THE IMPACT OF WORLD-CLASS MANUFACTURING PRACTICES ON SMALL MANUFACTURERS - by
David K. Johnson

Supply-chain Agility

Excessive inventory creates inertia within the supply-chain. Often new product innovations are slowed as they wait for obsolete inventory to filter through the supply-chain. By reducing inventory within the supply-chain the entire supply-chain becomes more responsive to changes within the industry. Lowering inventories within the supply-chain reduces the exposure to obsolescence and can provide a supply-chain a strategic advantage over its competitors.

Supply-chain Synergies

Supply-chain integration often produces synergies among various supply-chain members. As supply-chain partners collaborate, problems that were unsolvable by individual supply-chain members often become quite solvable as each partner brings unique strengths to the table. Corporation promotes continuous improvement at the supply-chain level, which would not be possible otherwise.

A Champion and Supporters

Successful supply-chain integration requires a champion as well as supporters. A well-integrated supply-chain must recognize the importance of leadership as well as followers. Someone must stand up and coordinate the actions of the supply-chain. It makes sense for the supply-chain champion to be the dominant player in the supply-chain. Because of their size and resulting lack of leverage with other supply-chain members, small manufacturers are more likely to act as supply-chain integration supporters than supply-chain integration champions. To successfully integrate the supply-chain, other members of the supply-chain must be willing the follow the supply-chain champion. This requires that the supply-chain champion be the natural leader within the supply-chain. The supply-chain champion is responsible for coordinating the efforts of the supply-chain and must lead other members of the supply-chain in a direction, which benefits the overall system.

If the supply-chain champion does not account for the needs of other members of the supply-chain, they will lose power over their supporters.

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Copyright © 2005. David K. Johnson. All Rights Reserved.