Globalization is complex, but it doesn’t have to be complicated.
By Mark Woodward, president and CEO, E2open
“It has been said that arguing against globalization is like arguing against the laws of gravity.” – Kofi Annan
In today’s world, we can resist globalization about as readily as we can resist the downward pull of gravity. We may try—with our Icarian wings and desperate toning and tightening at the gym—but the Newtonian law remains: what goes up, will assuredly come back down.
And so it has become with globalization, an inevitable force of nature, “flattening” our world and forcing us to think and act internationally.
Nowadays, global outsourcing and distributed manufacturing environments are pervasive. What this means for the supply chain is that it involves more players in more parts of the world, each with different languages, processes, and protocols. To make matters more complicated, consumer demand is anything but constant—fluctuating according to perplexing “natural laws” of its own.
The supply chain—like the global economy—has undergone drastic change in the past decade, setting new requirements for effective management of global demand-supply network processes. For many, it is a logistics nightmare, and solving these challenges is defeating some of the largest corporations in the world.
But change—and even economic recession—doesn’t necessarily mean corporate disaster. Some industry leaders have responded intelligently, adapting their systems and processes to accommodate an increasingly outsourced, complex value network. They’ve recognized that the supply chains of the twentieth century are no longer, and that their technologies had better reflect that change.
Future Proofing the Supply Chain
Just as gravity is responsible for keeping our galaxy’s planets in orbit, visibility, collaboration, and control are now the crucial elements in effectively balancing demand with supply. And some companies are getting it. One multi-billion dollar corporation in the high tech sector has been riding the wave of new demand-supply network technology with marked success.
As the discombobulated offspring of two industry giants, this company was not only determined to keep its head above water in the current climate, it was also committed to investing its resources in the future health of its supply chain. What was once a disjointed, manually-based supply chain is today a shining example of demand-supply network efficiency and intelligence.
So how’d they get there? Gradually. But with enough executive foresight and dedication to make a long-term supply chain strategy actually work. And by “work” I mean a supply chain that is wholly adapted to today’s global, networked, automated world.
Four easy steps to get your supply chain functioning as effectively as our exemplar’s? Not quite, but I’ve whittled my list of the company’s key demand-supply network achievements down to a digestible bunch. And it’s certainly a good place to start.
- To reach its supply chain goals, the newly created high tech firm had to connect to its trading partners and customers; this was accomplished via a single on-demand virtual platform.
- Once connected, our high tech company leveraged its on-demand technology to enable near real-time collaboration and data exchange—making it possible to “see” a dynamic picture of the ever-changing value network.
- The company’s abilities to connect and collaborate with trading partners, though, were only advantageous because its network processes were sufficiently flexible to catch and respond to issues before they became financial liabilities (correct mismatches in supply and demand or reroute inventory mid-transit, for example).
- And what this all boils down to is actionable insight. This company has remained competitive despite an economic recession because it is equipped with an information system that provides a “single version of the truth,” in addition to the data and analytics necessary to make informed, strategic decisions.
What’s required of your company is the same thing that was required of our case study—a shift in focus. On-premise is out; on-demand is in. Supply that dictates demand? I don’t think so. Let’s face it, demand may be fickle—even stingy—but it will always be boss. The natural laws of the universe are at it again…But darn! If only what went down would so assuredly come back up.
Woodard is president and CEO of E2open, a Foster City, Calif.-based company that offers software-as-a-service solutions to help corporate clients manage their global demand-supply networks.