As the sun neared the horizon, the wind was still blowing almost 25 mph and I thought I could get at least one more wind surfing run
into the middle of the Laguna Madre from the South Padre Island shore. I was at approximately 1.5 miles off the beach when the boom suddenly snapped and I was violently thrown into the 30 mph path of my own board. Fortunately the razor sharp fin missed me, but not the bulk of the board and I now carry some new bruises. Recovering from the crash, I glanced at the distant beach and realized I was in for a very difficult time getting back to shore. The good news was that in the Laguna Madre, the average depth of the water is less than 4 feet and you can literally stand in the water regardless of the distance from the beach. So as I trudged through the water dragging the windsurfer, I had plenty of time to contemplate the current economic situation in South Padre Island.
The friend that had convinced me to join him on this holiday had commented on how badly the area had been hit by the plunging exchange rate between the Mexican Peso and the American dollar. Typically, over the week preceding Easter Sunday, the hotels along the beach in South Padre are filled to capacity with Mexican Nationals who choose to spend the holiday north of the border. In years past, the volume of tourists is so far above the average that the stores shelves are emptied early in the week of such staples as bread, and water, and my friend lamented over the difficulties this often presented. I naturally commented on the crazy fact that a known and predictable event still results in empty store shelves. Why wouldn’t stores stock up for the event and take better advantage of this revenue generating opportunity? A little more investigation revealed that the stores do make a moderate attempt to stock up, but apparently never to the degree warranted.
This year seemed to catch everybody by surprise. When the Peso plummeted, so did the hotel reservations and naturally the consequence was a glut of supplies at not only the grocers, but at the tourist stores as well. “Special” sales were being advertised everywhere to deal with the excess inventory and revenue shortfall. I naturally wondered how much of the excess inventory was avoidable. The Peso began falling weeks before the Easter Week and a quick check of the reservation bookings at several of the larger hotels would have revealed the pending tourist shortage problem. Had the business been tapped into these early warning systems perhaps they have could have avoided some of the cash flow problems that the excess inventory obviously introduced (hence the special sales).
Take a lesson from the stores in South Padre Island and question whether your company has the tools to monitor and alert users to business conditions that could harm your business. Early warning systems will often make the difference between the ability to profitably respond or at least minimize the cost or consequences.
Kerry Zuber
is the Director, Solution Consulting for Kinaxis, provider of the on-demand RapidResponse service that empowers multi-enterprise manufacturers with the collaborative and integrated demand-supply planning, monitoring, and response capabilities.
Supply chain thoughts from the edge: do you have an early warning system?
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