International Trade Facilitators

Logistics and Supply Chain Specialists

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What is Supply Chain Management?

There are many definitions of Supply Chain Management (SCM) that describe its purpose as the design, planning, execution, control, and monitoring of supply chain activities with the objective of creating net value, building a competitive infrastructure, leveraging worldwide logistics, synchronising supply with demand and measuring performance globally. 

The term SCM is often confused with and used interchangeably with the term logistics.  In practical application, logistics activity provides a framework for creating a single plan for the flow of products and information through a business and SCM develops this model further by seeking to link and co-ordinate the processes of other entities in the pipeline or network.  This effort to align goals, share resources and collaborate across organisational boundaries is the fundamental purpose of SCM.

Modern business strategy trends and outsourcing solutions have supported a growing requirement for SCM and robust international distribution channels.  This phenomenon is largely due to the expanding global market place with organisations competing globally and sourcing from a myriad of international vendors.  The complexity of global competition has shifted the focus from vertical integration strategies (where a company owns its upstream suppliers and its downstream buyers and is typically engaged in different parts of production including manufacturing, transportation, marketing, retail etc.) to outsourced alliance and partnership solutions.  This strategy allows companies to focus on core competencies and introduce other organisations with specialty skills that cannot be equally replicated in-house.   This is where 3PL and 4PL providers come into the mix, and as a 4PL provider, our specialty is managing the outsourced logistics function of a business and aligning all other 3PL vendors to establish the best fit supply chain model.

As a 4PL, our involvement with SCM is intrinsically linked to international trade through the increasingly expanding network of organisations that are required to successfully fulfil customer expectations.  The influence of global competition and sourcing means few organisations operate in uniquely local markets, with many companies engaging in some form of offshore vendor or customer relationship management.  A focus on establishing the correct mix of internal and outsourced activities is a fundamental aspect of supply chain design and if managed well will result in the supply chain itself becoming a source of competitive advantage.

This modern management of global networks require a total systems view of the links in the value chain that work together efficiently to create customer satisfaction at the end point of fulfillment. Costs should be lowered throughout the chain by driving out unnecessary expenses, movements, and handling, with the main focus turned to efficiency and added value, and the end-customer’s perception of value. In essence however, SCM is relationship based and relies heavily on a network model with high levels of trust and sharing.

We believe that the relationship aspect of SCM is by far the most significant and challenging feature   of SCM.  The successful co-ordination and performance management of highly complex relationships and information flow, both internally and externally is a critical aspect that requires time and resource.  The task of dealing with multiple 3PL’s can become a cumbersome and difficult process however we understand that the utilisation of resources and distribution channels, in conjunction with establishing and maintaining relationships from upstream partners through to downstream vendors is critical in achieving the ultimate goal of end customer satisfaction.  We also recognise that this activity is heavily reliant on the ability to establish, maintain and measure relationships with external supply chain and logistics partners.  Companies that foster close, collaborative relationships with key suppliers tend to create greater value for customers and enjoy a competitive advantage.  It is this value proposition that drives SCM, and is the basis of our unique perspective on logistics as an integrated industry, and supports our approach to customer satisfaction.