The 8 fundamental keys for successful entrepreneurs

Entrepreneurship is, without a doubt, one of the most important paths a person can take in life. It’s about making an idea or a dream your path to the future. It´s true, that much has been told, especially in the last years, about entrepreneurship.

Part of it because of the need of finding a way through a complicated situation, this last couple of years. On the other hand, the digital era and the new technologies have open new ways and possibilities for those who know how to detect them and take advantage of them.

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But entrepreneurship is not an easy subject and not all ideas or dreams have the capability of becoming a profitable business. Therefore, before jumping into the pool, it´s better to find out that there is enough water. Better than jumping and discovering it in the fall. Or what would be the same, before starting a business, take time to make a previous analysis to see if there is a real need for your product or service in the market and if you can count on enough resources to satisfy it.

If this analysis has a positive outcome, it’s time to become an entrepreneur. Start to develop your business plan and I would recommend you to consider the 8 fundamental keys for successful entrepreneurs:

  1. Dominate your expertise.

 This is very important because in order to make a project work, the leader must know its specialty and if possible, should be an expert in the matter. Just by the accurate observation of the industry, good ideas can come up, so being prepared is essential.

So focus on your industry or specialty. Analyze the existing offer and develop your unique buying advantage, which is also called “order winner”.

  1. Passion.

Your business or project is going to require many hours so it better be a business you like and excites you, in an industry that you love. Passion is the oxygen that allows us to keep going forward when things are getting tough.

  1. Develop your business model

It´s very important to previously define what is going to be your economic business model (income, clients, price, payday, variable and fixed costs), and also the model financer (current assets: stock, clients, investment and financing), this last many times is not done well, but if it is developed properly, it is great to structure to your business.

A common mistake made by many entrepreneurs is to forget about their current assets. Enterprises normally enter trouble when they are out of cash and they cannot pay their workers, suppliers, social security, etc.

One of the most important aspects is to define the total financial revenue, including the required cash. In order to do so, it´s good to try Bootstrapping. The term Bootstrapping is used to start something without any resources or with only a very few. In terms of business, it means to start the activity with a few capital or none, and using only what you have already (a location or a garage, a phone, a computer, etc.). The less funding we need, the better.

  1. Don´t extend processes excessively.

Waiting for a product or a service to be absolutely perfect is not a good idea. When it is viable, launch it. Getting into the market will allow you to know if what you are offering is interesting, if something can be done better, changes, etc.

  1. Create strategic alliances.

Entrepreneurship is not going to be an easy path, so some company would be nice. Look for partners that have abilities or resources that may help you and can cover your needs, etc.

You shouldn´t ally with everybody, analyze what they are offering, where would you like to get and how, what are your needs. Only if you detect your own strengths and weaknesses, you will be able to know if you need a technological partner, an investor, a distributor, etc.

  1. Successful entrepreneurship means looking for clients.

Having a business requires from every entrepreneur a large amount of energy focused on the search for clients. Getting obsessed in getting investment funds or any kind of funding is not a good idea. To take advantage of the entrepreneur environment (support and opportunities of big companies, investors and public administration), may be a great help and give you some boost to your business. If it comes and it’s possible, great. But if not, your idea must remain viable and profitable and this is only possible if you have clients.

  1. Open Innovation.

As good as your idea may be, don´t hold to it or hide it. Just the opposite, we are living in the era of Open Innovation. Show your project to as many people as you can, show it to the world. The more people that know about your idea the better. If you know how take advantage of others opinions, it’s going to be a powerful source of help and improvement.

  1. An image is worth a thousand words.

If your product or service is very good but your image is not capable of showing it, then you have a big problem. The image of your brand, online and offline, is fundamental for your business success.

Finally, I would recommend you to be brave. Be brave, to face every challenge and obstacle that comes to you, and even face failure. An entrepreneur, has to know that failure could be the starting point of success, an opportunity to start over with more knowledge and intelligence.

Outsourcing com a clau de l’èxit

outsourcing-300x156The crisis that economies in developed countries are subject to has forced companies to search for imaginative solutions to achieve their goals. Resources are increasingly limited and every effort should focus on developing competitive advantages and on strategic activities. It is right at this point that outsourcing gains importance.

