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Extended value chains should be designed for harmony.
If we consider a company’s entire value chain, including its vendors, contract manufacturers, 3PLs, distributors and retailers, we often see friction at the interfaces. Such a friction leads to higher cost, poor customer service and mismatch of inventory.
It is possible to design the extended value chain for harmony so that the interfaces are smooth and efficient. Information, goods and money should flow seamlessly across various partners.
Harmony requires that the relationships be based on trust, transparency and inter-dependence. If a partnership lacks any of these, it pushes up the cost and lowers the overall supply chain effectiveness.
What steps are you taking to improve trust, transparency and inter-dependence with your partners?