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.