Speed, costs, and knowledge are critical underlying factors of supply chains. These create advantages, which make the model competitive. Another area is flexibility, which allows for risk reduction and in many cases cost minimization as well as increased speed. From the standpoint of operational processes, the two key emerging competitive advantages for global supply chains are Downstream Supply Chain Development and Increased Collaboration and Coordination.
Downstream Supply Chain Development
To look at the larger picture, downstream supply chain development is maybe not
an emerging advantage, but certainly one that companies are currently taking a
closer look at. In some cases, the recent toy industry recall is forcing this.
As supply chains become even more global, developing the downstream supply chain
is essential to reducing cost, improving speed and flexibility. Not to mention
mitigating other factors that impact the end-value provider’s brand image.
Commonly this is done by increasing knowledge resources and capabilities,
but also building longer-term development processes to ensure the core supply
chain model remains intact. We don’t need to go into a history lesson on some
well known Japanese models that utilized this strategy rather effectively.
Increased Collaboration and Coordination
Closely related, companies and industries are only starting to see the role they
play in the entire supply chain organism. This is fueling increased collaboration
and coordination. For example (a US model), the Western Growers Association created
a partnership with C.H. Robinson to improve the resource utilization of both the
industries operations and the logistics network. In China, companies are developing
centralized locations for subcontracting operations, importantly with logistics
providers involved. This greatly improves the coordination among material and
information flows, reducing costs, increasing flexibility and speed.
As supply chains achieve their competitive advantages through these procedural
processes, one must look at the details of specific operations to see what is
emerging. RFID gets a lot of press and rightly so. Advanced software and logistics
do as well. At the core however are operating systems, which dictate material,
information and financial flows. This is where the advantage comes from.