12 minute read
BUSINESS
BUSINESS Business Agility Part 3: Your Suppliers
Part three of this series on business agility focuses on your suppliers. As with the first and second articles (Your Clients, and Your Industry), the external force of your suppliers is important to understand. In addition to the obvious fiscal benefits, managing your supplier relationships effectively can have significant strategic benefits to your business, and may also be an influential point of difference for your business.
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Supplier types vary greatly and are often unique to each industry and business type. For the purpose of this article, we will discuss two key suppliers for any service industry –suppliers of goods, and suppliers of services. In a previous article we discussed demand and supply, and the theories Willingness To Pay (WTP), Willingness To Accept (WTA), and market equilibrium (Supply & Demand, 2021). Appreciating the current volatile nature of our economy, and in recognition that market equilibrium is a theoretical construct, there is little point in delving too deeply into how to achieve perfection within the market. However, we can discuss what tactics can be employed to effectively leverage your supplier relationships and yield the best outcome for your clients and business. To break this down into digestible chunks, we will cover the following in this article:
■ Supplier type and their relationship to your business ■ Strategic approaches to managing the supply of goods and services
It is impossible to cover all aspects of this topic within these few pages. For more information you may wish to reference sources located at the end of the article or contact Gray Counsel directly for specific consultation.
Supplier type and their relationship to your business
Most service industries will have suppliers for goods sold or consumed, and suppliers for services provided. Understanding how these two impact your business fiscally, strategically, and culturally is essential in maintain an agile business model. Theories and economic nomenclature aside, it is a basic and core business strategy to understand your current supply/demand position, and project and plan for future market scenarios. Let us first look at supply of goods sold…
Iwon’t waste your time covering the basics that you already know about dealing with sales reps and haggling prices. Rather, let’s look at the bigger picture!
Understanding the fiscal implication for goods supplied allows you to plan for the eventual return on investment you will receive from that good. Further to that, strategically assessing how each supplier can help you achieve that is paramount. Start with understanding the goal – what is your expected cost of goods ratio to revenue? This will vary depending on industry but is often less than the cost of services supplied (e.g., cost of wages), and should always be established from the profit and loss plan for your business. Iwon’t bore you with the semantics of P&L, but this can be unpacked further by reaching out to me directly.
If your cost of goods ratio to revenue is below your industrystandard, you could be selling at the consumers minimum willingness to pay (WTP), and you may be selling items at a loss. However, if you are selling your products at the maximum WTP amount, you are likely to have a high profit ratio for that item. While this may be beneficial in the short term, a high selling cost could price you out of the market and provide your competitors with opportunities to capture market share. Balancing the perceived value ofaproduct in relation to its price point is an economic rabbit hole that we won’t have time to dive down. However, you can find out more information by looking at articles specific to Perceived Value Pricing, and Value Theory. The cost for services provided is often one of the biggest investments a business makes. Within the Veterinary industry, our primary service costs relate to wages for permanent staff and subcontractors. Wages are an investment in people, and the complete cost will often include continuing education allowances, bonuses, social events, and internal training and education. In the current market, most businesses are finding wages and locum costs are being dictated by
the individual. This ultimately comes back to market equilibrium (as we discussed in a previous article), whereby the demand for services outweighs our ability to supply. As such wage costs are increasing across many industries, and for the Veterinary industry it is certainly time that our teams receive the reward and recognition they deserve. It is also essential that wage costs are managed in line with the overall business plan, and that your business can sustain the wages you currently have and predict to have in the future.
Strategic approaches to managing the supply of goods and services
The theme running through this article series is agility,so let’slook at what tactics can be employed to generate agility via the management of your goods and services. The elasticity of prices will ultimately determine how agile you should be for the market. Most fast-moving consumer goods prices may be seen as elastic. This is because there are a number of substitutes and often a reasonable supply line. However, the impact to suppliers during the pandemic, has made us veryaware that even basics such as toilet paper – can easily become a scarce commodity. Specialized goods such as medications or medical equipment is far less elastic, as there are often few to no substitutes and the supply is often limited (e.g., prescriptions required).
