In July’s quarterly presentation
before the House and Senate finance committees Alan Greenspan
discussed value-added economies when pressed to debate the
relevance of manufacturing jobs in the U.S. economy. He
referred to increased globalization of manufacturing as a
reality and deemphasized the concern some had for
manufacturing job loss in the U.S. Instead, he highlighted the
value realized from technology and skilled workers. While it
is sometimes difficult to summarize Mr. Greenspan’s comments,
the point was clear. American companies can compete globally
using these strengths.
Global competitiveness,
regardless of the industry or size of the organization,
depends on an effective and efficient supply chain. The good
news is there’s a place for all types of providers of goods
and/or services as long as the supply chain capitalizes on the
synergies of its members. In other words it doesn’t matter
where it’s built as long as it gets to the customer when they
want it, with the features they want, at a price they’re
willing to pay. One of the best ways to do that is to
emphasize the synergy through supply chain
collaboration.
Collaboration is critical for a supply
chain to develop and maintain a common focus of serving the
customer with the fastest response at the lowest possible cost
and the highest quality.
We at SSI describe three
collaboration opportunities in an effective supply chain:
consequential, parallel, and strategic. The consequential
collaborations are those that directly affect the flow of
product through the value chain (another term for supply
chain but with emphasis on the value added parts). These
include Inventory Management, Master Scheduling and Bottleneck
Management. These must work in harmony based on synchronized
product flow paths and balanced capacities. It’s a day-to-day
focus for everyone in every operation in the supply chain.
Collectively the question to answer is, “Did I serve the
customer today?”
Parallel collaborations are those
related to continuous improvement and sustainability. These
include Performance Metrics, Design-for-Manufacture, Six Sigma
and ISO 9000-2002 or TS16949. These are the basis for open and
proactive efforts that create lasting improvements the
customer recognizes. Here the question is, “Did I serve the
customer better today than I did yesterday?”
Strategic
collaboration opportunities relate to transparency of purpose
and focus. Consequential and parallel collaborations are
dependent on information and timing. But for these to work the
organization and culture must provide a climate of
transparency through openness and a willingness to share.
Shared costs, labor distribution, training and outsourcing
decisions are just a few of the strategic collaboration
opportunities. The alignment of purpose for the supply chain
is critical. Strategic collaboration should answer the
question, “Are we doing the right thing for our business while
we do the right thing for the supply chain?”
It’s
unrealistic to assume individual companies within the supply
chain will forego their own selfish best interests of making
money, growing the business and surviving. Developing trust
requires a conscious effort to overcome some deeply ingrained
hurdles.
In our experience, finding ways to collaborate
in the context of the global supply chain is one of
leadership’s greatest challenges. It can be done. However, it
often requires more than getting rid of long term legacies
such as inflexible practices, redundant processes, outdated
equipment, and functions that simply aren’t relevant in the
twenty-first century. It requires an organizational and
cultural shift in focus to synergize the supply chain
strengths.
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