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THE NEW CRITERIA FOR MANUFACTURING SUCCESS

By Littleson, Randy
Publication: Industry Week
Date: Wednesday, February 1 2006

HEADNOTE

Response Management

N ot too long ago, all you heard about was vertical integration. Manufacturers would strive to integrate all aspects of their supply chain to gain complete control over their operations

and performance. Boy, have times changed. Now the mantra is specialization-outsourcing non-strategic operations to the global market of goods and services to gain cost advantage and focus on core competencies.

Yet these trends have also opened up unparalleled options for customers, who can tap into the same global market manufacturers can. Competition is now just a mouse click away, because customers can easily shop online for the best service, price, quality, and customization to meet their exact requirements.

As a result, companies are being forced to reevaluate the criteria for success. Specialization has created "virtual enterprises" that are ultimately accountable for results, but don't directly control key execution points. Instead, the virtual enterprise must focus on orchestrating the workings of a complex supply network of specialists.

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