Toremain agile in the current market, there are a few things you can do in managing your supply of goods. Firstly, ensure your prices reflect not only market value – but also reflect the level elasticity for that item. As an example, you may pay a higher price for a specific over the counter medication which can be bought at a local pet store at a far cheaper price. If this is the case, there is no reason to inflate the price above market value, but rather consider discontinuing the line or stocking less of the product. In this instance you may wish to invest more into prescription drugs that only a registered professional can dispense. By specializing in the products you sell, you allow your business greater opportunity to adapt to market demand.
Similarly, you can achieve business agility byspecializing in the services you provide. This may seem counterintuitive; however, aunique service offering will garner greater demand than a generic service. Put simply, this is your point of difference and is an essential part of ensuring your business remains relevant and desirable for the long term. However, to provide this specialized service you will need a team that can deliver this. This could be a team of registered specialists, or it could be a team dedicated to a special interest area. It may also be as simple, as a dedicated customer service team who care for your clients and patients. Whatever your point of difference, the team you invest in should deliver on this, and also reflect the core values of your business. How to recruit such a team is another topic altogether.
Knowledge of suppliers and market, and having the strategies to manage them are fundamental pillars to the success of any business. This is even more crucial in today’s tumultuous economic climate. However, remember that any strategy or tactic should always link back to the overarching business plan, and should reflect the mission of your business and its core values.
References
Sloman, J., Norris, K., & Garratt, D. (2014). Principles of economics (4th ed.). Frenchs Forest: Pearson Australia.
Michelle Gray
My journey into the veterinary industrybegan with nursing. Now,many years later,Iam privileged to lead multidisciplinary teams across Australia. I have worked in leadership roles within universities, corporate human health care, and media industries in addition to my work in the veterinary field. I have an MBA (research) and am on my way to commencing a PhD next year in veterinarybusiness and not-forprofit industry. When I’m not working my day job, I also support small business through my consulting firm Gray Counsel. Email me at info@graycounsel.com
Fighting stress to help vets thrive
From page 1 and wellness roundtable.
The association also recently developed a policy which outlines the value of taking action to moderate demands linked to work stress.
“It is extremely important that we continue to formulate the overarching industry frameworks and guidelines that will protect the wellbeing of veterinary practitioners,” Vale said. “However, we cannot do this alone, we need the support of the whole profession and Government to help us to effectively care for the people in our profession.”
A total of 66.7 per cent of veterinary respondents to the AVA research said they had experienced a mental health condition at some stage (compared to 61.8 per cent nationally), and of those 60 per cent said their condition had been diagnosed by a medical professional.
Women were far more likely to have experienced a mental health condition (72.1 per cent vs 53 per cent of men) and were more likely to have been impacted by this in the last 12 months (47.3 per cent vs 27 per cent).
Women, students, veterinary nurses and 25 to 29-year-olds were most likely to rate their mental health as poor or very poor.
The issue of veterinary mental health has attracted mainstream media attention, with The Sydney Morning Herald highlighting the AVA study alongside a smaller study bypsychologist Nadine Hamilton, and 2020 research into professional suicide rates conducted by Monash University. The AVA’s Veterinary Wellness Strategy/summary of research findings can be found atava.com.au. ■ SAM WORRAD
Shortage of rural veterinarians reaches crisis point
From page 3 practice manager Lisa Wiseman told the ABC.
Vets on Eyre is currently the only veterinary practice servicing a 170,500 square kilometre area –another local clinic temporarily closed due to COVID-19 – and the practice regularly makes 1000km round trips to provide regular care to remote areas.
“We don't need another vet clinic as such, we need more vets that want to work in the country,” Wiseman said.
“It is pretty sad. There area lot of people with animals out there in remote and rural areas that don't have immediate access to veterinary care.”
Queens birthday honours celebrated
From page 1 Coffill is secretary and Canberra area coordinator of Hear No Evil –Australian Deaf Dog Rescue.
