Monday, November 30, 2009
Are supply chains disappearing?
I certainly hope not, what would I blog about?
But today in the Wall Street Journal an article highlights the trend that many companies, including Oracle, Pepsi, General Motors and Boeing, are all buying their suppliers and/or partners or investing in them for one reason or another.
While this doesn't signal the end of the global supply chain it is a shift worth noting. As some readers have commented these shifts are cyclical and based on the market. I would agree. But I would also say, this is not a one size fits all answer and "going vertical" doesn't mean owning the entire supply chain.
Apple does quite well owning both the software and the hardware of its products, but it still requires its chips from Intel. The same for Pepsi, they are attempting to buy two of their major distributors, but I don't think we will see Pepsi buying the glass company that provides its bottles.
So a line has to be drawn, where it is drawn is up to the company and the market they are in. Too much control can be costly.