In Depth: Global Supply Chain  Mastering the Complexity Challenge in the Global Supply Chain

A variety of pressures are pushing enterprises across diverse sectors to extend their supply chains around the world. But while many companies are acting globally, they are still thinking locally.


Peachtree now is using UPS Supply Chain Solutions to handle such services as air, ocean, rail and road freight, customs brokerage, consolidation of multiple vendors from different locations, and package delivery. The company imports its fabric in 50-60 yard "rolls" into the United States primarily from two countries, China and Italy. From China, fabrics are transported via ocean containers from the port of Tianjin to the port of Long Beach. The goods are then transported via rail to a container yard in Atlanta, where they clear customs and are then trucked to Peachtree's distribution center (DC). From Italy, fabrics are consolidated from different vendors in the UPS Supply Chain Solutions facility in Milan and then transported via ocean freight to the port of Charleston, or the goods are transported via air freight from Italy to Atlanta and then trucked to Atlanta, where the fabrics clear customs in a UPS-bonded facility and then transported to the Peachtree DC.

Handing its inbound logistics over to UPS has had the effect of putting Peachtree in the driver's seat as far as controlling the movement of its goods. In the past, for instance, Peachtree's suppliers managed the shipping of their goods to the United States from China, leaving the fabric company with little control over the selection of shipping options that offered the best price and service levels. Now, says Tom Hall, vice president of finance for Peachtree, "With UPS Supply Chain Solutions we have more control over the shipments and, in fact, the overall situation." Elsewhere, UPS keeps Peachtree informed of shipment delays, which allows Peachtree Fabrics to be more responsive to their customers. For example, during the recent backup of the U.S. rail system, UPS' customer alerts helped Peachtree Fabrics plan accordingly and allowed the company to keep its customers better informed with up-to-date information.

The Future of Complexity

Deloitte concludes its "Mastering Complexity" study by emphasizing that, regardless of the challenges it entails, "value chain complexity is unavoidable for most manufacturers that want profits and growth." The drive to lower costs and open new markets will simply be too great for most companies.

As such, according to the consultancy, the imperative for executives seeking to keep their companies competitive will be to go beyond simply optimizing their enterprises' product development, supply chain and demand-generation processes. "The challenge for manufacturers the rest of this decade is a whole new one," the report states, "continuing to optimize those three areas but, more importantly, synchronizing across them at key moments in the profit cycle." That means increasing cross-functional and intra-enterprise collaboration, and applying more flexible and accelerated product development and production processes, among other measures that the consultancy recommends.

In the end, incorporating these and other practices to master complexity in the supply chain will be difficult, but, as Deloitte says, "as globalization of manufacturing and innovation continue to accelerate, we believe that it will no longer be an option but rather a requirement for survival and success."

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