Speed, costs, and knowledge are critical underlying factors of supply chains. These create advantages, which make the model competitive. Another area is flexibility, which allows for risk reduction and in many cases cost minimization as well as increased speed. From the standpoint of operational processes, the two key emerging competitive advantages for global supply chains are Downstream Supply Chain Development and Increased Collaboration and Coordination.

Downstream Supply Chain Development
To look at the larger picture, downstream supply chain development is maybe not an emerging advantage, but certainly one that companies are currently taking a closer look at. In some cases, the recent toy industry recall is forcing this. As supply chains become even more global, developing the downstream supply chain is essential to reducing cost, improving speed and flexibility. Not to mention mitigating other factors that impact the end-value provider’s brand image. Commonly this is done by increasing knowledge resources and capabilities, but also building longer-term development processes to ensure the core supply chain model remains intact. We don’t need to go into a history lesson on some well known Japanese models that utilized this strategy rather effectively.

Increased Collaboration and Coordination
Closely related, companies and industries are only starting to see the role they play in the entire supply chain organism. This is fueling increased collaboration and coordination. For example (a US model), the Western Growers Association created a partnership with C.H. Robinson to improve the resource utilization of both the industries operations and the logistics network. In China, companies are developing centralized locations for subcontracting operations, importantly with logistics providers involved. This greatly improves the coordination among material and information flows, reducing costs, increasing flexibility and speed.

As supply chains achieve their competitive advantages through these procedural processes, one must look at the details of specific operations to see what is emerging. RFID gets a lot of press and rightly so. Advanced software and logistics do as well. At the core however are operating systems, which dictate material, information and financial flows. This is where the advantage comes from.