How to successfully manage international expansion
By Denise Oakley, International Marketing Manager, GXS
Companies are accelerating their expansion ambitions, looking to capture new sales growth away from home in new geographies that are demonstrating rapid growth. While the opportunities far outweigh the threats, there are challenges in managing a global or multi-country enterprise.
Global supply chains need to be both agile AND robust
A global supply chain needs to be agile enough to react and serve multiple markets, depending on business needs, but it must also be robust enough to withstand changing local demands.
Under increasing pressure to buy globally, but think locally, many companies are finding a need to balance global aspirations with increasing consumer demand to reduce product-level mileage in the supply chain.
At the same time, however, consumers expect to see an ever-increasing range of goods available for them to choose from, driving demand for supply chain development that includes near sourcing.
Supply chains need to be more dynamic and move away from the traditional push and pull model, need to be more responsive to customers not just in terms of products, but sourcing, manufacturing, transport, animal and environmental welfare, and treatment of employees.
Traditional IT systems struggle with complex, extended supply chains
No company can grow faster than its supply chain infrastructure, so knowing the effective range or limitations of your supply chain is critical to expanding.
Making everything speak the same ‘language’ in a supply chain that is both flexible and reactive is vital to creating a healthy supply environment that works on a global basis, able to span multiple time zones and numerous legislative trading areas.
The reality that needs to be faced is that traditional Enterprise Resource Planning cannot always handle the demands of a non-linear, global supply chain, one that is multi-faceted, operating in a complex environment of multiple suppliers. In sectors where just-in-time is necessary, this becomes even more challenging.
Connectivity is critical for visibility and agility
A supply chain that is ‘connected’ will increase both visibility and agility throughout the chain, but ensure that you have applied right level of process integration. (Without it, you run the risk of disparate or silo systems).
Cloud has a potential role here; it can become a key supply chain management tool, offering visibility over the full end-to-end process. While some experts will continue to argue at how much real-time data you really need in the supply chain, the true power of the Cloud is just starting to be realised in distribution, already showing potential in helping silo systems talk to each other.
You need supply chain harmonisation to keep your suppliers along for the ride
Extending business processes beyond the ‘walls’ of your own systems can add a significant burden on your suppliers, some of whom may not be well equipped to deal with it. Harmonising your supply chain process has become increasingly important recently, and is likely to prove business critical for you in the future. Also, don’t forget to ensure that you will be able to make sense of the data when you get it.
Some companies have already spent time mapping out their supply chains (or at least are trying to, it’s not quick or easy for most). They look at everything from physical process to supplier interaction in order to locate weaknesses and target strengths to leverage, not just to squeeze out cost efficiencies but also to prepare and plan for supply chain disruptions.
So, what does international expansion mean for your company? If this article persuades you to read the full report, you can download it here and also read what other companies have to say about it.
Elon Musk's Boring Co. planning wider tunnels for freight
Elon Musk’s drilling outfit The Boring Company could be shifting its focus towards subterranean freight and logistics solutions, according to reports.
A Boring Co. pitch deck seen and shared by Bloomberg depicts plans to construct wider tunnels designed to accommodate shipping containers.
Founded by Tesla CEO Musk in 2016, the company initially stated its mission was to offer safer, faster point-to-point transport for people, particularly in cities plagued by traffic congestion. It also planned longer tunnels to ferry passengers between popular destinations across the US.
The Boring Co. completed its first commercial project earlier this year in April. The 1.7m tunnel system is designed to move professionals between convention centres in Las Vegas using Tesla EVs. It says the Las Vegas Convention Centre Loop can cut travel time between venues from 45 minutes to just two.
Boring Co.'s new freight tunnels
The Boring Co.'s new tunnel designs would allow freight to be transported on purpose built platforms, labelled as “battery-powered freight carriers”. The document shows that, though the containers could technically fit within its current 12-foot tunnels, wider tunnels would be more efficient. Designs for a new tunnel, 21 feet in diameter, show that they can comfortably accommodate two containers side-by-side, with a one-foot gap between them.
The Boring Co.’s new drilling machine, dubbed Prufrock, can tunnel at a rate of one mile per week, which is six times faster than its previous machine, and is designed to ‘porpoise’ - mimicking the marine animal by ‘diving’ below ground and reemerging once the tunnel is complete.
Tesla’s supply chain woes
Tesla is facing its own supply chain and logistic issues. The EV manufacturer has raised the price of its vehicles, with CEO Musk confirming the incremental hike was a result of “major supply chain pressure”. Musk replied to a disgruntled Twitter user, confused as to why prices were rising while features were being removed from the cars, saying the “raw materials especially” were a big issue.
Car manufacturing continues to be one of the industries hit hardest by a global shortage in semiconductor chips. While China’s chip manufacturing levels hit an all-time high in May, and the US is proposing a 25% tax credit for chip manufacturers, demand still outstrips supply. Automakers including Volkswagen and Audi have again said they expect reduced vehicle output in the next quarter due to a lack of semiconductors, with more factory downtime likely.
Top Image credit: The Boring Company / @boringcompany