It’s time to stop thinking about sourcing as a distinct activity from transportation and trade compliance, a reality crystallized at a recent AAFA event.
Sourcing raw materials, parts or finished goods is a fundamental component of any supply chain.
In fact, linking sourcing directly to transportation and trade compliance is what takes a freight management process and makes it a supply chain process. That was a big part of the message I learned during the American Apparel & Footwear Association’s Strategic Sourcing, Customs, and Logistics Integration Conference in Washington this week.
AAFA has been holding this event for more than a decade, and while the name is a mouthful, the idea behind it is sound. The lines between sourcing and transportation and compliance are blurring ever more. As Duncan Scott, vice president of external products for New Balance Athletic Shoe, said in his keynote on Tuesday morning: “IT is making a huge impact on the end-to-end supply chain, and its impact is accelerating. IT is starting to live up to its promise.”
The idea that IT is behind this integration is no surprise. Technology has been driving the integration of previously disparate processes for years. It’s not easy to do, both from a change management and a systems integration process.
But it sure seems worthwhile. Imagine the power of getting product design, procurement, risk management, trade compliance, transportation, and IT all on the same page. That’s in lieu of the product design team coming up with a product that the procurement team has trouble sourcing, in a market where the transportation doesn’t get advantageous freight rates, and from a supplier that the trade compliance team can’t verify.
Putting this process ahead of design (much less production) means companies, as one shipper at the AAFA event aptly said, “fail small and fail quickly.”
Start thinking about how you can first communicate better across these critical functions, and then about what systems are going to stitch together the data that connects departments. It’s out there.
Commentary: Ties that bind sourcing and logistics
