Visit Our Sponsors
The need to source and sell product in multiple parts of the globe has created "a vast amount of challenges," says Bonebrake. Companies must wrestle with the complexities of sourcing from new countries and selling into new markets. To achieve that goal, Tompkins recommends that they align their supply chains with their overall business strategy. "It helps to define the path to ensure that they’re doing the most important things first," she says.
Two major factors have led to the global dispersal of supply chains in recent years, Bonebrake says. One is the fact that many companies are searching for revenue growth in new markets. In the process, they run into many unexpected developments, as in the case of Target’s initial incursion into Canada.
The second factor is the growing availability of electronic-commerce marketplaces, as evidenced most recently by the initial public offering of China’s Alibaba. “Even small companies that never contemplated being able to sell products globally now find that they’re able to do so,” says Bonebrake. However, “new markets create new supply-chain challenges.”
How can companies align supply-chain and corporate strategies? Bonebrake offered the example of a retailer that has adopted the strategy of next-day delivery for all of its e-commerce orders. That won’t work if the company’s distribution model relies on a single e-commerce warehouse. Under such a scenario, “it’s going to be very expensive and not very practical to deliver next day to everyone in the country,” she says. “The logistics of matching to marketplace expectations have to be in synch.”
Yet another example of the need for alignment focuses on the segmentation of products and channels. Say the company has decided to target a particular channel, or most profitable product, as its highest growth opportunity. The entire logistics system has to be designed to meet that strategy.
Outsourcing continues to be an answer to the globalization of supply chains. The trend flattened out or took a dip during the recession, Bonebrake says, but growth in that area is now returning. What’s different now are the requirements of customers for greater agility and flexibility than ever before. “They need solutions from 3PLs that enable them to quickly adapt their supply chains,” she says.
To view the video in its entirety, click here
Enjoy curated articles directly to your inbox.