The supply chain cultural shift
Complex, extended and outsourced manufacturing processes require closer collaboration between partners across the supply chain; trust and simple information sharing will be key to this
Supply chain management (SCM) as a topic of conversation comes close to being the fastest way to induce narcolepsy. It is very difficult to explain precisely what supply chain management is, aside from various 'woolly' definitions about the science of getting 'the right products to the right place at the right time'. On the face of it, this is hardly a phrase that indicates a discipline that is vital, complex and in some cases quite exciting.
As an example, with the prevailing interrelationship between technology and physical logistics, a long-term breakdown in the national communications infrastructure would cause serious food shortages. This is because the synchronised replenishment of supermarkets and shopping centres ensures that 'in store' stocks are kept at minimum levels, secure in the knowledge that they will be replenished several times during the day. Such sequencing depends on an elaborate choreography involving computer systems, telecommunications networks and physical assets such as distribution centres and vehicles.
And this is only the beginning.
Pretty soon all physical products will be the result of a complex, outsourced manufacturing process, entirely dependant upon agile and adaptable supply chain networks. This trend has been evolving over the past 20 years and is driven by the desire for customised, personalised and configurable products. This shift away from the mass-produced, 'push it out into the market' approach that originated with pioneers such as Henry Ford, will have a profound impact on society.
Surprisingly, although technology will be the enabler of this transformation, the most important factor will be the shift in culture and habit necessary to engender true trading partner collaboration. Issues such as trust, information sharing and the development of relationship networks, will be the critical factors for success. Competitive advantage will naturally depend on product design, quality and brand image, but it will also result from the agility and flexibility of the supporting supply chain network.
A brief illustration of how this might manifest itself can be seen in some of the manufacturing processes found in the high tech industry. Increasingly, product design is the result of joint collaboration irrespective of the geographic location of the designers themselves. They will often factor into the design process, the availability of components, likely manufacturing locations and product life cycle before the next iteration. At every stage in the process, technology is used to support the activity in hand and in some instances, systems are interconnected to automate the process. We are still some way from linking all of these 'flows' into seamless operations, but the trend is clear.