In general, we can define outsourcing as subcontracting external services. In other words, it is delegating to another company, processes or activities that are not part of the core business of the company, that is, all non-strategic activities. Here is the first issue, what is a strategic activity or process? Strictly speaking, strategic implies that it generates a decisive competitive advantage, the distinctive feature that allows us to be the option chosen by our customers, what we call “order winners”, literally meaning capable of winning orders. An activity or process like this should never be outsourced, whereas “core” or central activities can be. To set an example, think of computer services in a bank. IT is a core activity, but not necessarily strategic, therefore, it can be outsourced. As you can see, there is great subjectivity regarding what is strategic and what is not and, consequently, regarding what can be outsourced. It depends on the type of company, whether it is family-run or a multinational, its origin, whether it’s Japanese, American or European, and on the economic situation, if there is a downturn or it is good. In short, there is no fixed rule.

Although I think that presently the more we outsource, the better, as it gives us flexibility and responsiveness in an unstable market, I will never argue with a company or employer not willing to outsource a process because, most likely, we can reach the same goal through different means and, in this regard, corporate culture often determines such decisions. A company can never go against their own culture. In any case, corporate culture can be gradually changed, but it can not oppose to such important decisions.

Getting back to the concept of outsourcing, assigning specific tasks to external specialists enables companies to reduce costs (infrastructure, staff, etc.), and to focus on the core business activity, hence improving productivity and competitiveness.

A proper analysis of business objectives is essential for successful outsourcing. This analysis will further require objective assessment and classification of all the company’s processes and priorities in order of importance.

Once the tasks to be outsourced are identified, the providers are assessed, and the business objectives are defined with the provider, it is important that the service hired is reliable, taking into account that the company has to control outsourced processes through management indicators. The diagram below shows the most suitable approach depending on whether the activity or process to be outsourced is auxiliary or added value.

Outsourcing-as-a-key-to-success

According to Peter Drucker, and to top it off, “Companies only have two strategic activities; innovation and marketing, you can outsource the rest.” Suffice to say that these days, and thanks to collaboration with technology centres, even innovation is outsourced.

Some key aspects to successful outsourcing

– Communication. Feedback

For successful outsourcing (and successful relationships, whether social, economic or labour), one of the most important aspects, if not the most, is fluent and ongoing two-way communication between the company and the supplier.

Confidence

This is another key aspect in any relationship. We need to assess thoroughly before starting work with a supplier, so that when the relationship begins, there is enough confidence. In this regard, the culture of the two companies, the one outsourcing and the one providing the service, should be close, at least not incompatible.

– Coordination

In order to reach the goal, it is essential to set deadlines and schedule all the activities from the start. Every outsourcing process has a critical start-up phase, which needs to be planned with project management tools so as to achieve the target cost, time and scope established initially.

– Future vision and growth

Outsourcing just because does not make sense. In order to take this step, the company should be positive that it will not only entail a reduction in costs, but it will also allow for greater productivity and competitiveness. Before outsourcing, the benefits expected should be made clear.

My practical recommendation is that we should start outsourcing simple activities that do not involve internal management issues that are complex to solve, since outsourcing is like an oil tank –if the first activities work out fine, we continue, otherwise, we stop at once and lose the enormous advantages it offers.

About the Lean philosophy

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The Lean philosophy has its origins in the 80s, when a group of experts described the concept after comparing the General Motors (GM) production processes with the Toyota Production System. The conclusion reached is that processes can be optimized by removing everything that does not create value, reducing total delivery times and searching for the automation of the activities involved in these processes.

At first, the Lean tools were designed with the aim of making production processes more efficient. However, they soon became part of the continuous improvement strategies of the service and logistics industry. Today, Lean is a working system that enables faster, more flexible work processes through the elimination of practices that generate ”waste”, by removing the so-called ”dumb” inefficiencies.

