Another day, another article trying to figure out how to simplify global supply chains… without realizing that the easiest way to simplify them is to eliminate the "global" aspect. But what more would expect from our friends at McKinsey?
Yes, wonders they are. Too bad they don't work very well. Why is that?
The horrors! Inventory buildup? Why would anyone expect that when adding a few thousand miles to be traversed by huge container ships? On-time delivery problems? Why, who in the world would think that would become a problem when moving manufacturing a few time zones away?
So what's the fundamental problem, according the brainiacs at McKinsey? Why, "collaboration" of course! Why the heck is that?
For a host of reasons rooted in the way they are organized and compete, their executives have been less than enthusiastic about pursuing the benefits of collaboration with their supply chain partners.
I'll try to keep from laughing at the obvious for a moment, and let's dive a little deeper into McKinsey's "analysis."
 High-tech OEMs need hundreds of components from a broad range of global suppliers, which themselves lie at the center of even farther-flung supply chains comprising second-tier companies that make subcomponents.
 OEMs in many industries organize themselves around functional units. But in high technology (and other assembly industries), units such as manufacturing, sales and marketing, and product development often send conflicting forecasts of demand and production to their partners.
 OEM forecasts often aren’t granular enough to be useful to supply chain partners. Typically, OEMs set broad targets across a number of product lines rather than provide details on expected unit sales for specific products. That combined with rapid product obsolescence makes getting a fix on true demand difficult.
 Given the intense and unpredictable nature of competition, high-tech executives often believe that they must guard information on their business plans and processes closely. This perceived need for confidentiality—OEMs reason that since their suppliers provide parts to competing OEMs, shared data isn’t secure—directly affects suppliers.
Ok… sounds like a lot of problems. But I'm sure the reduction in labor cost somehow makes up for all of that. Yeah, right. Are you sure the root cause is "collaboration," or should you ask "why" a couple more times and end up at "traditional accounting" or "outsourcing is always the answer lemming mindset" or…?
What was the total cost again? How does that compare to the total cost of working with domestic suppliers, if not your own internal operations?