THE NEW CRITERIA FOR MANUFACTURING SUCCESS

Not too long ago, all you heard about was vertical integration. Manufacturers would strive to integrate all aspects of their supply chain to gain complete control over their operations and performance. Boy, have times changed. Now the mantra is specialization—outsourcing non-strategic operations to the global market of goods and services to gain cost advantage and focus on core competencies.

Randy Littleson serves as vice president at Kinaxis and has more than 17 years of management experience, having held executive-level positions at Interface Software, Spyglass, and Palindrome Corporation (a Seagate company). To discuss this topic further, join him online at blog.kinaxis.com.

Yet these trends have also opened up unparalleled options for customers, who can tap into the same global market manufacturers can. Competition is now just a mouse click away, because customers can easily shop online for the best service, price, quality, and customization to meet their exact requirements.

As a result, companies are being forced to reevaluate the criteria for success. Specialization has created "virtual enterprises" that are ultimately accountable for results, but don't directly control key execution points. Instead, the virtual enterprise must focus on orchestrating the workings of a complex supply network of specialists.

Success is now defined by how well the virtual enterprise works—how effectively it can deliver high-quality, low-cost goods to customers when they want, where they want, and how they want. A premium is being placed on the virtual enterprise's ability to deliver supply chain agility, foster and leverage supply chain collaboration, and sense and respond to change. The ramifications of not being able to do this are more severe than ever, since with a virtual enterprise, corrective action is no longer a function of walking down the hall to intervene.

Ensuring that the virtual enterprise works as desired comes down to empowering key staff with the information and tools they need to respond effectively to change. A decentralized organization requires decentralized decision-making so participants can act quickly while ensuring that each decision is aligned with the organization's key objectives. This is the sweet spot for Response Management solutions—and the key to why they provide tremendous value within these environments.