A Flatter World

The idea behind Friedman's "The World Is Flat", is that due to the world wide web, along with other factors, communication anywhere in the world is as easy as a click of the mouse. When it comes to supply chain management, the ease of ordering products from overseas has become that simple. Anyone can order the best quality, lowest cost, or most unique products from all over the world. But as stated in "Supply Chain Opportunities" by Scott Koegler, the actual process of shipping the merchandise to and from seperate countries has not kept pace. It's hard for me to believe how slow the process still is. At my job, when we order flooring from China it consistantly takes three months for one crate to arrive in Houston, TX and another couple weeks to reach Ft. Worth. With all the technology of today you would think that an order would be received in a matter of minutes, if not seconds, shipped out within a matter of days, and checked in with little wait or lag time. As stated in the article, the financial software isn't up to speed either. Time is money, and too much of it is being wasted by not implementing technology into the future of supply chains. The world is becoming flat, and trade between overseas countries is becoming more and more common, it's time for these software companies like Oracle to see that. There's no doubt that this technology will be implemented, and most likely is already in production, but it shouldn't have taken this long.

http://www.line56.com/articles/default.asp?ArticleID=7833&TopicID=2

Comments

[JeffLaw]

I agree that when an individual makes a purchase that the company should be able to get the merchandise to them quickly. But when talking about raw material or other items that you buy in large quatities then there will always be that time lag. I purchase containers for China of raws or our production all the time and I am aware that there is a time lag. Most of the time you have to add 10 days to the specified lead times. Why because to give you the price you wnat they make and ship per order and no inventory, also it travels by conainer on cargo ships to reduce cost. Then it goes through customs to insure our safety and there is no smuggling going on. If you reduce the overseas companies to the same lead times that domestic suppliers give you the price difference would be next to nothing.

[Monty167]

Yes the world is now flat, wonder what Christopher Columbus would have to say about that. But as for software to implement faster supply chain communications, it is out there. The only thing is when dealing with companies are they set up also. Depending on a company an ERP system from Oracle or SAP depending on what you want will push prices into the 100's of Millions and to implement we are not talking a couple of months, we're talking years for a full implementation. When Nestle USA did their implementation it took 6 yrs and over 200 million dollars. http://www.cio.com/archive/051502/nestle.html
Those softwares are not cheap, but also when dealing with foreign countries, you have to deal with their political agenda. And well China, is still happy being a Communist Country. Only thing I could suggest would be to order it 4 months in advance of when it would be needed, but that leaves a lot of room for error or customers to change their mind of what they want. Their is no easy solution to the problem. Like I said the software is there, wether companies can afford to make those types of investments depends on their CEO & CIO and the companies bottom line and ROI.