In the nineteenth and twentieth centuries, companies tended to conduct most, if not all, their business in-house. The Ford Motor Company famously owned the plantations to that provided the rubber needed for its car tyres as well as iron ore mines and steel making capability for its body panels and components.  (supply-chain-consultant)

The company also owned and operated its own distribution and sales networks right down to the salesmen in the showrooms. The Ford Motor Company was what is known as a vertically integrated organization.

In the late twentieth century and early twenty-first century in response to competitive pressures, advances in technology and the deregulation of international trade and finance companies began to focus more and more on their core competences, outsourcing and subcontracting many non-core activities. Additionally, businesses increasingly sought market opportunities overseas both on the supply side and on the demand side to continue to grow, expand and thrive. Consequently, the economy of the world we now encounter as we approach 2020 is one that has become very intertwined across national frontiers. This reality gives rise to myriad and complex choices for business strategists regarding where and how to procure materials and supplies, carry out the different stages of the manufacturing process and to market and sellproducts and services.

In tandem with this and particularly since the Great Recession of 2008, the world has been experiencing increasing disruption and volatility at the economic and societal level. The rise of China and other developing economies, austerity in the European Union, and increasing political polarization in the developed economies, on the one hand combined with technological developments such as the rise of platform business models, social media and mobile technology on the other, have radically altered the familiar world that decision makers had become accustomed. Furthermore, the pace at which old models and approaches are becoming obsolete has been increasing notably in recent decades. Some may believethat this is a temporary phenomenon and that things will revert to norm in time. It isn’t and they won’t. The fact is, that to be successful and thrive in the future we now need to accept this as the new normal and adopt strategies and capabilities that can help us manage our businesses better in this environment.

With a combination of so much change and so many options, it can be bewildering for strategists to decide what the best approaches are to protect their businesses from challenges and threats on the one hand and to take advantage of the opportunities available on the other. The choice of operating strategy depends on many competing factors. These include the strategic objectives of the business, and its driving force, its size and location and its operating capabilities. There is no single magic formula that works for all companies. Each must learn to discern and quantify the real threats and opportunities that it faces and formulate and implement strategies accordingly that can adapt as disruption and volatility continues to present new challenges and opportunities on an ongoing basis.

Meanwhile, technological development and innovation proceeds apace. The internet is giving rise to myriad platform-based business models. These are changing the balance of power and the rules of competition in many sectors. Additionally, the data collected and analysed by these platform owners provides them with unprecedented insight into the behaviour, desires and needs of customers. Robotics is breaking new barriers with the advent of “collaborative robots” equipped with artificial intelligence that can work in close physical proximity to humans in the work place. This is radically altering the physical and intellectual nature of work and the skills required. The Distributed Ledger Technologies that underpin blockchain applications are opening many new opportunities in terms of security, confidentiality, productauthenticity and ultimately on business efficiency. All together these changes constitute a veritable fourth industrial revolution that both businesses and individuals will need to learn to deal with to thrive and prosper in the future.

As businesses has moved away from exercising integration and control of the supply chain through ownership and moved towards exercising integration and control through relationships, the role of logistics service providers has grown exponentially over recent decades. This has enabledcorporates to focus more and more on core competences and to extend their operating models internationally. These logistics service providers have become crucial supply chain partners that provide the services that enable international companies to connect their operations, manage their inventories and reach their customers through the provision of a range of capabilities and expertise that continues to grow and develop. Many of these logistics service providers have themselves become large multinational corporations, who can deliver warehousing, transport and many other value-added services in quality, finance, and compliance on aninternational basis. The likelihood is that if your business trades internationally you will need to learn to build and manage high-quality relationships with these logistics services providers to help your business to grow and prosper.

This is the fragmented, rapidly changing, volatile and disruptive business world that we live in today. This is a world of many daunting challenges but also one of plentiful exciting opportunities for those who are can successfully combine ambition with prudent risk taking. To discuss how I can help your business to thrive in this world, please contact me directly by email, pdaly@albalogistics.com or phone +353 86 811 6030.

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