Building a Competitive Supply Chain
More companies, particularly in the high-tech sector, now look to the supply chain to achieve a strategic advantage over competitors, according to EBN Editor in Chief Bolaji Ojo.
“Nowadays all segments of the high-tech sector try to fashion supply chain systems with the distinct characteristics needed to win,” he writes. “In recent interviews across the electronics landscape, component suppliers, distributors, OEMs, contract manufacturers, and even independent design firms have confirmed that internal supply chain organizations have been elevated to apex status as the secret sauce for companies like Apple Inc. has become clear.”
What does this mean for supply chain management? Ojo studied industry reports to create a fairly-lengthy list of key characteristics shared by competitive supply chains. Among the key characteristics he identified are:
- Agility/responsiveness
- Competency and speed
- Inventory optimization
- Stakeholder collaboration
- Forward and reverse logistics
- Simplicity
- Innovation
The list also includes a number of on-going issues you’ll have to address if you want to build a competitive supply chain, including:
- Sustainability
- Effective risk management and mitigation
- Strategic fit
- Continual improvement, Lean or Total Quality Management practices
At B2B.com, we’ve already shared our thoughts on what companies need to do to Supercharge their Supply Chains, and many of our ideas overlap with Ojo’s list.
In a similar vein, Dean Vella of the University of San Fracisco and Bisk Education recently wrote a guest post on the Strategic Sourceror highlighting three supply chain management trends companies are pursuing to streamline supply chains:
- Strategic purchasing, which means finding that balance between storing too much inventory or product and storing too little.
- Bottleneck purchases, which means investing in those big purchases — IT systems, integration solutions, equipment or other long-term assets — before it creates a bottleneck in your process.
- Collaborating and connected sourcing. We’ve discussed the need for supplier/buyer collaboration before at B2B.com, and it looks like Vella agrees.
“With the increasing globalization of the marketplace, collaboration and connected sourcing are two of the most critical aspects of a lean supply chain,” Vella writes. “Working with their suppliers, organizations can spotlight process redundancies, introduce metrics to measure improvements, and seek buy-in from employees and partners at every link along the supply chain.”
We welcome your thoughts on what it takes to build a competitive supply chain.
Manuel Aragon — August 16 8:20pm
THE TOTAL LOGISTICS TIMELINE (TL2)
The Total Logistics Time Line (TL2) is defined by the number of hours that elapse from the time the raw materials or intellectual property are shipped by the first suppliers until the time the product reaches the consumer. The TL2 travels through the intermediate customers that lie in the logistics corridor toward the final consumer. For optimum efficiency each advance along the TL2 requires the perfect execution of each process, moving steadily toward order fulfillment in keeping with Ishikawa’s dictum that “the next process is your customer”. Process mapping, metrics, modifications and monitoring will identify potential time saving TL2 measures. Shortening the TL2 through improved efficiency will accelerate your working capital reinvestment cycle.
Maurice — January 1 1:14pm
This idea of supply chain vesrus supply chain really does not make much sense to me either. I think that if two firms had none of their suppliers and none of their customers in common, then we could talk about S.C. vs. S.C. Otherwise this seems just like a sloppy idea by some people who did not really think this all the way through.By the way Arni, I just came across this blog by accident and I found it pretty interesting. I did my undergraduate and MBA at Nevada and worked with Dale.-Rudi
Gordon Macgregor — August 17 7:25am
Hi Loraine,
Nice, compact, article!
I would be willing to bet that most competitive supply chains have an underlying set of complete and understood master data. Those companies without such a basic foundation may find their supply chains difficult to manage, at best.
Best regards
Gordon