The Global, Make-to-Order Supply Chain: Is it Time to Examine Alternative Models?

Dell isn't the only just-in-time supply chain on the block; have you looked at the Sun lately?



Dell's Command and Control Supply Chain


Sun's Empowered Trading Partner Supply Chain

  • Moving a growing percentage of manufacturing, currently over 90 percent of production, to partners in lower cost geographies;

  • Rationalizing their supply base and cutting tiers out of their supply chain so that key strategic partners engage in a greater number of supply chain activities;

  • And, migrating from a Command and Control business model to one in which trading partners are provided visibility to forecasts and orders and are then expected to reliably fulfill orders according to fixed competitive lead times that range from four to 13 days, depending upon the product, and with one-day expedited delivery if customers are willing to pay a premium.

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  • Selecting strategic partners, particularly in Asia, takes a considerable amount of work. Sun has discovered that contract manufacturers that have other Command and Control style customers are unsuitable for the Empowered Trading Partner model. They have developed a habit of waiting for commands and struggle to do the planning and execution themselves.

  • High-tech companies working with contract manufacturers in Asia tend to operate in free trade zones. Not only does this provide lower duties, they have discovered the logistics and IT infrastructure to be far superior.
Steve Banker is service director for supply chain management at Dedham, Mass.-based ARC Advisory Group.

Copyrighted by ARC Advisory Group. Reproduced with permission from ARC.

Additional Articles of Interest

Sun Microsystems' Customer Fulfillment in Transit process Anatomy of the 'Zero Touch' Supply Chain Supply & Demand Chain Executive

managing uncertainty Rethinking Risk Supply & Demand Chain Executive

business risks associated with product quality The Quality Risk Supply & Demand Chain Executive