The old business model no longer works

Jan Lagast spoke this afternoon for the assembled guests of Packo Inox in Zedelgem. This company was celebrating its 50th anniversary in a beautiful pop-up lounge. Jan was asked to give managers in logistics, production and quality insights in the challenges that await them in food and pharma.

One of the lessons learned is that these challenges are not located inside of the factories, but all around us, right here in the context in which we will work. Fundamentally, the old business model that made us rich in the West since the 1960s is no longer applicable. For years we have been buying cheap raw materials in third world countries, adding some cheap labor on the spot, transporting that half-finished product cheaply to the rich West after which we add some expensive final labor to it. Finally we sold the end product to rich customers.

A global village

Today, rich customers are all around the world, also in Africa. In addition, the world literally becomes a big village, with on top of that the social media that send both positive and negative messages around the whole world in just a few seconds. Even the slightest mistake, made by a large company travels around the world in hours. As a company you feel the effect of that worldwide.

But on the other hand, this also opens up perspectives, because as a result of the many nutritional issues, Asians are now more interested in products from the West. With the right quality approach, it should also be possible for our (expensive) Western companies to win over (rich) customers in former third-world countries.