What is in this article?:
As the world has gotten flatter and supply chains have gotten longer, the need for companies to follow best practices in global supply chain management has intensified.
Globalization is one of those politically charged words that often implies more than it actually means. From the relatively benign “the world is flat” philosophy that suggests offshore factories help stimulate U.S. imports, to the “offshoring costs American jobs” idea that everything can and should be made in the United States, everybody in manufacturing has an opinion on whether globalization is good or bad for their companies and/or their fellow citizens.
Some might suggest, in fact, that globalization is a fait accompli. As Daniel Akerson, chairman and CEO of General Motors Co. (IW 500/4) pointed out at a news conference in 2011, seven out of 10 of all GM vehicles are made outside the United States, and the trend shows no signs of stopping.
There’s nothing very new about globalization, though, a concept that basically refers to the practice of sourcing, manufacturing, transporting and distributing products outside of your native country. Its modern application predates the rise of the Internet by a good 40 years, beginning in the early 1950s when container shipping was introduced, making it possible to quickly, efficiently and economically move entire container loads onto ocean vessels at ports of call throughout the world.
As the world has gotten flatter and supply chains have gotten longer, the need for companies to follow best practices in global supply chain management has intensified. Gary Miller has a deep familiarity with such a role, having spent 40 years as vice president, global supply chain and chief procurement officer with $23 billion tire manufacturer Goodyear Tire and Rubber Co. (IW 500/54) before taking on the same role in 2008 at A. Schulman Inc. (IW 500/343), a $2.5 billion plastics manufacturer. As Miller explains it, he’s responsible for Schulman’s supply chain and procurement activities to better leverage its worldwide purchasing power, reduce materials inventories, eliminate waste and improve efficiency. The company has 35 facilities globally, with nearly 70% of its revenues derived out of the European market.
“We have global customers that we service around the world,” he says. “Europe is a very large region for us, so we have deep relationships with our customers there. As those customers expand around the world, they’re also looking for us to come with them.”
For instance, Schulman has some large customers in the German automotive market who are opening facilities in China. Consequently, Schulman is following its customers into China to manufacture and supply the same plastics products that are being used in Germany. “Now we can continue to supply them our products from Germany if we want to, but the advantage is that if they’re in China and we have manufacturing in China, then we can transfer our manufacturing technology to China and provide those parts on a local basis. It’s much better for our customers because they get our products with a much shorter supply chain. It’s much better for us because we can get our products to the customer with a shorter supply chain as well.”