dynamics.

When you look at these five issues, it may seem overwhelming. Yet, our great industry has thrived because of our ability to combat obstacles or invent solutions to turn them around. We’ve all faced difficult times, and we’ll get through them. We just have a new set of adversaries.

Bob Cronin

Bob Cronin

  • M&A columnist