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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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