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From the Desk of Jack Healy

Collaborative Supply Chain is Economic Cluster That Raises All Boats

By Jack Healy, Director, Manufacturing Advancement Center, [email protected]

US competitiveness hinges not only on policies and investments at the national level, but on the capacity to foster clusters of innovation in regions across the country. A cluster, as defined by Professor Michael Porter of the Harvard Business School, is a geographic concentration of competing and cooperating companies, suppliers, service providers, and associated institutions.

For the past 10 years, our government, both state and national, along with various institutions, has launched many attempts to establish and promote such clusters as part of their economic developments initiatives. The results of such initiatives are dependent on the cooperation of competing companies within the cluster. Unfortunately, they have not proven to be very effective overall. 

More large manufacturing companies are facing the challenge of continually maximizing their own performance. As a result, many are now in the process of forming new natural manufacturing clusters, outsourcing more parts, materials, and functions to external suppliers and service providers. The problem today is not the formation of such clusters, but the management of their economic performance and the development of innovative capabilities within them.

Despite investment in overall controls, despite forcing suppliers to move to small lot materials replacement, and various other optimization methodologies, the economics of many supply chains is poor. Overall inventory level levels within the clusters have continued to rise for many different reasons.

Whatever the reasons, the result is an opportunity for manufacturers to profit from the better management of joint inventories, i.e. inventories produced by each supplier as well as inventories held by the OEM. Companies who do not recognize this opportunity will continue to operate at their own risk.

Lean Supply Chain Summit
Realizing the significance of these challenges, the Association for Manufacturing Excellence (AME) is holding a Lean Supply Chain Summit, February 20-22, 2007, in Henderson (Las Vegas), Nevada. The Summit provides you with the opportunity to expand your ability to manage excellence across your supplier chain through the process of Lean Management. Companies that pay heed to their supply chain management issues will be positioned to gain a significant advantage over competitors who do not. 

There are few competitive advantages today that can provide better results than the act of managing the complexity of your supply chain. This Summit will demonstrate the benefits of such improvement and how the improvement process lifts "All of the Boats" – your supplier’s as well as your own.

Register for the Summit


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