Collaborate to Innovate

Five universal business plan challenges driving supply chain alignment in the 21st century


If there's a single word that sums up the direction of business innovation and supply chain midway through the first decade of the 21st century, it might well be collaboration. It's a theme that's resonated over the past two years at four global-economy and supply chain thought leadership conferences sponsored by UPS and Harvard Business School Publishing. These "Longitudes" conferences have created a dialogue among many of the world's leading supply chain practitioners, renowned academic researchers and world leaders engaged in shaping the global economy. To date, the conferences have been held in the United States, Europe and most recently, this fall, in China.

At Longitudes Shanghai, Tom Friedman, best-selling author of The World is Flat, observed that "in today's interconnected world, economic power increasingly resides with individuals. That includes three billion new players from China, India and the former Soviet Union."

Many enterprising individuals already use Web and other information sharing technologies to work in unprecedented, collaborative ways with a variety of experts, in a variety of fields in a variety of places on the planet. In product design, for example, the wave of the future is exemplified by the recent announcement of a new school at Stanford University that will teach multidisciplinary design strategy by bringing together students from business, engineering, medicine, management and the social sciences to work together to solve problems. Nations are also getting into the act, collaborating as specialists in various aspects of product and services development and at a variety of points in the supply chain.

China has become a manufacturing Mecca, India is becoming an information technology and financial services hub, Taiwan is a technology design and marketing center, Ireland has morphed into a software development hotbed, and Japan and the United States continue to lead in customer-centric design. What do these trends toward specialization and collaboration mean to the supply and demand chain executive?

It's increasingly taking us into a world of synchronized commerce, a world where the flows of goods, information and funds can be combined and choreographed to create value. In such a world, according to the supply chain leaders who've participated in the Longitudes conferences, supply chain pros can seize their own new opportunities to innovate by creating agile supply chains that are closely matched to the business plan. Already, many high-impact, flexible supply chains cross a number of national borders to match the best suppliers with individual orders. As Longitudes participant Bob Moffat, senior vice president of integrated supply chain for IBM, has put it, "It's no longer about taking advantage of economies of scale, but more about taking advantage of economies of expertise."

Specifically, our Longitudes experts advise that supply chain executives can drive profitability ahead if they closely align their supply chain strategies to five universal business plan challenges.

Those are:

  • Growing by reaching new markets
  • Improving customer service
  • Differentiating from competitors
  • Improving cash position
  • And enhancing productivity

The Longitudes experts agreed the supply chain could profoundly influence each of these priorities. Let's look at them one by one.

1. Reaching New Markets

A Longitudes Shanghai takeaway heard from several supply chain leaders was the importance of partnering to build local supply chain expertise in developing nations like China. The Walt Disney Co. has done that in opening its first Asian theme park in Hong Kong. Larry Wilk, Hong Kong Disneyland vice president of logistics and operations, explained that great care was taken to match supply chain strategy to the business plan for Asia. "We wanted to create a great customer experience from the outset," Wilk explained. "To do that, we relied on partnering to keep the supply chain invisible, to increase speed and to decrease the risk of disruption."

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