The not-for-profit works on rehoming deaf and otherwise impaired dogs, and also provides support and information to those who already own deaf dogs or are considering adopting one.
Hear No Evil offers basic training to the animals in their care and gives ongoing support to adopting families in forever homes.
■ SAM WORRAD
More reptiles at greater risk of extinction
From page 5 The study found that those regions and taxa identified as likely to be more threatened should be given increased attention in new assessments and conservation planning.
Co-author Shai Meiri from the Tel Aviv University’s School of Zoology, and the Steinhardt Museum of Natural History, said it was important to note that the additional reptile species identified as threatened by the study’s models were not distributed randomly across the globe or the reptilian evolutionary tree.
“Our added information highlights there are more reptile species in peril – especially in Australia, Madagascar, and the Amazon Basin – all of which have a high diversity of reptiles and should betargeted for extra conservation effort. Moreover, species-rich groups, such as geckos and elapids, that include cobras, mambas, coral snakes, and others for example, are probably more threatened than the Global Reptile Assessment currently highlights. These groups should also be the focus of more conservation attention,” he said.
Co-author Uri Roll, from BenGurion University’s Conservation Biology & Biodiversity Laboratory agreed the research could be important in helping global efforts prioritise those at-risk species.
“Our world is facing a biodiversity crisis, and severe man-made changes to ecosystems and species, yet funds allocated for conservation are verylimited. It’skey we use these limited funds where they could provide the most benefits. Advanced tools such as those we’ve employed here, together with accumulating data, could greatly cut the time and cost needed to assess extinction risk, and thus pave the way for more informed conservation decision making,” he said.
“Automated assessment reveals that the extinction risk of reptiles is widely underestimated across space and phylogeny” is available at journals.plos. org/plosbiology/article?id=10.1371/ journal.pbio.3001544
From page 14 veterinarians get information on animal welfare mainly from the internet and veterinary conferences/meetings and thought that their clients obtained animal welfare information from various sources. The findings show that there is a need to improve education on animal welfare in veterinary curricula and the provision of relevant continuing education, so that companion animal practitioners can keep abreast of developments and societal expectations. Nienke Endenburg1,Shane Ryan2,Hein A van Lith34 JAppl Anim Welf Sci.2022 May 3; 1-48.doi: 10.1080/10888705.2022. 2047681. 1Human-Animal Relations Group, Section Animals in Science and Society, and Animal Behaviour Clinic, Department Population Health Sciences, Faculty of Veterinary Medicine, Utrecht University, Utrecht, The Netherlands. 2Companion Animal Surgery Pte. Ltd, Singapore. 3Laboratory Animal Science Group, Section Animals in Science and Society, Department Population Health Sciences, Faculty of Veterinary Medicine, Utrecht University, Utrecht, The Netherlands. 4UMC Utrecht Brain Center, University Medical Center Utrecht, Utrecht, The Netherlands.
Abstracts - koalas
From page 14 KoRV-A sequence a negative predictor of overall disease probability after the effect of KoRV load was accounted for.Further,koalas that were positive for KoRV-D or KoRVD/F were more likely to have urogenital C. pecorum infection or low body condition score, respectively, irrespective of KoRV load. By contrast, our findings do not support previous findings that KoRV-B in particular is associated with Chlamydial disease. Based on these findings we suggest that koala research and conservation programs should target understanding what drives individual differences in KoRV load and limiting exogenous subtype diversity within populations, rather than seeking to eliminate any particular subtype. Michaela D J Blyton1,Michael Pyne2,Paul Young1,Keith Chappell13 PLoS Pathog.2022 May 19;18(5): e1010513.doi: 10.1371/journal.ppat. 1010513. 1The University of Queensland, School of Chemistry and Molecular Biosciences, St Lucia, Queensland, Australia. 2Currumbin Wildlife Hospital and Foundation, Currumbin, Queensland, Australia. 3The University of Queensland, Australian Institute of Bioengineering and Nanotechnology,St Lucia, Queensland, Australia.
Free PMC article
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