The Newest Supply Chain Model

Last updated on March 19, 2019

In the traditional business world, relations between organisations were different from what they are today. Collaboration between organisations – if there was collaboration – used to follow a linear model. In fact, when several organisations had to collaborate, they used to do it through a very linear model, with traditional supplier-buyer relationships. This model is based on rigid hierarchical structure between the different actors. Although it could work in the old business world, it is a little more complicated today. However, the problem is that many organisations have not evolved according to the new globalised business world, and they are still using the traditional model. The key word for today’s business world is “network”. In fact, no business can be successful if “network” is not the basis of its logic. You can learn more about the importance of global business networks in Vivek Sood’s book, The 5-STAR Business Network (http://bit.ly/5-STARBN). Any decision and project must be based on the network today. Therefore, companies first have to build an efficient global business network, which will be the basis of its supply chain and its entire organisation structure. Thus, this is the first step for any single organisation. Besides, businesses do not act alone today: network involves multiple relationships and interactions between businesses. That is the reason why your supply network must be very flexible; it is because interactions are infinite. Therefore, when interacting together, in a business network, organisations have to do it in harmony, and with flexibility in their structure. The production teams and the procurement teams work together, to provide the best product to the customer. Collaboration is necessary in the relationship among the supply chain partners to create, market and sell the products. Likewise, collaboration is also required to make the products, move and store them. In other words, we have no choice but to admit that collaboration is necessary to build a great supply network and manage efficiently our supply chains. In effect, in today’s globalised world, collaboration is necessary during the entire process, so your supply chain can give the best results. Besides, your customer will be satisfied because of the efficiency of your supply chain, which will produce in the shortest period at the lowest cost. Then, your customer will have a good product, in a short delay, and at a reasonable price. That is the reason why you do not have other choice if you want to beat your competitors in the market place. Besides, your business network would be so big and efficient that your business will benefit from their know-how and knowledge. Therefore, you can also expect innovations. You will benefit from your partners’ innovation, which will help you create even more value than with your own innovation. Consequently, the power of modern supply chain models lies in collaboration and interaction. In effect, modern organisations cannot keep following the traditional linear model because there are many more businesses involved in a business network today than 20 years ago, for example. To summarise, let us say that today, supply chains involve many actors, which means that businesses must collaborate in a very flexible way, in order to get the best from each partner and provide the best product for the customer. This will lead to better results for businesses.

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