As for the contribution resulting from the implementation of Lean tools to logistics processes, ”logistics operations can generate between 10% and 40 % of the product cost and over 50% of this cost accounts for activities that do not add value. Therefore, the Lean Logistics scheme ensures agile processes by considerably reducing variation.” In logistics and operations in general, variability is something to be avoided in our processes.
Lean tools, including value maps, allow for a deep understanding of logistics processes, managing to create customer-oriented processes, reducing everything that does not add value, generating reliable knowledge and information flows throughout the chain of supply. Some of the results it entails are the reduction of delivery time, the decrease and increase of inventory turns, and a significant reduction in bad quality costs caused by materials management among others.
There are increasingly more expressions like ‘Takt time’ (an expression that combines the German word Takt, meaning rhythm, and the English word Time), which can be defined as the rate at which a product must be manufactured so as to meet customer demand. It is this cadence or rhythm that synchronizes all the activities, from production to product delivery. Supply chains are becoming more ”pull” and less ”push” (both terms having their actual meaning). We have less inventory. Ideally, we only produce a product and move it across the supply chain when we have an order from our customer. It is the customer who pulls the entire chain, going from ”push” to ”pull”. It is not companies that “push” the products to the market across the supply chain, but it is the customers who “pull” them.

Due to this paradigm shift, one of the most important aspects of current operations in general and the Lean philosophy in particular is to access information focusing on the end-customer actual demand, that such information is reliable and that it can go through all the links of the chain without reductions or amplifications, making the appropriate adjustments. The collaborative work of the entire supply chain is essential to avoid wrong predictions about the customer needs in favour of a real demand management focusing on production planning and product delivery management. Therefore, we can state that producers do not currently compete against producers, but supply chains against supply chains. In this regard, coordination between the different companies that conform every supply chain is essential to achieving both effective and profitable systems.

A better balance of the entire supply chain, a reduced turnaround time and significantly improved customer service are some of the advantages allowed by the implementation of this type of Lean philosophy in companies.

We can finally claim that staff training plays a crucial role in developing a truly reliable and effective logistics system .Employees must be trained and educated to master the methodology and the tools. The results can be surprising, but they largely depend on the employees’ commitment. In this regard, management by objectives is essential. We need a comprehensive objectives policy across the company, translating every single objective, so that each member of the organization has a goal that is measurable, close, dependable on the employee and achievable. Not everyone in the organization needs to know what the EBITDA is and how to improve it!.

In this globalized world, where the environment is constantly changing, companies that do not commit to prepare for excellence will hardly be able to compete and even survive.

CTC Outsourcing moderates the round table in the pharmaceutical sector at the Supply Chain Management Forum held in Barcelona

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The control of every process as the key to excellence in the pharmaceutical logistics chain

Barcelona (May 26th). The new European Union guidelines on drug distribution have posed a major challenge for the pharmaceutical industry. This was the center of debate for the key industry professionals taking part in the drug logistics panel held in Barcelona last May 22nd at the Supply Chain Management Forum. The forum is part of global round tables regularly organized by the Council of Supply Chain Management Professionals (CSCMP), which brings together 9,000 professionals from 67 countries.

Moderated by Ignasi Sayol, COO at CTC Externalización and executive member of the CSCMP in Spain, the forum was attended by M ª Carmen Martínez, Technical Director at Novaltia; Carlos Clemente, Manager at Disalfarm SA; Pere J. Vandellós, Manager at Inprous Logistics; and Marc Morral, Director of Supply Chain at Grupo Ferrer.

The panelists discussed their respective experiences in implementing new GDPs (Good Distribution Practices) that introduce new technical requirements. In their speeches, they delved into the challenges of managing a large number of references and formats. They also highlighted the critical importance of control in every step of the drug manufacturing process – from managing raw materials and distribution to the point of dispensing, to guarantee the quality and safety of medicines, and a fast and effective distribution to both hospitals and pharmacies.

The panel also featured a special presentation on the flexibilization of supply chain operations by Dr. David Simch-Levi, Professor of System Engineering at the Massachusetts Institute of Technology (MIT) and one of the most innovative experts in supply chain integrated management.

About CTC

CTC Externalización is part of Grupo Stock Uno, Spain’s leading company in outsourcing of industrial services, logistics, sales management and operational marketing, for the industry, service companies and specialized sectors such as the pharmaceutical. With offices in Barcelona and Madrid, Spanish delegations in 12 other cities and national coverage, more than 7,000 Grupo employees serve multiple companies in different sectors, some of them listed in the Ibex 35.

