From Managing the Supply Chain to Orchestrating a Global Operating Network

Dec. 29, 2009
Rather than 'managing' the supply chain, companies need to deftly 'orchestrate' its many interconnected resources and participants.

The classic concept of the supply chain is fast becoming obsolete. Chains tend to be cumbersome and over-engineered -- hardly the right metaphor for today's highly fluid, dispersed global marketplace. A far better image for the 21st century is a global operational web or network. And rather than 'managing' it, today's savvy business executives need to deftly 'orchestrate' its many interconnected resources and participants as they seek the optimal way to go to market.

Configuring and orchestrating a global operational network enables businesses to operate with speed and agility, accessing specialized design talent, manufacturing in remote low-cost environments, distributing with close-to-the-customer efficiency, getting to market faster with innovative products and services and, ultimately, limiting the need for building and maintaining a costly physical infrastructure.

Here are seven success principles for effectively 'orchestrating' a global operational network:

  1. Involving Partners Early
    Many companies wait too long to involve key supply chain participants. However, by including select resource partners at the earliest stages of concept development, businesses can benefit from the insights, ideas and experience that these firms offer.
  2. Transparency Via Technology
    Critical to effective orchestration of a global operational network is a technology platform that affords the 'conductor' a comprehensive, fully transparent and real-time view of all participating resources and activities. For example, a built-in alerting system should proactively flag emerging problems or delays, while confirming delivery of scheduled deliverables. Importantly, this platform should give all players throughout the network a tailored, comprehensive a view of the total operational picture.
  3. Networking Across the Network
    Often lost in traditional supply chain models is the ability for geographically dispersed individuals to collaborate and contribute insights, ideas, suggestions and concerns. Robust collaboration capabilities and tools embedded in the technology platform are invaluable for tapping into, sharing and orchestrating the immense design, manufacturing and logistics expertise that exists across a global operational network of people and processes.
  4. Modeling for Momentum
    The beauty of a technology-enabled operational network is the constant ability to capture data and extract business intelligence to enhance performance. Data captured efficiently can be mined and modeled to facilitate smarter decisions about timing, scaling and managing the business for maximum momentum.
  5. Relationships Really Matter
    Relationships -- local, personal, trusting ones -- really matter in a global operational network. Bridging cultural differences and understanding local work customs are key requirements for success. For example, product specifications often must be reinterpreted for manufacturers to ensure they fully understand design requirements, production tolerances, acceptable substitutions and product nuances. It takes time to develop deep business relationships with distant suppliers. Consequently, many companies benefit from working with and through experienced network orchestrators that have built these relationships over time.
  6. An Adaptive Infrastructure
    In an 'asset-light' operating environment, design, manufacturing and distribution infrastructure can constantly adapt to changing marketplace needs. This agile type of operating model completely changes how companies conceive their businesses, more quickly develop their product offerings and tap emerging market opportunities. Business planning cycles can shift from the historic annual perspective to a rolling model that is far more flexible and responsive.
  7. Global Product Lifecycle Management
    The global operating network model is ideal for managing the complete lifecycle of a product as a continuum -- from its earliest design stages, through its testing and manufacture, to its distribution to end-users, to its ultimate recycling or disposal upon obsolescence. Because it views the product lifecycle as a whole, this model enables companies to identify and efficiently tap the right resources in the right locations at each stage of a product's life.

Simon O'Keeffe is Vice President, Strategy & Marketing for Advanced Innovations. Advanced Innovations is an international provider of electronics product design, manufacturing and supply chain solutions to Original Equipment Manufacturers (OEMs).

Interested in information related to this topic? Subscribe to our weekly Value-chain eNewsletter.

Popular Sponsored Recommendations

Voice your opinion!

To join the conversation, and become an exclusive member of IndustryWeek, create an account today!