MOVING EFFECTIVELY TO ADVANCED LEVELS OF PROGRESS

As the business firm overcomes the pitfalls encountered in the early levels of
its supply chain progress and has its internal house in order, in terms of its
ability to develop and share best processing electronically and on an intraenterprise
basis, the transition to higher levels can occur. Now the firm moves,
with the help of a few carefully selected business allies, into an extended
enterprise or network environment, in search of higher orders of improvement,
which can bring additional benefits/values to all participants. Mattel, Inc. found
higher values in its network, when that toy maker used the Internet with the help
of designers and licensees to collaborate on new product design. The firm
moved design on-line so that virtual models of new products could be transferred
electronically, instead of through the usual manual system. Development
time was reduced by 20%. By digitizing and automating the transfer of information
between Mattel and its licensees, the company found that approvals
could be accomplished in 5 five weeks, instead of the normal 14.
Unfortunately, the idea of network collaboration does not come easily for
most organizations, nor does the technical means to facilitate such cooperation.
Indeed, the concept of creating greater value through an intelligent value network
can be elusive. In today�s business environment, selling value is an extremely
difficult job, as there are few people who understand the idea or will
expend resources to develop these values. Those willing to do so generally
reside at high levels in a few firms and are opposed by an army of others with
an incentive to continuously cut costs and save money, generally at the expense
of willing suppliers. It takes a strong-willed business leader, and supportive
supply chain managers with the help of information technology, to forge ahead
in the face of such obstacles. Lockheed Martin pushed forward in this area and
linked 80 of its major global suppliers into a network for designing and building
a new stealth fighter plane. As part of a $225 billion project, the firm is linking
a global network with real-time access so the key suppliers can work simultaneously
with other global partners. The expected savings could reach $250
million over the ten-year life of the project.