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Bruce Proctor, head of global trade services for JPMorgan Chase says that supply chain integration is quite a popular topic these days for good reason: the definition of supply chain management has evolved and matured to encompass more than the physical movement of product, the ongoing process improvements related to simplified sourcing, the faster transportation of raw materials and finished goods, and the fine tuning of just-in-time inventory practices.
Indeed, supply chain integration has assumed a much broader importance in the commercial world, with corporate treasurers, government officials, technology providers, bankers and logistics and WMS professionals all sharing a critical interest in the many facets of the worldwide flow of goods and services. Enter the role of technology. Technology providers in the supply chain industry today find themselves with a tremendous opportunity to meet rising market demand for solutions that improve supply chain functionality and flexibility. However, given the pace of change in industry requirements and the demands for rapid global deployment of operational technology, these firms will need to commit substantial amounts of human and financial capital to the development and implementation of both software and hardware tools to meet critical customer requirements on a worldwide basis.
While there are many players in supply chain management, including the financial industry, logistics companies remain the most obvious players on the scene. Logistics providers have been pushed by their customers to vertically integrate their services and adopt greater levels of interoperability among the whole range of industry participants. Faced with increased technical demands from clients and a rapidly growing roster of regulatory and legal stipulations to which they must adhere, many logistics firms have sought to obtain needed capabilities and achieve greater operational scale through mergers, cooperative arrangements and functional integration-much of it through integrates software programs.
Service providers who are able to understand the details of a client's business flows and to anticipate emerging requirements across a company's operational spectrum will be rewarded with an increasing share of their customers' trade wallets. A failure to adapt to these changing needs will result in continuing price pressure and a commoditization of their products and services.
All of the key participants need to provide critical insight into this subject, as well as challenging each other to continually re-examine their contribution to the business value chain. When this overall process works well, it's practically transparent; when it doesn't, it can be confusing, costly and difficult to correct. All of us have a major stake in ensuring that this integration initiative is successful.
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