www.supplychainstandard.com


It’s now time to recognise the true value of global supply chains.


Made in theWorld T


raditional statistics attribute the full commercial value of imports to the last link in the production chain even where the


contributionmade by that final link has been minimal. The points ismade by Pascal Lamy, director-general of theWorld Trade Organisation. Speaking in Turkey last week, Lamy argued


thatmost people who speak about global supply and value chains neglect the trade policy side of the debate, but there is a clear link between global value chains and the trade policy environment. “By virtue of being global, these chains lead


to the very same goods or services being produced in multiple geographical locations. It is not only finished products or finished services that cross territorial boundaries, but the vast majority of trade is actually in intermediate products and services.”


As a result, he argues, fewer products are


actually “Made in the UK” or “Made in Turkey,” and more are simply “Made in theWorld”. The average import content of exports is about 40 per cent. Consequently, to export, a country must import as well. In addition, services like logistics, assembly,


distribution, IT, andmarketing, are increasingly being sub-contracted. Lamymakes the point that new calculations of the trade in services show that they account for amuch larger proportion of world trade than previously thought. The ramifications of this are significant – not


just for companies but for governments. Protectionism is a significant bar to the development of efficient international supply chains. Supply chain professionals have got used to thinking in global terms. It’s time that politicians did the same and recognise the true value of global supply chains.


…it’s what you do with it O


ne of the bitter ironies of rapid IT development is the fact that the early adopters are, at some point, going to end


up with the oldest technology, apparently putting themat a competitive disadvantage. The point comes to the fore in a new report by


the Aberdeen Group into how organisations all around the world aremaking use of S&OP entitled “Sales & Operations Planning: A Global Comparison”. For example, the report found that in North


America, 67 per cent of respondents were using legacy systems for S&OP compared to 33 per cent in EMEA and 25 per cent in the emerging markets. In contrast, 73 per cent of respondents in the


emergingmarkets had integrated ERPmodules compared with only 38 per cent in North America. The emergingmarkets were also ahead of


Analysis 15


Buildinga sustainable chain


As pressuremounts onmajor corporations to be seen to be operating in a sustainableway, it has opened up opportunities to a newbreed of organisation dedicated to helping themget their supply chains in order. Organisations like Apple and


Nestlé have been joining the Fair Labour Associationwhich monitors supply chains to eliminate child labour.TheUK has seen the development of communities like 2degreeswhich enable organisations toworkwith their supply chain partners to help themimprove the sustainability. Now,Nike has formed a


North America and EMEA in the use of specialist S&OP solutions. Aberdeen also found that there were differences inmeasurement and organisation, with EMEA themostmature in having the sales and operations planning process established. However, the emergingmarkets were clear leaders when it came to the ability to measure forecast accuracy at the SKU level – possibly reflecting the capabilities of the technology in place. The emergingmarkets group had a distinct


advantage in having newer technology and not being saddled with legacy systems. However, perhapsmore surprisingly, Aberdeen found that this had not directly translated into a higher percentage of companies with best-in-class S&OP performance. And that suggests that success is not just about what kit you have, but what you do with it.


partnershipwith Swiss company bluesign technologieswhichwill giveNike’s supply chain access to two tools—the bluefinder and the blueguide.The toolswill be rolled out acrossNike global supply chain,which spans nearly 50 countries andmore than 800 contracted factories. Why doesNike need to this?


Well, it says, to access these tools and datawithout bluesign, a brandwould need to take its supply chain through individual factory assessments. For an out- sourced global supply chain of Nike’s size, thatwould require significant investment and a number of years. It’s sign of the times - it is


increasingly apparent that managing aspects of supply chain such as sustainability in a cost- effectiveway is going to require strategic partnershipswith specialists.


that, trade and logistics professionalswere pessimistic about the near-termprospects of Arab Spring countries such as Libya, Tunisia and Egypt. The latest Agility EmergingMarkets


Emerging winners and losers T


he tragic events in Algeria in January emphasised the political instability in that part of theworld. But even before


Intelligence for Agility said: “Continuing unrest in neighbouring countries, especially Syria, is likely to be having some impact on individuals’ wariness regarding growth and investment in the Arab Spring countries.” China, India and Brazil remain the


Logistics Index found that some 45 per cent of respondents believe these countries are too unstable for growth and investment. And 42 per cent are uncertain of future prospects. Only 13 per cent felt these countries were


now ready to grow and absorb investment. The study carried by Transport


Supply Chain Standard April 2013


dominant emergingmarkets for investors, exporters, producers of consumer goods, and logistics providers. Even so, the reportmakes it clear that the


dynamics of locating production are changing. Trade and logistics professionals seemore


manufacturers looking for alternatives to China and view cheap labour as a less critical factor in determining where to


Arab Spring countries still too unstable, says emergingmarkets report.


locate production. Economic growth remains the leading


driver of a country’s prospects as a logistics market. Respondents identified foreign investment and trade volumes as greater barometers of a country’s potential than labour costs. So who are the big winners? The report


identified four countries: Kazakhstan, Morocco, Ukraine and Argentina. For Kazakhstan and Argentina, an improvement in the overall economy drove the increase.Morocco climbed upwards as a result of an increase in foreign direct investment; while Ukraine registered improvements in levels of security.


Page 1  |  Page 2  |  Page 3  |  Page 4  |  Page 5  |  Page 6  |  Page 7  |  Page 8  |  Page 9  |  Page 10  |  Page 11  |  Page 12  |  Page 13  |  Page 14  |  Page 15  |  Page 16  |  Page 17  |  Page 18  |  Page 19  |  Page 20  |  Page 21  |  Page 22  |  Page 23  |  Page 24  |  Page 25  |  Page 26