I am just winding up a wild, seven-day trip to Europe. In the last week, I have been in five different hotels, 10 different towns, and have experienced some fantastic food and several bottles of great red wine.

Let’s see -- One keynote speech (check), 11 client meetings with European companies and 14 client meetings with global companies (check and double-check), and a very successful European staff leadership meeting (check!).

I wanted to share the thrust of many of my discussions and interactions that I have had while on my trip:

Priority 1: Supply chain challenges result from volatility in the marketplace. How do we approach this?

Increased emphasis on the importance of contingency planning

 

More formal commitment to supplier collaboration

 

Increased prioritization of supplier risk assessment

 

Increased focus on SIOP

 

Increased emphasis on speed, agility and flexibility

Priority 2: Globalization has an impact on organizational structure, processes and the future of business. How do we meet this challenge?

Increased priority of eliminating regional boundaries

 

Enhanced awareness and supply chain involvement in M&A

 

Increased focus on optimizing global product flows and distribution network planning

 

Increased awareness of growing China markets

 

Greater emphasis on Total Delivered Cost of purchased goods

Priority 3: There is an increase in inventory turns and the need to capture free cash flow. How should we approach this?

Improved business analysis and specification of inventory requirements

 

Improved demand planning

 

Greater emphasis on the application of inventory analysis tools

 

Enhanced focus on the elimination of obsolete inventory

 

Enhanced focus on product and vendor rationalization

Priority 4: There is a strong drive to reduce transportation costs. How can this best be accomplished?

Increased focus on mode selection

 

More methodical freight bidding processes

 

Application of more sophisticated TMS

 

Greater emphasis on Freight Audit and Payment

 

Higher priority for unbundling freight on inbound purchases

The most interesting part of this list is that it is not much different from the list that would result from seven days of meetings in the U.S. And in fact, it also has a lot in common with the list that would result from a week-long visit in our Asian operations. So, one big observation and two conclusions:

Observation: While I have just explained the similarities of the "Plan-Buy-Move-Store-Sell" of the supply chain, by omission, I have not addressed the real difference in the "Make" component of the supply chain between Europe, the United States and China.

Conclusion 1: Europe and the United States are separated by a wide body of water, but very close in the challenges/opportunities being faced in the marketplace today.

Conclusion 2: China is different from Europe and the United States, but many of the supply chain challenges being addressed in Europe and the United States are not all that different from the China challenges/opportunities.

So, although it is not yet completely one world, it is a small supply chain world after all. Have you been to Europe on business lately, and if so, what are your observations about global supply chain, logistics and other business functions?

Go!Go!Go!

More Resources

Download the white paper: Evolution to World-class Inventory Management

 

New report reveals China as one of the few growth areas for US business around the world.

 

Article from Logistics Insight Asia: What is the supply chain outlook for 2010 in Asia?

Photo credit: Laszlo Photo

With an upcoming trip to Germany next week, my thoughts have been even more geared towards the state of the global economy. I have also been thinking about the latest topics for discussion at my meetings there, particularly with the German Association of the Automotive Industry (VDA).

I’ll be visiting the Tompkins Associates’ German office on the heels of some fairly positive news – the country’s GDP grew by 0.3% during the second quarter of this year, following a disappointing contraction of 3.5% during the first quarter.

So things are definitely on the mend in Germany even though full economic recovery will take awhile, just as it will with the rest of the world.

And we all know it’s been a very trying year for the auto industry – no matter what country you’re in. Global demand for automobiles decreased, hence auto manufacturing went down the tubes.

Despite the downturn, Germany continues research and development efforts and believes that this is their key to coming out of the recession stronger.

As a testament to this, the German auto industry has not made cuts in R&D because they know that industry pressure continues to rise and they want to remain competitive. They have a Great Comeback strategy in place, and that’s exactly what it takes to come back strong from the recession.

IT in the supply chain will continue to play a huge role in the auto industry. The downturn has no doubt strained supplier relationship management for manufacturers.

Some in the German auto industry are saying, "There are signs that a technological turning point is occurring concurrently to the worst recession since the start of car making."

Long-term success will be based on new technologies and suppliers’ involvement in promoting technical innovations. Suppliers are going to have to up the ante to stay in the game, mainly their value adds.

I look forward to discussions with the VDA and to learning more about their Comeback plans. I’d really like to hear your thoughts on the global economy, especially on the auto industry’s future.

Now I need to go brush up on my German lingo. Auf wiedersehen.

Jim