Outsourcing en el sector farmacèutic: una eina per generar avantatge competitiu

 

sector-farmaceuticoThe outsourcing of business processes is an unstoppable trend that is affecting all sectors of economic activity. It might be defined as follows: the performance by a third party of those business activities that are not part of their core business. By core activity we mean strategic activities that are a source of major competitive advantage for the company, which are the core of their business activity. Even if we can provide an accurate definition for strategic activities, each company defines differently what they consider likely to be outsourced. It depends largely on their corporate culture, whether it is a multinational or a family business, American, Japanese or European-based. Therefore, we find rivals competing in the same sector and with the same target customers, with a totally different level of outsourcing.

There is one or many reasons to outsource a business process:

– Improve costs (considering the overall cost structure of the process)

– Enhance control over the activity or process

– Simplify management (focusing on our strategic activities)

– Variabilize costs (fixed vs variable costs)

– Improve technologically

– Finance investments

– Flexibilize operation (responding to non-seasonality and peak sales)

– Increase the level of service (defining process indicators)

– Boost quality levels

Thus, outsourcing is an essential tool for growth, specialization, launch of new business units, or adaptation to technological change.

In addition to the reasons, it is important to define the level of outsourcing we intend to achieve. In this regard, we can define different levels of outsourcing depending on the objectives we pursue. In particular, we can define 3 levels of outsourcing with the following features:

1. Level 1 or low added value Outsourcing is the case where we subcontract peripheral tasks without added value for the company. We refer to ancillary activities such as cleaning, security, transport or courier services. Our aim is simply to avoid management problems and not get involved in an activity that does not bring us value. These are one-off contracts, very short-termed and without obligation of any kind.

2. Level 2 or average added value Outsourcing is the case where we subcontract activities and/or functions in order to improve the profitability of the activity. We will seek a reduction in the cost per unit and an improved service level. Here we no longer refer to peripheral activities, but to warehouse management, basic computer software, technical consulting, call centers and such. We will strive for a balance between the outsourcing contract cost and duration, within a time span of a year or longer.

3. Level 3 or high added value Outsourcing is the case where we externalize processes in order to reach full effectiveness and provide continuous added value for the subcontracting company, becoming a strategic tool for competitive advantage. In the outsourcing company we want to find an industrial partner to generate competitive advantage. In this case we talk about processes like dedicated warehouses, complete industrial processes, production and/or packaging lines, dedicated production plants and dedicated software among others. These are mid and long-term contracts with major investments.

The last important factor to define in outsourcing is where it is carried out, in premises outside the contracting company or in their facility. In many cases it may be more effective that the processes are outsourced on site, provided that the scope of the process is well-defined, as well as the ownership of the productive resources, stated with proper nouns, and other elements that need to be taken care of to make it a real outsourcing process.

Opportunities in the pharmaceutical sector

The pharmaceutical sector is an increasingly competitive sector, in which the cost and service pressure is growing. It is starting to experience the same scenario as other sectors, like the automotive, consumer electronics, and food industry. In these sectors outsourcing is a basic tool to endure market pressure. The challenge for laboratories and other companies in the industry is to manage their business processes like in these other more competitive sectors, applying their best business practices.

Outsourcing companies already working in other sectors can be a key tool for its accomplishment. In our case, at CTC Externalización SL we have extensive experience in business processes outsourcing in highly competitive sectors. Thus, we are using the models that operate in these functions in the pharmaceutical sector, where we now have several clients. Our current experience in the pharmaceutical industry includes outsourcing in the client premises (in-house projects) and also in our own facilities. Our modus operandi is similar in both cases. We apply a continuous improvement system in processes with management indicators, which results in an ongoing improvement of operations. This operating method allows for a continuous growth in the operations we manage, so that we get the most growth in our own clients, obtaining more and more business processes for them.

Other factors adding up to this approach to improving processes are our ISO certification in pharmaceutical warehouse management and an experienced qualified workforce in the sector.

In our view, outsourcing will be an important source of competitive advantage in the coming years for pharmaceutical companies who decide to use it, companies that understand its potential as an essential tool to generate competitive advantage over competitors, developing outsourcing processes with an increasingly high added value.