Listening to a discussion on supply chain logistics panel, then follow the debate with some leading logistic thinkers and companies, and then stepping back you start to see a change to focusing from Global outlook to a Continental outlook, and networks of supply chain. When you listen to logistics thinkers, the cost of fuel, and changing climate conditions with increased storms, and the increased requirement for speed and reliability of delivery to end users is driving change in thinking to how to build efficient continental value networks.
Brand loyalty is decreasing, while convenience of consumption increases in buying behavior. The fact that I need to consume a product now and the ease buying, plus price will lead me to alternative products. In the 2000’s, we had a change to Globalization this is still happening in companies acquiring other companies and will increase, as people change to consume, buy online, but now comes the challenge of fulfillment in a timely and cost effective manner. Sourcing in low cost countries is becoming risky and costly due to transport costs, and distance, and since 2006 we continued to see a rise in transport costs, and environmental responsibility that adds to cost.
To address this, we seeing a move gradually to a continental value chain reducing distance some reducing time and uncertainly/ risk of delivery. Also reducing cost through short distances, and fewer segment changes. These Value supply chains do cross borders.
Increasingly the complexity and value of the return of Global value delivers less value, vs a tighter and more agile continental value chain. New product integration can fit the market; changes in that market are absorbed and adjusted to faster. So information networks, and operational landscapes that enable transparent view and action across the continental chain, awareness of situation and state, the ability interact faster and adjust is key. Already in the smart grid discussions you starting to see the ASEAN Grid a distributed / collaborative grid for the nations of ASEAN. In the food / CPG industries, primary production will happen centrally in one or few places in the continent, with packaging and final end product manufacturing happening locally servicing the language vs country. The Business System, Product Life Cycle Management, Asset management, and value chain planning and scheduling done across multi value sites in a logically ONE production landscape.
From an industrial / manufacturing system point of view this shift still a holistic view, where a set of value generating assets and their systems, assets and people will be interlinked across set of interconnected service buses to satisfy the needs within a continent. The uniqueness of each site, will be maintained, but the alignment will now exist through this “loosely coupled but aligned approach”, with operational management cross the borders and taking this continental view. The scope of the projects should be more contained than a global view. Combine this with the creation of dynamic operational community with cultural boundaries within the continent, the education requirement reducing “time to experience/ performance of staff can scope to the continent, which will reduce time zone miss alignment, as well.