Written by Denise Oakley, International Marketing Manager, GXS
Companies are accelerating their expansion ambitions, looking to capture new sales growth away from home in new geographies that are demonstrating rapid growth. While the opportunities far outweigh the threats there are challenges in managing a global or multi-country enterprise.
ONE: Global supply chains need to be both agile AND robust
A global supply chain needs to be agile enough to react and serve multiple markets, depending on business needs, but it must also be robust enough to withstand changing local demands.
Under increasing pressure to buy globally, but think locally, many companies are finding a need to balance global aspirations with increasing consumer demand to reduce product-level mileage in the supply chain. This has been particularly prevalent in FMCG, one such example is where growing consumer demand for an ethical approach is reshaping the way supermarkets and clothing retailers manage their suppliers across the supply chain.
At the same time, however, consumers expect to see an ever-increasing range of goods available for them to choose from, driving demand for supply chain development that includes near sourcing.
Supply chains need to be more dynamic and move away from the traditional push and pull model, need to be more responsive to customers not just in terms of products, but sourcing, manufacturing, transport, animal and environmental welfare, and treatment of employees.
It’s a big ask, so no wonder my top tip number 1 is an agile, robust global supply chain.
TWO: Traditional IT systems struggle with complex, extended supply chains
No company can grow faster than its supply chain infrastructure, so knowing the effective range or limitations of your supply chain, is critical to expanding.
In much the same way that IT has helped to enable companies to source goods on a global scale, those same supply chains now need to manage the complexities of distributing not just westwards but to locations all around the world.
There are different approaches to achieve this, from working domestically within foreign countries, direct or in an extended way, or enabling a truly global, operation using a complex network of hub and spoke fulfilment.
Making everything speak the same “language” in a supply chain that is both flexible and reactive is vital to creating a healthy supply environment that works on a global basis, able to span multiple time zones and numerous legislative trading areas.
The reality that needs to be faced is that traditional Enterprise Resource Planning cannot always handle the demands of a non-linear, global supply chain, one that is multi-faceted, operating in a complex environment of multiple suppliers. In sectors where just-in-time is necessary, this becomes even more challenging.
In summary, top tip two recommends you take the time to revisit your IT systems and assess them for suitability.
THREE: Connectivity is critical for visibility and agility
Number three in my top tips shouldn’t be a surprise, but maybe you have fallen into the trap of thinking that connectivity is just the “plumbing”, if so, this report suggests you think again.
A supply chain that is ‘connected’ will increase both visibility and agility throughout the chain, but ensure that you have applied right level of process integration. (Without it, you run the risk of disparate or silo systems).
Cloud has a potential role here; it can become a key supply chain management tool, offering visibility over the full end-to-end process. While some experts will continue to argue at how much real-time data you really need in the supply chain, the true power of the Cloud is just starting to be realised in distribution, already showing potential in helping silo systems talk to each other.
FOUR: You need supply chain harmonisation to keep your suppliers along for the ride
Top tip four and it is time to remember your suppliers! Extending your business processes beyond the ‘walls’ of your own systems can add a significant burden on your suppliers, some of whom may not be well equipped to deal with it. Harmonising your supply chain process has become increasingly important recently, and is likely to prove business critical for you in the future. Also, don’t forget to ensure that you will be able to make sense of the data when you get it.
Some companies have already spent time mapping out their supply chains (or at least are trying to, it’s not quick or easy for most). They look at everything from physical process to supplier interaction in order to locate weaknesses and target strengths to leverage, not just to squeeze out cost efficiencies but also to prepare and plan for supply chain disruptions.
FIVE: You might expect most companies to be there already, in truth they aren’t
I leave you with a recent quote from World Economic Forum Founder and Executive Chairman, Klaus Schwab, who succinctly sums up the situation that we find ourselves in.
“Across every sector of society, decision makers are struggling with the complexity and velocity of change in an increasingly interdependent world. We need to explore and develop new conceptual models which address global challenges. The more complex the system, the greater the risk of systemic breakdown, but also the greater the potential for opportunity.”
So, what is international expansion to be for your company? If this article persuades you to find the time to read the full report after all, you can download it here and you can also read what other companies have to say about it.