Chief Pricing Officer

This blog has covered a lot of ground over the last eight months, from economics jokes to retail and wholesale pricing concerns, from the meat industry to the president’s inaugural address.

Though there’s a little something for everyone in the pricing field on the CPO blog, at its core it is dedicated to the issues touching the manufacturing pricer, strategist, executive.

Today’s post offers a handful of articles that create a sobering retrospective. My hope is that by acknowledging reality and embracing the means to a solution, the headline in 2010 will be a banner proclamation that the manufacturing industry has not only survived, but transformed itself into a model industry of transparency and intelligent business.

2009
The Collapse of Manufacturing
Economist
http://www.economist.com/opinion/displaystory.cfm?story_id=13144864

“The destructive global power of the financial crisis became clear last year. The immenisty of the manufacturing crisis is still sinking in, largely because it is seen in national terms - indeed, often nationalistic ones. In fact manufacturing is also caught up in a global whirlwind…

2007
For Manufacturing, a Recession Has Arrived
New York Times
http://www.nytimes.com/2007/02/28/business/28leonhardt-web.html?_r=1&scp=5&sq=manufacturing&st=cse

“Is the entire United States economy in danger of going the way of the manufacturing sector? Is it possible that we’re headed for a real recession?”

The manufacturing industry has a chance to reinvent itself and our hope lies in transparency. Transparency of price is a powerful point to start the ripple effect that will change the entire conversation throughout the supply chain -  and the economy. From another recent Economist article, this one on the finance industry, we are offered a truth that should be equally applied to all industries:

“When information is relevant, standardised and public, it fosters intelligent decision-making.”
Economist
February 21, 2009
http://www.economist.com/finance/displaystory.cfm?story_id=13144773

To me, that sentiment gives hope for the possibilities yet to be fully realized in manufacturing industry.

So, we talk a lot here about food prices and what they mean to manufacturers and the folks at the start of the supply chain. But what about the folks at the other end, like you and me? As most people know first hand, food prices can be one of the biggest drains on families’ budgets – the bigger the family, the bigger the drain, and the lower a family’s income, the bigger bite food takes out of the monthly budget.

The United Nations’ Food and Agriculture Organization estimated that international food prices are up more than 60 percent since 2006, including a staggering climb during the first three months of 2008. Beyond the obvious bad news, other economic dangers stem from high food prices – a reverse “trickle-down” effect. Food and housing are a family’s two basic costs, expenses that cannot be forgone or significantly trimmed back – everyone needs to eat and needs a roof over their head. As those costs increase, consumers stop discretionary spending: restaurant visits slow down, people stop buying big ticket items, and generally stop spending money. Those at the bottom of the economic ladder also need more support, providing further strain.

Food prices are all encompassing, affecting broad swaths of the public and creating depressed conditions at the very base of the economy – consumers. Combine this with extreme pressure from the financial markets, and the country’s economy is squeezed from almost every angle.

This is a very simple illustration of why food producers need to intelligently determine prices. Smart prices throughout the supply chain benefit everyone in the long run.