Excerpt from: China Supply Chain and Logistics Strategy
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| September 01, 2006 | | Responding to Chinese Competition | There is an urgent need for change in business leadership in the West. Chinese manufacturers continue to enhance their quality and many believe the Chinese are encroaching upon Western production. I agree that in response to the continued outsourcing of manufacturing to China Western workers should be preparing to 'create value through leadership'. However, we need to ask ourselves what is leadership? What is value?
What is Value? I argue that value lies in placing the customer as well as society at large (includes all affected, from original producer to final end-customer) at the center of your enterprise. The priority is placed on improving your internal organizational capabilities so that all of your energies are focused on providing service. Effective value creation would align your organization’s selling approaches, performance indicators, and logistics operations with your customer’s dominant buying behaviors. This idea is of ‘dynamic alignment’ is discussed in ‘Living Supply Chains’ by Johhn Gattorna. He also discussed this idea at the recent CSCMP event in Shanghai.
What is leadership? Leadership needs to be backed up with clearly articulated enduring values and vision. The principals of leadership in today’s “flat world” are the same as they were 2500 years ago. What the world needs now more than ever are business leaders who hold strong unshakable values based on enduring truths which stand the test of time.
One very basic value that should remain uncompromised is that we are in business to serve. In order to serve the customer we need to understand their buying behaviors and align our supply chain to serve those needs which are wholesome and basically in-line with the core values of the organization. Core values such as protecting the environment, worker’s rights, reducing waste, etc. need to be maintained.
Instead of being caught up in the winds of change, with the constant bombardment of ephemeral ideas, we need to first anchor ourselves. We need to know what our values are and be careful not to confuse values with ideas. As discussed by LeaderValues, ideas can be born at “Internet speed”, but values take time and energy to create and take hold in an enterprise. Ideas are fast but values are slow. As change leaders we need to understand the difference in meaning and impact between ideas and values, as well as the difference in their speed.
Thus, in response to the competition in China ‘Western’ business leaders need to put more energy into their values and aligning their organization with the buying behaviors of their customers. While supply chains need to become more demand driven they also need to become more socially responsible. The race of Chinese manufacturers to compete in high-end manufacturing is resulting in rapid environmental deterioration, worker’s rights abuses, and overall materialism. In the long run, such supply chains are not sustainable.
Leaders from the ‘West’ possess marketing savvy. The 'West" also has the wisdom of knowing what comes after the industrialization of the economy. We are faced with the problem of how to live in harmony with others and the environment. Finally, we need to take a stand and be uncompromising in our integrity. This will ultimately endure the test of time.
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