[photopress:John_Mentzer.jpg,full,alignright]Outsourcing has created complex supply chains spanning the globe making it more difficult for logistics operators. This was a constant theme with logistics company executives attending the recent Council of Supply Chain Management Professionals (CSCMP) conference in Tianjin.
John Mentzer, professor of Logistics and Supply Chain Management at the University of Tennessee, said, ‘In today’s world it is common for commodities to be designed in Singapore, made in China, shipped to Hamburg or Los Angeles, and distributed to Europe or North America. Often, garments made in China have to reflect the latest varieties, even for Turkey and India as well, in a matter of days.’
He gave an example of sorting out the complexity from a study carried out by a company. The company found that 90% of its sales were accounted for by 11 retailers while the remaining 10% was accounted for by some 10,000 retailers. (This sounds like a version of the Pareto principle.)
Jeff Zhou, solutions director for Greater China of E2OPEN said, ‘The supply chain needs more coordination among suppliers, just like the close relationship of production and marketing within a supplier.’
Lisa Harrington, principal of US-based Harrington Associates, pointed out that many supply chain companies do not pay enough attention to their network efficiency globally.
Suppliers should consider whether the freighter will take off as planned, and have a full understanding of customer needs instead of taking a random approach. She said, ‘Sometimes time is more important than costs while other times it’s the opposite.’
The executives were unanimous on the use of technology, which can help locate the best supply point of the chain. They were of the opinion that the whole chain should have its own frame and raise the visibility of information to be shared as soon as possible by all partners, including second and third-level businesses in the chain.
Source: Cargonews Asia