Gaining a Supply Chain Edge

It's a Small Supply Chain World After All

I recently returned from a seven-day trip to Europe. During that week, I stayed in five different hotels, 10 different towns, and experienced some fantastic food and several bottles of great red wine.

Let's see -- One keynote speech (check), 11 client meetings with European companies and 14 client meetings with global companies (check and double-check), and a very successful European staff leadership meeting (check!).

I wanted to share the thrust of many of my discussions and interactions that I had while on my trip:

Priority 1: Supply chain challenges result from volatility in the marketplace. How do we approach this?

*Increased emphasis on the importance of contingency planning

*More formal commitment to supplier collaboration

*Increased prioritization of supplier risk assessment

*Increased focus on SIOP

*Increased emphasis on speed, agility and flexibility

Priority 2: Globalization has an impact on organizational structure, processes and the future of business. How do we meet this challenge?

*Increased priority of eliminating regional boundaries

*Enhanced awareness and supply chain involvement in M&A

*Increased focus on optimizing global product flows and distribution network planning
*Increased awareness of growing China markets

*Greater emphasis on Total Delivered Cost of purchased goods

Priority 3: There is an increase in inventory turns and the need to capture free cash flow. How should we approach this?

*Improved business analysis and specification of inventory requirements

*Improved demand planning

*Greater emphasis on the application of inventory analysis tools

*Enhanced focus on the elimination of obsolete inventory

*Enhanced focus on product and vendor rationalization

Priority 4: There is a strong drive to reduce transportation costs. How can this best be accomplished?

*Increased focus on mode selection

*More methodical freight bidding processes

*Application of more sophisticated TMS

*Greater emphasis on Freight Audit and Payment

*Higher priority for unbundling freight on inbound purchases

The most interesting part of this list is that it is not much different from the list that would result from seven days of meetings in the U.S. And in fact, it also has a lot in common with the list that would result from a week-long visit in our Asian operations. So, one big observation and two conclusions:

Observation: While I have just explained the similarities of the "Plan-Buy-Move-Store-Sell" of the supply chain, by omission, I have not addressed the real difference in the "Make" component of the supply chain between Europe, the United States and China.

Conclusion 1: Europe and the United States are separated by a wide body of water, but very close in the challenges/opportunities being faced in the marketplace today.

Conclusion 2: China is different from Europe and the United States, but many of the supply chain challenges being addressed in Europe and the United States are not all that different from the China challenges/opportunities.

So, although it is not yet completely one world, it is a small supply chain world after all. Have you been to Europe on business lately, and if so, what are your observations about global supply chain, logistics and other business functions?

More Resources:

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Jim
Tompkins Associates

TAGS: Supply Chain
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