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With wine and spirits activity slowing to its seasonal drip, it looks like there is no escape from the recession for the industry. But it is not the reduced activity, which is likely to have an adverse impact on smaller companies.
It is likely instead to be unilateral demands for improved payment terms from the most powerful in the drinks marketplace, often without any consultation. I believe that this is unreasonable behaviour and if pursued could lead to disaster for our sector.
Logistics companies are also not immune from these issues or indeed unforeseen customer failure. In an economic downturn, logistics companies also need access to capital to invest in their businesses and provide services at the lowest possible cost.
Having been a senior 'bean counter' in the past, I am only too aware of the importance of a well-capitalised and financially well-managed company in ensuring sustained business success. That's why since I joined London City Bond as chairman in 2007, we have focussed on tightening control over costs and considerably reducing debtor days, thereby improving cash flow and keeping our prices stable. Financial stability of logistics providers will, in my view, come increasingly under the spotlight from the companies in the wine and spirits sector when they look to outsource their supply chain management requirements in the future.
Business costs will have to be expedient rather than extravagant. Activities such as marketing will need to be reviewed and justified. There has got to be a new realism to ensure that unnecessary costs are not at the expense of customer service or indeed customer profits.
In addition to the need for a renewed internal financial focus, supply chain cost efficiencies will also be increasingly demanded by our customers. Co-operation with customers, competitors and suppliers alike, which are critical in the good times, will be even more important now.
For companies that focus on internal finances and enhance cost efficiencies for their customers, 2009 could still be a prosperous new year!
With wine and spirits activity slowing to its seasonal drip, it looks like there is no escape from the recession for the industry. But it is not the reduced activity, which is likely to have an adverse impact on smaller companies. It is likely instead to be unilateral demands for improved payment terms from the most powerful in the drinks marketplace, often without any consultation. I believe that this is unreasonable behaviour and if pursued could lead to disaster for our sector.
Logistics companies are also not immune from these issues or indeed unforeseen customer failure. In an economic downturn, logistics companies also need access to capital to invest in their businesses and provide services at the lowest possible cost.
Having been a senior 'bean counter' in the past, I am only too aware of the importance of a well-capitalised and financially well-managed company in ensuring sustained business success. That's why since I joined London City Bond as chairman in 2007, we have focussed on tightening control over costs and considerably reducing debtor days, thereby improving cash flow and keeping our prices stable. Financial stability of logistics providers will, in my view, come increasingly under the spotlight from the companies in the wine and spirits sector when they look to outsource their supply chain management requirements in the future.
Business costs will have to be expedient rather than extravagant. Activities such as marketing will need to be reviewed and justified. There has got to be a new realism to ensure that unnecessary costs are not at the expense of customer service or indeed customer profits.
In addition to the need for a renewed internal financial focus, supply chain cost efficiencies will also be increasingly demanded by our customers. Co-operation with customers, competitors and suppliers alike, which are critical in the good times, will be even more important now.
For companies that focus on internal finances and enhance cost efficiencies for their customers, 2009 could still be a prosperous new year!
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