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07 November 2017

Achieving the Integrated Global Supply Chain

The integrated global supply chain exists when activities between all supply chain partners are seamlessly coordinated to achieve the optimal results for all its participants. These partners are executives, managers, co-workers, suppliers, customers, carriers, 3PLs, warehouses, government agencies, financial institutions, etc. They exist not only within the four walls of the organization, but outside of it, too. The results are achieved when extraneous costs are removed and product can optimally move from source to end-user with minimal friction.

Is a fully integrated global supply chain achievable? Probably not. It would require that all actors up and down the supply chain be structured to achieve this end, and by the nature of the business, this is likely not going to happen. At least not in a timeframe acceptable to you.

So, should companies strive to create their own integrated global supply chains? The answer is an unequivocal YES.


Four Foundational Ingredients Necessary to Create an Integrated Global Supply Chain:

1. Acknowledge that integrating global supply chain activity is possible well beyond the current practice and has a real, measurable, and meaningful impact on the overall health of the organization. There are many points of friction within the global supply chain because of the inherent nature of competing interests among the all the actors, the lack of coordination and collaboration between the actors, and the opportunity for dislocation of activity. At each point of friction, costs are incurred and organizational value diminished.

2. Understand that removing friction between the transactional parties improves the flow of product. Removing the friction across the global supply chain requires a holistic approach to the supply chain. No activity or transaction in the global supply chain is independent and therefore should not be treated that way.

3. Recognize that underpinning the transaction (physical and financial) activity in the global supply chain is information. Eliminating the transactional friction is achieved through shared information among all related parties. Every activity requires information that either precedes or follows it. When information is missing, at any point in the supply chain, transactional friction is increased and value lost. The more seamlessly that information is shared, the more frictionless the supply chain.

4. Influence that which is in your power. It is mission critical to get “vision” buy-in from leaders of the organization’s global supply chain practice. This is true whether the organization is a small/medium organization or a Fortune 100 company. The driver for the vision must be a person that has responsibility for the global supply chain and can envision the benefits and sell the vision and benefits to the “powers” within the organization. While you might not be the decision maker, you do have the ability to influence the behavior of others.


Five Basic Hurdles to Overcome When Creating an Integrated Global Supply Chain:

1. All corporate global supply chain activity is done in organizational silos that don’t communicate with one another.

2. Communication between organizations is often uncoordinated and incomplete.

3. Information, the essence of communication, is siloed, reflecting the physical world.

4. The volume of information is huge, and increasing, such that it is impossible to manage it effectively with current (read: legacy) systems.

5. No holistic strategy exists to achieving one global supply chain platform.


Source : http://www.supplychainbrief.com/?open-article-id=7472175&article-title=achieving-the-integrated-global-supply-chain&blog-domain=supplychainnetwork.com&blog-title=supply-chain-network