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In recent comments, Dennis Omanoff, SVP of supply chain and procurement for hard disk drive giant Seagate Technology pointed out that Thailand accounts for 25 percent of the world’s production of hard disk drives. When massive, widespread flooding hit the area in 2011, the result was $46 billion in economic losses.
It seems that we are good at tallying the losses from supply chain disruptions but less skilled in measuring the value delivered by efficient supply chains.
In valuing a company for an initial public offering or an acquisition, the balance sheet will reflect revenues, assets, receivables and a number of tangible items. The term “good will” may also appear and offers someone’s perception of the positive value of name, reputation, brand loyalty or any number of other elements of the business which are difficult to quantify in hard numbers.
Supply chain alliances are a lot like good will. The strength and longevity of the relationships, the collaboration and cooperation to achieve common goals, continuous improvement and a host of other positive attributes fall under that term, “alliance.”
World Trade 100 and SMC3 have formed an alliance of our own to find and recognize supply chain alliances that represent best practice not only in an operations sense, but also as a mutually beneficial business relationship. Our Alliance award seeks to quantify results along with the depth and quality of the supply chain partners’ relationships. How did each partner in the supply chain contribute to an improved outcome?
The application for the Alliance award requires the participation of multiple supply chain partners and asks how each contributed to a measurable, quantifiable result. We believe this is what makes supply chain management a powerful business strategy and we hope we can help quantify some of the value supply chains deliver when they reflect the positive values of close cooperation and true partnership.
For information, visit the Alliance award site: WT100 Alliance Awards