How to achieve business success in global markets
With the introduction of automation and artificial intelligence in this era of glob...
Digitalisation has resulted in business operations vastly evolving.
With the introduction of automation and artificial intelligence in this era of globalisation, it comes as no surprise that our supply chains are under extreme pressure to maintain demand. Ultimately, the importance sits on businesses having effective management of their supply chain.
But how can businesses start to create and implement stand-out strategies to achieve globalisation?
Expanding into international markets allows businesses to explore and extend their reach, whilst also providing the ability to source a wider range of products at a reduced cost. Those businesses that are successfully able to interconnect through global networks are at a competitive advantage. Globalisation, if executed correctly, can fast track revenue growth. However, this level of expansion welcomes difficult challenges that businesses need to overcome.
Debbie Lentz, President of Global Supply Chain at RS Components and the Electrocomponents Group, explores below the benefits of globalisation and its impact on the workforce, which is only set to increase.
Ahead of any decision to go global, businesses must first have an understanding of their new territory, its culture, administration, and economic differences. And most importantly, organisations need to identify objectives and goals to measure out the opportunity.
Implementing processes that work for your business
The increased demand, when expanding on an international scale, requires working platforms that can adapt significantly, with the added challenge of maintaining communication across multiple countries and time zones. For example, a business may be operating in the United Kingdom, with its production and manufacturing taking place in Mexico or Turkey and its customers located across the world.
Maintaining communication can be challenging among foreign markets; historically, businesses have typically managed interfaces to direct suppliers and customers internally. Since the birth of globalisation, we’ve seen businesses largely benefit from outsourcing and collaborating with external partners to streamline communication and smooth the execution of globalisation. A collaboration such as this takes sophisticated management, control, and strong communication, whilst also overcoming language barriers.
Debbie continues: “When building and maintaining clear communication across all of our networks, I’ve found the use of video calling and cloud storage to share documents to be extremely effective. By translating comms into six different languages we can ensure that we’re reaching and engaging with most of our employees in their preferred language. As a result of this, our multilingual workforce can break down language barriers, streamline communication and drive a motivated team.”
“It’s important that businesses consider ways to easily transfer information across different networks, from country to country. This will not only provide better transparency throughout your supply chain but will also unlock stronger channels for a better flow of goods.”
Establishing an effective supply chain
Welcoming new supply channels creates the opportunity for errors. Without proper management and organisation, you can quickly lose track of processes and see a rapid decline in service. Supply chain management is one of the most important aspects to maintain for globalisation; plus having a strategic ecosystem is critical.
To succeed within a competitive market, it’s important that you have complete visibility of your supply chain at all times. You must ensure there are no gaps in service, that risk is reduced and any issues that arise are dealt with promptly. How this can be achieved is by adopting processes that support full collaboration of transport, inventory and more - as well as maintaining compliance with regulations.
Globalisation and technology go hand in hand - without technology, we’d be limited on the markets we reach. With the use of digital platforms and tools, businesses can sell in global markets whilst also maintaining real-time communication amongst their teams.
Debbie adds: “Utilising technology such as automation is effective to not only decrease operating costs but also drive productivity. Tools such as automatic storage, retrieval systems, and packing machines are great to reduce steps and decrease complexity. By investing in distribution centres you can have the capability and capacity to underpin and develop future growth plans.”
Acquiring a diverse workforce
A study found that a diverse workplace makes 19% higher revenue. Working in global markets allows businesses to recruit a diverse team as it engages with a variety of different types of talent and encourages different perspectives to be introduced into the organisation.
Having managed a decentralised team, Debbie shares her experience: “Whether you’re managing a team across the globe or a small team in one country, it’s important that you acknowledge and are respectful of the vast variety of different religious beliefs and cultural customs of your workforce. People of different backgrounds, races, and nationalities approach work tasks and human interactions in different ways. Inclusive companies are 1.7 times more likely to be innovative leaders in their market.”
By establishing a flexible supply chain, businesses can not only successfully merge into new markets but are equipped with the ability to address any eCommerce trade changes in the future effectively. Globalisation offers businesses the opportunity to establish stable and flexible processes and the ability to improve and create an agile supply chain, whilst also building and nurturing a diverse workforce.
By Debbie Lentz, President of Global Supply Chain at RS Components and the Electrocomponents Group
NTT DATA Services, Remodelling Supply Chains for Resilience
Joey Dean, the man with the coolest name ever and Managing Director in the healthcare consulting practice for NTT DATA and is focused on delivering workplace transformation and enabling the future workforce for healthcare providers. Dean also leads client innovation programs to enhance service delivery and business outcomes for clients.
The pandemic has shifted priorities and created opportunities to do things differently, and companies are now looking to build more resilient supply chains, none needed more urgently than those within the healthcare system. Dean shares with us how he feels they can get there.
A Multi-Vendor Sourcing Approach
“Healthcare systems cannot afford delays in the supply chain when there are lives at stake. Healthcare procurement teams are looking at multi-vendor sourcing strategies, stockpiling more inventory, and ways to use data and AI to have a predictive view into the future and drive greater efficiency.
“The priority should be to shore up procurement channels and re-evaluate inventory management norms, i.e. stockpiling for assurance. Health systems should take the opportunity to renegotiate with their current vendors and broaden the supplier channel. Through those efforts, work with suppliers that have greater geographic diversity and transparency around manufacturing data, process, and continuity plans,” says Dean.
