Nope, that’s not a typo. I really did mean glocal. In case the term is new to you, glocal, in a supply chain context, is the blending of global integration with local responsiveness. I first heard the term only a few months ago during Zoltan Pekar’s presentation at our annual training and user conference, Kinexions. Pekar, the VP of Roland DG’s Global SCM Division, gave some interesting insights on the changing role of IT in supply chain. You can check out a recap of his presentation in my blog The Changing Role of IT in End-to-End Supply Chain Management or check out his presentation yourself on our YouTube channel.
What really jumped out for me during his session was this idea of glocalization. As defined by the source of all knowledge, Wikipedia, “glocalization is the adaptation of globally marketed products and services to local markets.” And apparently the term has been around since the late 1980s, first appearing in print in the Harvard Business Review.
Global companies have been using glocalization for years when it comes to products and services. Restaurant mega chain McDonald’s is an example easily identified by most. Their regional menus offer things like the Chicken Maharaja Mac in India, the Croque McDo in Belgium and the KiwiBurger in New Zealand. Automotive manufacturers are another great example, although many of the differences between European and North American car models are due to specific regulations, with the most obvious being which side the steering wheel is on and whether the speedometers show miles per hour of kilometers per hour.
But what are the supply chain implications of glocalization? And, how do supply chains actually become glocal themselves?
Well the answer to the first questions is probably pretty obvious. Global companies need to account for regional variances in product preferences. As mentioned, this isn’t anything new or particularly Earth shattering (although it might have been when the concept was first introduced – as I was still in diapers, I can’t really attest to that). That means supply chains need end-to-end visibility across all nodes of the value chain, regardless of geographic location.
They also need the flexibility to respond to changing regional supply and demands quickly and efficiently. There needs to be an effective system in place to manage demand across multiple global and regional locations, as well as across product hierarchies. That means generating demand plans with input from all stakeholders – including sales, marketing, operations and finance. And optimizing inventory. You must balance market and customer needs against supply chain capabilities and risk. Planning, monitoring and responding concurrently is a critical factor in a company’s ability to know sooner and act faster.
It’s those same characteristics that help supply chains become glocal themselves, blending global integration with local responsiveness. But there are certainly challenges when it comes to glocal supply chains. The first is overcoming the multitude of disparate systems used across each location. It’s not uncommon for companies to have numerous ERPs systems, a smattering of Excel spreadsheets and dozens of other archaic systems in place – especially if they’ve grown through acquisitions, which is often the case these days.
Harmonizing all that data requires an overlaying supply chain management solution that can collect and analyze information from all sources, all while using advanced analytics to output multiple scenario options when changes need to be made.
Disparate processes also present a problem when tackling a glocal supply chain. Decentralized authority, which can accompany regionalization, results in each location working toward its own goals and objectives, instead of focusing on company-wide metrics and KPIs. The focus needs to be on the company as a whole, not its individual parts. Now I’m not saying each region can’t operate slightly differently – holidays, working hours and cultural differences are to be expected. But the overall processes and measurements need to stay consistent.
Bringing together the people involved in your supply chain is also a necessity. Overcoming this supply chain obstacle means finding a way to foster better company-wide collaboration, regardless of where employees and operations are based.
By connecting data, process and people, you’ll be able to successfully manage a glocal supply chain, one that’s globally integrated and functioning as a holistic whole, but still provides the responsiveness required to meet local and regional requirements.
What do you think about glocal supply chains? Let us know in the comments section. We’d love to hear your thoughts on if this is a supply chain trend you’re interested in following.