Gaining a Supply Chain Edge

Our Mighty Global Supply Chains Play the Hero and the Villain in Economic Recession

I recently began a four-part series of podcasts on your post-recession return to recovery, growth and prosperity.

In the first podcast, "The Great Comeback, Part One: Responding to the Recession," one of issues that I discuss is the role that our highly efficient supply chains have played in the recessionary cycle. For the first time ever, could it be that global supply chains actually helped accelerate the economic downturn? I think so.

When the U.S. economic situation went into meltdown in 2008, the entire world felt the effects almost immediately. The recession went global as imports and exports shrunk everywhere. I believe that this worldwide impact was the result of the global integration and connectivity of supply chains today.

If that is so, then we should have had plenty of warning. We have been living in various eras of globalization all the way back to 1492, according to the author of The World is Flat, Thomas Friedman. That year, of course, is when Columbus set sail for the West Indies. Friedman calls that event Globalization 1.0, followed up by innovations made between the 19th and 20th centuries such as electricity, phones, fiber optics, and the Internet Globalization 2.0.

The current era, Globalization 3.0, is where we are today. Friedman defines this 3.0 era with the collaboration and competition we are now able to participate in globally due to innovations in software and communications. I think the global supply chain is a part of what makes it a new era as well.

Globalization is created through human innovation, such as the discoveries and revelations Friedman points out. The world has been shrinking for generations, and with Internet software and communications, it seems to get smaller by the minute.

Just as globalization and global supply chains were a factor in the recession's spread being more rapid worldwide, it will also help it end faster. I believe the global supply chain currently is and will continue to be a key factor in recovery from this recession. As consumer confidence returns, companies that are the best prepared will have busy global supply chains in place all over the world to meet the demands of the market while staying efficient and hitting benchmarks.

It is important that all business leaders and managers be prepared for this situation, as the benchmarking of the supply chain will be a big factor in how competitive a company will be in the post-recession market. The economic bottoming-out of some industries such as pharmaceuticals, food and beverage, and inexpensive consumer electronics has already begun, and these companies are leading the Great Comeback.

To listen to this podcast, or to see the text transcript, click here


I would be very interested in your thoughts on the connection between supercharged, global supply chains and economic recovery. What has your experience been and what are your predictions?

Jim
Tompkins Associates

TAGS: Supply Chain
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