There’s no denying it. Global trade matters immensely. It creates job, fosters growth, increases the standard of living in poor countries, and promotes economic and political stability. And while countries and companies push exports to create jobs and generate revenues in new markets, even imports hold value by lowering consumer prices, keeping interest rates and inflation low, and exerting competitive pressures on the market.
As international business has increased, so has the importance of the supply chain as a source of enhanced customer intimacy and competitive advantage. If that sounds radically different from the way things used to be viewed, you’re right. In years past, the functions of the supply chain-how and where parts are procured and shipped to the end user- were viewed as no strategic cost centers whose sole function was to generate savings. Not anymore, Today, smart companies realize that properly managed supply chains have the power to drastically lower costs, decrease cycle times in bringing new products to market, increase customer satisfaction, and better manage uncertainly through increased flexibility.
UPS, in collaboration with Harvard Business School Publishing, has been exploring the growing strategic value of synchronized supply chains through a series of international symposia called Longitudes.
One notable participant at the conference is Victor K. Fung chairman of Li & Fung, Hong Kong’s largest trading company. Li & Fung manages a virtual network of more than 5,000 suppliers across 40 countries. The company, which boasts, annual revenues of $5.5 billion, is often cited as an example of the supply chain of the future. He understands that his company’s success and agility comes from continually refining a network of suppliers across the globe. These partners are tapped for specific projects based on their expertise, availability, and cost. For example, when producing clothing, Fung explains that the yarn could come from one supplier, be woven and dyed by another, and be cut and sew by a third party.
Synchronized commerce takes supply-chain management to the next level. In its best form, it means coordinating all the steps of producing and delivering a product to the end user. Michael Eskew, chairman and CEO of UPS, runs a $36.6 billion global enterprise whose mandate is to help its customers get their goods all over the globe as quickly and efficiently as possible. He has seen firsthand, through UPS customers, that companies engaged in international trade must now navigate geopolitical tensions, disruptive technologies, emerging economies, new consumer expectations, and demographic shifts.
Within his own organization, Eskew and his management team are constantly working on developing the flexibility to overcome any on of these obstacles, all in an effort to better serve UPS customers. Not surprisingly, he has been an early and vocal proponent of synchronized commerce as one of the most important business strategies for the 21s century. says Eskew. “Through synchronized commerce, we have the opportunity to move from the operational efficiency stage of the supply chain to the customer intimacy stage- the strategic high ground.
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