by Sebastian Hölker, Head of Innovative Trade Products, UniCredit
Many assume that globalised supply chains come hand-in-hand with the centralisation of management processes. But this doesn’t make sense for all aspects of the supply chain, and in a globalised economy, local expertise is increasingly important and each supply chain needs to be approached according to their individual characteristics, argues Sebastian Hölker, Head of Innovative Trade Products at UniCredit.
There is no doubt that globalised supply chains have created a huge amount of efficiency for companies worldwide. For many, perhaps the natural next step would be centralisation by consolidating the control of similar processes in a single location. Indeed, already many such processes – such as cash management and IT infrastructure – have been centralised to good effect by forward-thinking companies.
But other elements equally important to supply chain managers – such as national regulation and rules governing important financial aspects such as credit risk analysis – are proving more difficult to centralise on account of their regional nuances. In our view, it is increasingly important that companies do not lose sight of the value of local expertise for these components. In fact, we believe that the most effective strategies of the next few years will be carried out by supply chain managers who leverage local expertise while building their international supply chains.
Some centralisation is beneficial
The banking crises have revealed that doing business with one bank alone can expose firms to an unnecessary level of risk concentration.