Preparing for Change
Leading organizations are preparing for the sweeping changings driven by the shale gas tsunami. TopLine Analytics has developed a program to help. It consists of six elements comprising an interconnected program.
The profound changes driven by shale gas tsunami will impact all aspects of a manufacturing company. Leading companies respond to sweeping market changes by engaging their entire organization in addressing challenges, shale gas impacts are no different. The first step is getting the organization in tune and aware. The organization then can start thinking, and planning to incorporate the impacts of shale gas into their day to day activities as well as strategic plans. This activity continues as the shale gas tsunami of change unfolds and to ensure the topic continues to be in focus.
Opportunity – Risk Identification
This initiative provides an economic assessment of an organizations opportunities and risks as the shale gas impacts move down the value chain. Order of magnitude estimates allow prioritization of efforts and understanding of what needs to be done. It also allows for reducing the scope of the value chain analysis to just the critical segments. Timeframe for the value chain changes are estimated to windows of opportunity.
Value Chain Analysis
As with any other opportunity knowing where and when to focus is critical in efficiently managing. This includes not only where prices will be subject to shale gas impacts, but also when and how fast. Once completed, monitoring programs are needed to assess progress and suggest adjustments to plans.
Energy and raw materials are the first to feel shale gas driven impacts. The challenges organizations face include completely rethinking the type of purchasing relationships to maximize opportunities. As with any dramatic shift, new suppliers who are more in-tune with the organizations needs maybe required. New vendors may be required. Sourcing professionals also need to work with product innovation teams to identify new and lower cost raw materials replacing materials do not have shale gas tsunami driven changes in cost structure.
Existing products need to be reviewed for opportunities to substitute shale gas driven lower cost alternatives. The resulting new cost structure many enable new market opportunities. Entirely new products may also become viable. This element more than any other requires creative what-if scenario generation that can give rise to new revenue streams.
The strategies developed in the previous initiatives need to be broken down into specific projects and activities. These in turn need to be incorporated into the company’s goals and day to day functions. Program management including project ROI stage gate, specific accountability, critical risk factor analysis, and measurable performance indicators ensure the program stays on track.