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Large Companies Increasing moving Supply Chain Processes to Global Business


Many large companies have transitioned at least some of their business processes to a global business services (GBS) model. Using the GBS model means developing shared services across different business units and geographies, and is sometimes combined with a “center of excellence” approach.











Supply Chain Digest Says…

 

Hackett adds that digital technologies can further enhance the scale advantages and enable GBS to add more value.






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While the GBS has generally been used to deliver back-office processes such asfinance and human resources, research from consulting firm The Hackett Group shows processes in supply chain have emerged as worthy GBS candidates, as companies look for opportunities to improve supply chain operational efficiency and effectiveness.

In a recent research report, Hackett says GBS adoption for supply chain management and order management/customer service is still limited, but is starting to grow. A recent survey of GBS organizations by the firm found 24% of them support supply chain and 31% support order management functions. Moreover, another 10%-15% of GBS organizations expected to expand into these areas in the next few years.

Hackett says the following are the types of supply chain activities that are moving into GBS structures:

Supply Chain Logistics and Transportation Activities: These include inbound and outbound transportation, reverse logistics and logistics strategy. Hackett cites as an example Dow, which has moved operations for truck, rail and marine, third-party logistics management for bulk and warehouse, and international trade operations into a GBS organization. Similarly, Cargill has shifted transportation and logistics into GBS. The two companies “have not only driven operational efficiencies, but also provided both companies with competitive differentiation,” Hackett says.

Direct Procurement Activities: These include transactional activities such as requisition, receipt and purchase order processing, as well as sourcing, contracting and negotiations for direct spend categories.

Manufacturing Activities: While production execution remains within the BUs and plants, companies are placing activities such as manufacturing strategy and maintenance management in GBS.

Supply Chain Planning Activities: Hackett says companies are…



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