Supply chain - Optimising Returns for Developing Economies

Supply chain – Optimising returns for Developing Economies : Dr. H. Kwame Afaglo ©2010 Supply chain – Optimising returns for Developing Economies

Supply chain – Optimising returns for Developing Economies : Supply chain – Optimising returns for Developing Economies Specialisation thus encourages a wide range of producers and consumers across the globe and at varying prices. B2B (Business-to-Business) transactions have as a major part of the operations relied on supply chain and taking advantage of outsourcing for both profit and choice to enhance their accounts books. Hence supply chain is more of the preserve for B2B set-ups.

Supply chain – Optimising returns for Developing Economies : Supply chain – Optimising returns for Developing Economies The internet serves as the main vehicle for scouting for suppliers globally and having good knowledge of product. Supply chain is the practice of a business entity buying a product of any form for further processing or as finished product from another business entity and or re-sale to another Just-In-Time, with the intension of reducing cost and obtaining the most suitable product.

Supply chain – Optimising returns for Developing Economies : Supply chain – Optimising returns for Developing Economies An earlier postulated product matrix depicts the various types, forms and pricing of products for supply chain dynamics. Product matrix (Table 1)

Supply chain – Optimising returns for Developing Economies : Supply chain – Optimising returns for Developing Economies The product matrix (table 1) is indicative of all the forms and types of product that falls under the ambient of supply chain. Supply chain has brought onto the fall some salient marketing issues as: Globalisation B2B Outsourcing Strength of production base Just-In-Time (JIT) Minimisation of cost and maximisation of profits

Supply chain – Optimising returns for Developing Economies : Supply chain – Optimising returns for Developing Economies Globalisation – Marketers need competing platforms as B2B marketplace with easy access, safe methods of transactions, JIT (Just-In-Time) delivery and highly ranked in terms of efficiency. Internet as a vehicle is gradually moving various continental markets in this direction. Asian have www.alibaba.com United States of America (US) and Europe: www.amazon.com www.ebay.com Africa have www.asHime.biz and many more continentally operated internet based marketplaces.

Supply chain – Optimising returns for Developing Economies : Supply chain – Optimising returns for Developing Economies Outsourcing – process of acquiring product(s) externally with the intension of benefiting from cost, quality and efficiency in delivery time. Internet has accelerated outsourcing and firms of all sizes and functions are actively engaged in it. Clothing shop chains as Marks and Spencer, Burton, Dorothy Perkins of United Kingdom (UK) etc, have their cloths made from countries as Morocco, Pakistan, Indonesia of which are all developing economies, and at comparatively lower cost than if produced from UK. Hence, their mark-up is significantly from outsourcing. Supermarket chains, automobile

Supply chain – Optimising returns for Developing Economies : Supply chain – Optimising returns for Developing Economies manufactures and other sectors are seriously involved in outsourcing. Services as call centres, data centres and accounting are no different when it comes to outsourcing from destinations as; India, Singapore and Hong Kong. Giant financial institutions as; HSBC, Barclays, Standard Chartered among others, have their call centres in India. Citi has its part of its data centre in Singapore and other developing economies. Besides job creation as one of the benefits of outsourcing for developing economies, ‘capitalisation of feeder firms’ being the provision of funds for the strengthening and expansion of feeder firms of developing economies is another.

Supply chain – Optimising returns for Developing Economies : Supply chain – Optimising returns for Developing Economies Capitalisation of feeder firms is a win-win situation for both the feeder firms and the outsourcing ones. In that, the outsourcing firm does not only provide funds for expansion and continuous supply of product(s) in defined form(s) but to meet agreed standards and provision of advanced technological know-how for the success of outsourcing. Say, an a fuel dump needs vegetable oil as bio-diesel for vehicles from Ghanaian farmers. As part of the capitalisation of feeder firms agreement, the outsourcing firm must do well to provide funding for the defined period of defined supply, provide

Supply chain – Optimising returns for Developing Economies : Supply chain – Optimising returns for Developing Economies technological tools and knowledge to production source and install appropriate computer software (internet or intranet) to ensure consistent supply of product(s) and by defined time. Just In Time (JIT) With firms in developing economies serving as the feeder firms in outsourcing, the concept of capitalisation of feeder firms places an onus on outsourced firm to supply product(s) by defined time to replenish stock of outsourcing firm, which is Just In Time (JIT).

Supply chain – Optimising returns for Developing Economies : Supply chain – Optimising returns for Developing Economies Internet, intranet, telephone and other electronic tools must serve as part of the capitalisation of feeder firms to ensure JIT. Automobile giant Toyota is a leading firm in JIT, other firms have this system in place and only need to integrate it as part of the capitalisation of feeder firms. ACP countries producing finished products for retail chains must do well to negotiate for the introduction of ‘capitalisation of feeder firms’ as a form of security. Morocco supplies Marks and Spencer with clothes, Banana from Caribbean countries and Ghana on the shop shelves of leading retain chains, so is flowers from Kenya among others.

Supply chain – Optimising returns for Developing Economies : Supply chain – Optimising returns for Developing Economies Supply chain and outsourcing is an inevitable part of international trade and so both parties must work towards a win-win situation with ‘Capitalisation of feeder firms’. Thank you