best practices for global supply chains {and why they are worth it}

8/14/2019 Best Practices for Global Supply Chains {and why they are worth it}

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Best Practices forGlobal Supply Chains{and why they are worth it}

Time to broaden your supply chain internationally? You wouldnt be

alone. Todays highly competitive global marketplace demands, at

minimum, some level of active involvement or participation in foreign

markets due to rapidly changing market conditions, aggressive

competition and dramatic growth in foreign exchange. Companies

of all shapes, sizes and industries are jumping on the international

business bandwagon and expanding their transportation logistics

beyond borders to maximize on projected cost savings.

Beore you jump on your international business bandwagon, know that

establishing a cross-border supply chain can be a challenging journeywrought with many logistical obstacles and that what works or your

domestic supply chain may not work as well in the global arena.

To competitively globalize your supply chain, youd do well by adhering

to select industry best practicesour o which include creating

consistency in execution, the establishment o centralized technology

and data, centralizing business rules and creating global visibility.Creating Consistency in Execution

Overview: By virtue o the e in ERP, many organizations have already

learned the value o managing data and processes at the enterprise level.

Typically, best practices are dened, rened, and made part o the ERP

solution prior to implementing or during the implementation process.

Values recognized rom this approach can and should be carried over

to transportation management solutions as well. With global instances

o the ERP, one should ollow suit or all subsystems or complimentary

applications to maintain consistency in execution or all the same

reasons as those taken into consideration when exposing the ERP on a

global basis.

by Sadaf Atashbarghi, CMS GlobalSoft Marketing Manager

H ei g hteni ng S hi ppi ng E ci ency fo r W o r ld Co m m erce

as seen published on

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Beneft: When all o the transportation, logistics, and related service providers strive to achieve the same

standards o perormance, there will be more consistency in the entire global supply chain.

Pitalls: Without building consistency into a global supply chains ramework, ineciencies and duplication o

eorts can impede reliability, driving up costs and reducing services.

Centralized Technology and Data

Overview: Too oten with geographic diversity, whether it is domestic or global, corporations have a tendency

to create islands o technology. This phenomena is oten seen at a high degree when growth is obtained through

acquisition, where systems were in place prior to the acquisition taking place, and in an attempt to allow the

fow o inormation to occur between the two disparate systems and organizations short term communications

interaces are developed as a quick x, and oten times not transitioned or many years. Islands o technology

also create data silos which result in disparate knowledge across global supply chain operations.

Beneft: When key global supply chain technology support systems and data are centralized, it becomes easy

to build certain metrics into the transportation management solution o choice. Weekly perormance data, oexample, can be summed at a monthly level or a macro-level view and viewing several weeks (or months) at the

same time provides a view o uture (or past) trends. This can be helpul in managing the buying, orecasting

replenishment, demand planning, and production activities. Moreover, the aggregate o all demand and

supply data into a centralized data repository delivers appropriate views to all levels o decision makers within

an organizationallowing them to make critical decisions based on real-time demand.

Pitalls: In addition to the higher costs o maintaining multiple systems to perorm basically the same unctions

best practices which have been learned and managed or global supply chain management cannot be put into

eect until the entire organization has the same tools and methodologies. This situation also perpetuates the

existence o technology or longer than expected or desired.

Centralized Business Rules

Overview: Once an application becomes an enterprise application, and only when it becomes an enterprise

application, can the business rules which dene and drive best practices be put in place and managed centrally

This does not limit diversity among the various actions o the entire organization, but rather allows fexibility

or the acility to meet demands and expectations o both the customer and the carrier, while maintaining the

integrity o the corporate governances and best practices.

Beneft: Centralized business rules improve cross-unctional business decisions meant to streamline globa

trade management initiatives while creating and ostering economies o scale.

Pitalls: The key to global trade eciency is the consistency and sustainable repetition o dened and centralizedbusiness rules. When business rules are not centralized, costly ineciencies and overlaps in business processes

contribute to a ragmented and error-prone global supply chain rameworkcan impede reliability, driving up

costs and reducing services.

Global Visibility

Overview: As the likes o manuacturing, distribution, technical and customer support move to regions o

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the world where they can prove to be more cost eective, one must also provide the inormation to support

these activities. This inormation needs to be available at the ngertips o those in these support roles. With this

requirement, global visibility can only be provided by interoperability among the execution systems. And theinteroperability must be real time to be eective at accomplishing visibility o any value. Old inormation is only

valuable to historians, analysts and auditors. To support the customer or trading partner, inormation must be

current... In addition to being timely; inormation needs to be presented to the person requiring this visibility

through one common interace.

Beneft: Companies achieving good visibility or their global supply chains can reduce lead times, inventory

levels, and carrying costs, while also gaining budgetary accuracy thats signicantly higher than that o the

average company. Global supply chain visibility platorms can also directly impact how successul a shippe

isor is notwhen it comes to centralizing trade compliance processes.

Pitalls: Transparency across the global supply chain is becoming more and more important. Todays global

transportation executives want and demand actionable visibility inormation. Thereore, companies notworking on improving the visibility o their cross-border supply chains tend to under-perorm in comparison

to competitors, experience escalating inventory costs and suer rom unpredictable and erratic delivery

perormance.

Remember these best practices when building your global supply chain and you will be sure to reap these and

other benets, giving you a leg up on your competition and allowing you to stay competitive in todays globa

market.

Business Rules: A Case in Point

A skateboard distributor located in Chicago has slumping sales in Caliornia and Arizona. Marketing

intelligence inorms management that the market in this region is very strong or skateboards, however, so is

the local competition with a distribution center in LA, who can serve the dealer with next day delivery usingground as the method o shipping. From Chicago, it takes minimally 3 days to ship ground to Caliornia and

Arizona.

To better compete, senior management at the skateboard distributor determines that a new policy, or

business rule, should be put in place to address this issue. The rule becomes that all skateboards being

shipped to Caliornia and Arizona are now shipped via an air service to compete with the local competitors

delivery times. Ater urther analyses by marketing managerswho note that dealers will not pay or air

servicesit is later determined that the margins with the skateboards are sucient enough to allow the

dealers in Caliornia and Arizona to only be charged or the equivalent o the cost o ground. So the business

rule ultimately becomes: i the delivery state is Caliornia or Arizona, then automatically set the carrier to Next

Day Air but bill the Customer (dealer) or Ground.

This condition can also exist across the world. For example, i a UK acility is typically responsible or shipping

to customers in Germanybut the organization is without product to ulll orders or Germany rom its UK

Distribution centerthe organization may need to ulll the order rom a dierent global acility but only

charge the reight as i the order shipped rom the UK acility. This too is a real world scenario.

Best Practices for Global Supply Chainscontinued from page 2

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best practices for global supply chains {and why they are worth it}

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