But here ensues the never-ending battle of domestic vs global supply chains. As I see it, domestic sourcing limits the high-risk exposure related to offshore sourcing— Canada’s issue with importing the vaccine is a good example of that. So, of course, I had to ask, for lifesaving products, is building domestic capabilities an option that is being considered?
“Domestic supply chains are sparse or have a high dependence on overseas centres for parts and raw materials. There are measures being discussed from a legislative perspective to drive more domestic sourcing, and there will need to be a concerted effort by Western countries through a mix of investments and financial incentives,” Dean explains.
Wielding Big Tech for Better Outcomes
So, that’s a long way off. In the meantime, leveraging technology is another way to mitigate the risks that lie within global supply chains while decreasing costs and improving quality. Dean expands on the potential of blockchain and AI in the industry.
“Blockchain is particularly interesting in creating more transparency and visibility across all supply chain activities. Organisations can create a decentralised record of all transactions to track assets from production to delivery or use by end-user. This increased supply chain transparency provides more visibility to both buyers and suppliers to resolve disputes and build more trusting relationships. Another benefit is that the validation of data is more efficient to prioritise time on the delivery of goods and services to reduce cost and improve quality.
“Artificial Intelligence and Machine Learning (AI/ML) is another area where there’s incredible value in processing massive amounts of data to aggregate and normalise the data to produce proactive recommendations on actions to improve the speed and cost-efficiency of the supply chain.”
Evolving Procurement Models
From asking more of suppliers to beefing up stocks, Dean believes procurement models should be remodelled to favour resilience, mitigate risk and ensure the needs of the customer are kept in view.
“The bottom line is that healthcare systems are expecting more from their suppliers. While transactional approaches focused solely on price and transactions have been the norm, collaborative relationships, where the buyer and supplier establish mutual objectives and outcomes, drives a trusting and transparent relationship. Healthcare systems are also looking to multi-vendor strategies to mitigate risk, so it is imperative for suppliers to stand out and embrace evolving procurement models.
“Healthcare systems are looking at partners that can establish domestic centres for supplies to mitigate the risks of having ‘all of their eggs’ in overseas locations. Suppliers should look to perform a strategic evaluation review that includes a distribution network analysis and distribution footprint review to understand cost, service, flexibility, and risks. Included in that strategy should be a “voice of the customer” assessment to understand current pain points and needs of customers.”
“Healthcare supply chain leaders are re-evaluating the Just In Time (JIT) model with supplies delivered on a regular basis. The approach does not require an investment in infrastructure but leaves organisations open to risk of disruption. Having domestic centres and warehousing from suppliers gives healthcare systems the ability to have inventory on hand without having to invest in their own infrastructure. Also, in the spirit of transparency, having predictive views into inventory levels can help enable better decision making from both sides.”
But, again, I had to ask, what about the risks and associated costs that come with higher inventory levels, such as expired product if there isn’t fast enough turnover, tying up cash flow, warehousing and inventory management costs?
“In the current supply chain environment, it is advisable for buyers to carry an in-house inventory on a just-in-time basis, while suppliers take a just-in-case approach, preserving capacity for surges, retaining safety stock, and building rapid replenishment channels for restock. But the risk of expired product is very real. This could be curbed with better data intelligence and improved technology that could forecast surges and predictively automate future supply needs. In this way, ordering would be more data-driven and rationalised to align with anticipated surges. Further adoption of data and intelligence and will be crucial for modernised buying in the new normal.
These are tough tasks, so I asked Dean to speak to some of the challenges. Luckily, he’s a patient guy with a lot to say.
On managing stakeholders and ensuring alignment on priorities and objectives, Dean says, “In order for managing stakeholders to stay aligned on priorities, they’ll need more transparency and collaborative win-win business relationships in which both healthcare systems and medical device manufacturers are equally committed to each other’s success. On the healthcare side, they need to understand where parts and products are manufactured to perform more predictive data and analytics for forecasting and planning efforts. And the manufacturers should offer more data transparency which will result in better planning and forecasting to navigate the ebbs and flows and enable better decision-making by healthcare systems.
Due to the sensitive nature of the information being requested, the effort to increase visibility is typically met with a lot of reluctance and push back. Dean essentially puts the onus back on suppliers to get with the times. “Traditionally, the relationships between buyers and suppliers are transactional, based only on the transaction between the two parties: what is the supplier providing, at what cost, and for what length of time. The relationship begins and ends there. The tide is shifting, and buyers expect more from their suppliers, especially given what the pandemic exposed around the fragility of the supply chain. The suppliers that get ahead of this will not only reap the benefits of improved relationships, but they will be able to take action on insights derived from greater visibility to manage risks more effectively.”
He offers a final tip. “A first step in enabling a supply chain data exchange is to make sure partners and buyers are aware of the conditions throughout the supply chain based on real-time data to enable predictive views into delays and disruptions. With well understand data sets, both parties can respond more effectively and work together when disruptions occur.”
As for where supply chain is heading, Dean says, “Moving forward, we’ll continue to see a shift toward Robotic Process Automation (RPA), Artificial Intelligence (AI), and advanced analytics to optimise the supply chain. The pandemic, as it has done in many other industries, will accelerate the move to digital, with the benefits of improving efficiency, visibility, and error rate. AI can consume enormous amounts of data to drive real-time pattern detection and mitigate risk from global disruptive events.”