Global Supply Chain: The Next Frontier

Ship Building Project. Photo/Bresslau.In May, the 2008 MBA class at the Mannheim Business School took the Global Supply Chain course with Prof. Dr. Stefan Minner. Sven Martin, Manager at BearingPoint Zurich, took the class through a case study example on logistics and environmental responsibility.

Now that the “Lean” philosophy has been generally accepted, we discussed the next developments in the field. The two major themes were the role of increasing energy prices and new technologies in information management.

All the slack that was once present in inefficient routes, engines and vehicles has been effectively dealt with in the past few years. Efficient technologies will continue to advance, but will generate less drastic savings than before.

The actual cost of transportation and energy justifies the redesign of many supply networks. If energy prices stay as they are or increase, corporations will certainly rethink their outspread supply strategies, bringing suppliers, production facilities and distribution centres closer to the main markets, as transportation costs counterbalance any savings gained in lower production and labour costs.

Moving to the second theme, new technologies like RFID tags have enabled a new level of IT integration. Information is now ubiquitous but still very dependent on human input and control. Now, new ways to use portable information devices are possible.

To imagine a warehouse where every single item has its own RFID tag to track its movements in real time is not a virtual exercise anymore. The “internet of things” is growing; the boundary between pure information and material objects is getting fuzzier at ever higher degrees.  As a result, inventory levels can be expected to be reduced still further and JIT will become more accurate, efficient, reliable and flexible.

Fernando Bresslau is a Brazilian engineer with an international background in technology and marketing. After studying in Canada and England, he is graduating in September 2008 from the Full Time MBA at Mannheim Business School, working towards a job in Strategy Consulting.

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