World Supply Chain Management Landscape Taking Shape - But What Shape?

The world landscape, from a business and supply chain management standpoint, is always changing. However, the change is progressive (for the most part) and towards and unknown final condition. One expert, Dr. Mahender Singh, feels that three potential shapes exist: flat, rocky and somewhere in between.

Flat, or something close to flat.

Dr. Singh refers to this as synchronicity. Globalization will have settled in and all countries are participating. Trust exists and protectionism is dropped in favour of the highest value solution always winning out - whether it be domestic, near-shored or off-shored.

Rocky, and ugly.

In fact, this isn’t too far off from what we have today. Globalization and off-shoring has largely focused on cost reductions when assessing value in procurement. The green shift is starting to change this calculation of value (for the better), and possibly social costs will gain strength in the coming years. People, corporations and governments will be acting locally and for their own best interests - not that of the greater cause. This is similar to some multi-national arrangements in corporations, and is a real shame. The net present value of an opportunity diminishes over time.

The in-between.

Here globalization is much more regulated. Governments selectively pick battles regarding protectionistic opportunities, in an effort to maximize non-domestic contracts. Some industries receive preferential treatment (such as aerospace in Canada, can you say Bombardier?) while others are much more open to tenders from international firms. Government spend and procurement is not “locked down” but strategic for the given time and national outlook.

What about Supply Chain Management in North America?

Well, this is an interesting one. Innovation has largely been US based over the past many years; however, the winds of change have been blowing for a while. Europe is gaining strength, as is Asia. More than likely the end result will depend on human resources, or capital — the knowledge economy may be the bottleneck impacting the strength of a given firm within its’ industry. Globalization can help to support this, as can carefully structured immigration policies and support.

What will the effects be for North American industries? Diversity supporting cultural challenges, communication and geographic specific market research will be key.

Ideally, in a complex system or process such as this, any firm would have a path forward that addresses all variables; whether known or unknown. Since this isn’t the case (or maybe even possible) contingencies are developed with some variable conditions being completely ignored. Most firms should be focusing on diversity, strategy and strength in employee knowledge, skills and abilities. Those are in no particular order by the way… all are extremely valuable in combatting the challenges of today’s landscape. After all, today’s landscape helps shape that of tomorrow.

After thought

It is interesting when one changes her/his perspective. In the Western hemisphere we are starting with the cart and moving towards the horse. Managing the supply chain and complexity, from culture to available human resources, is a bigger challenge whereas other geopolitical locations are skilled and experienced in these areas and are simply looking for the established business and commodities.

The original article quoting Dr. Singh can be found here, and was written by Larry Lapide of Supply Chain Management Review: A Flat Future - Don’t Bet on It