Supply chains rather than companies now compete

Barry Saxton . . . 'The idea that global supply chains increasingly compete against each other is fast becoming a reality.' SUPPLY CHAIN management has grown exponentially as an autonomous business activity in the last few years, driven by the volatility in the global economy and market conditions. Increased levels of demand for variety and service from customers, and an increasing level of commoditisation of products has resulted in more product diversity, and therefore more choice and competition. Supply chain strategy has responded to this volatile scenario by offering ways for organisations to realise greater cost reductions in manufacturing, distributing and marketing their products – and this includes redesigning distribution methods and physical networks in order to reduce stockholdings and effectively meet the customer’s stringent demands for service and quality, for example, in guaranteeing Just-In-Time delivery. These new global business conditions thus demand flexibility and responsiveness in the supply chain – an ability to communicate and plan along with customers and suppliers in order to efficiently and effectively respond to rapidly changing or niched demands for service delivery. This of course requires an outward-looking, collaborative approach for many organisations with complex, and especially global, supply chains. Such collaboration can happen between customers and suppliers, or supply chain management companies and both supplier and customer. The idea that global supply chains increasingly compete against each other, rather than the traditional view of companies in the same industry competing, is fast becoming a reality.