We don’t always look at every aspect of the supply chain as a chance to improve our companies. Managing product flow tends to produce tunnel vision: companies see the raw materials enter the system, see products as they are created and lose sight after shipment. Some recent issues have become more important than ever in corporate supply chain management: Going Global and Going Green.
First, we’ll talk about some issues with going global. “The world is getting smaller” is a euphemism for the ease and speed with which people and products can travel the globe. Communication is now instantly worldwide. It is more important every year that manufacturers and distributors get deeply involved in import and export overseas.
Still, in many cases, companies are trying to create products using as many domestic supplies as possible. They want metals mined and refined in the U.S. Many want only domestic end products. The best method is to buy from as many diverse areas as possible. As long as procurement follows best practices and continuous improvement plans, buy the best, in time and at the best price.
Companies that can blend their procurement strategies to buy both foreign and domestic, in the right quantities and at the right time, reinforce their supply chains in two ways. First, they create and maintain a broad avenue of availability. The more choices they have, the better they can negotiate and keep tight deadlines. Second, they satisfy a political dilemma, in their corporate culture and within the view of their customers. Many domestic customers want domestically produced items; many global customers prefer outsourced parts and products. Mix price into all this and it becomes obvious that the more potential suppliers one has, the better.
Global procurement could open global markets. Using the supply chain to boost marketing efforts is a wise and well used device. Marketers will say that your best supplier could become your best customer, or refer you to potential good clients. This does not mean doing anything underhanded. It is simply good business to broaden sales to a wide variety of nations around the world, and if your suppliers are in Beijing or New Delhi, the potential new customer base could be huge.
Green and sustainable manufacturing practices are gathering steam in the worldwide marketplace. While international treaties seem to be difficult to pass and monitor, individual companies are breaking through some barriers. But going green in manufacturing can be a huge cost saver and corporate publicity boon.
Here’s a simple example that worked for the largest retailer in the world. When an environmental representative convinced Walmart their Chinese-purchased toy trucks were packaged with far too much cardboard, the company agreed to look at packaging overall. They found thousands of over-packaged products, went on a serious savings campaign with suppliers and saved billions of dollars yearly. The key? Walmart saved big but so did every supplier and their sub-suppliers.
The side effects were all good. The company was able to publicize that they reduced trash by thousands of tons per month. That project kicked off plans for other “green” options, not only in their sourced products but in their stores and transportation. As continuous improvement, which is critical in all supply chains, Walmart included all its executives and managers in finding and reducing pollution waste.
Not every process in manufacturing and distribution can be green, but every process can be improved, Whether going global or going green, every company should remember that change for the better takes hard work and determination. Every improvement, every bit of eliminated waste and saved time, contributes to positive supply chain management.
Operations Manager.com Supply chain specialist