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.
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
- More research from ARC Advisory Group.