Whether the product is cars or chocolate, tiny margin differences between huge profits and massive losses rest entirely on efficiency in the supply chain.
Who makes the best chocolate in the world? According to the Swiss, it’s the Swiss; the Brits say it’s Cadburys (Dairy Milk, no contest) and if you ask the people who work with the stuff, it’s whatever takes your fancy so long as you keep buying more and more of it.
I was returning home from the British Grand Prix with a bunch of mates and, as inevitably happens on these journeys, we talked about work. One of the group had recently left his job as a commodity broker in Singapore. His specialist subject – and indeed the source of his wealth – was the humble cocoa bean.
His chocolate knowledge was, as you would expect, encyclopaedic. He told us about the process of separation that leaves cocoa powder (brown and bitter) and cocoa butter (white and deliciously fattening) from which the treats we buy in the shops are made.
More interestingly he talked about the supply chain that leads from farm to factory gate and the numbers of people, processes and functions involved. It was far removed from the image I had of commodity trading. In my mind was a floor, like the one on which Messrs Eddie Murphy and Dan Aykroyd triumphed in Trading Places.
Apparently it’s not like that at all.
The supply chain that leads to the Lindt Lindor truffle balls that every human on earth adores comprises: farmers, fertiliser, tools, trucks, sacks, ships and (mostly Swiss) machinery. Once processed, the product is shipped off to Lindt, Cadburys, Hersheys and other manufacturers to help bring Type II Diabetes to citizens in the developed world.
The underlying point he made is that to make the process work like a well-greased machine, make sure that everyone in the supply chain is kept involved about what everyone else in that chain is doing. The dusty, sweaty, machete-wielding harvester is unlikely to ever meet the white-coated Swiss chemist in whose laboratory new confections are created. Because of that, each needs to know what the other does so they can can adapt their work for mutual benefit.
Irrespective of whether the product is cars or chocolate, the tiny margin differences between huge profits and massive losses rest entirely on efficiency in the supply chain. And you know what? That’s where good content and slick comms procedures can be really effective to help move the numbers to black.