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Article:
Is Your Supply
Chain Partnered?
The Web
offers your supply chain enormous potential
and entirely new methods for streamlined
coordination between your business and
channel partners, including third- and
fourth-party providers.
Put simply,
the Internet enhances supply chain
performance and supply chain is crucial to
your e-commerce success. As the supply chain
evolves in the information age, the
Internets capability to support tight
coordination between business and channel
partners means that all the information,
transactions, and decisions that are the
essence of synchronized supply chains will
flow through the Web. Using the Internet to
connect the systems of your supply chain
partners will become the medium through
which the essential processes of managing
and synchronizing your supply chains are
carried out.
This has
become necessary due to customers’ ever
increasing demands. Customers whether they
are business customers or individual
consumers are looking beyond cost as the
sole arbiter of value. They are demanding
innovation and personalization of not only
the products but of the associated service
and delivery.
Supply
chains in all industries are encountering
new requirements for competition in the
e-business environment, characterized by
mass customization, massive scalability,
faster and more flexible fulfillment and the
ability to develop new channels that attract
and serve larger customer bases. Traditional
supply chain initiatives alone, such as
strategic sourcing, contract manufacturing
and joint product development do not
sufficiently prepare organizations for
eBusiness competition.
As you know,
in the traditional supply chain, buying and
selling materials means establishing long
term relationships with vendors,
distributors and retailers, with multiple
inventory sites, long lead-times and fixed
margins. Yet today, the marketplace, being
the oldest of all business activities, is
being reinvented. Companies can now buy and
sell across a wide spectrum of emerging
Internet enabled marketplaces.
This
traditional approach will no longer be
enough to continue to compete, what with
shrinking product lifecycles that requires
you to partner with customers and a broader
range of suppliers to better customize
product to those customers demands in
substantially reduced time-to-market
periods.
The message
of the Internet-enabled supply chain is that
the Internet will not replace supply chain
management. Rather, it is an incredible
medium that allows supply chain activities
to be carried out in a truly synchronized
fashion. Internet enabled tools and
solutions allow development of cost
efficient, service effective supply chains.
However, speed is the key capability that
defines the new supply chain in the Internet
age. Speed, cost reductions, and customer
service are all impacted by availability.
This will be
accomplished through better information to
manage product flows from orders being
placed online by your sales agents, call
centers and clients to reducing inventory by
outsourcing fulfillment and by greater
collaboration between your supply chain
partners to increase speed and flexibility,
and the ability to create entirely new
supply chain operations in conjunction with
e-mediary deals.
Unfortunately, many companies continue to
focus on improving supply chain performance
by reducing costs and/or improving customer
service. While effective for certain
traditional channels and markets, the
Internet enabled supply chain requires a
whole new approach to gaining and sustaining
competitive advantage. Consider what your
core competencies are and seek out
third-party providers to use in such areas
as call centers, manufacturing and
logistics. Be agile, be innovative and above
all – partner. -
John Shenton - February, 2003
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