Issues and Trends

Running head: VALUE CHAIN ISSUES Issues and Trends in the Global Value Chain Darryn Urueta University of Phoenix ISCOM 383 Pamela Harris December 5, 2011 Issues and Trends in the Global Value Chain Global trends are changing on a seemingly daily basis. Global economies are weakening and some companies are discouraged by the condition of terror threats that are occurring. These threats are changing the spending behavior of the average customer. Not only is the customer not purchasing because of the economy, but businesses face the threat of shipments not being secure or not arriving in a timely manner. To lower cost, and increase benefits, the lean Six Sigma approach will benefit companies by improving strategies and tactics. Customs Trade Partnership against Terrorism will help to reduce terror threats. The goals set forth by the Customs Trade Partnership against Terrorism will have a significant, positive effect on ports across the globe. The training process will ensure the knowledge needed to protect the supply chain for all countries. Lean Six Sigma Competition for global companies is great in today’s worldwide market. With the popularity and ease of access to the internet, anyone can create an online company for the world to see. Lean Six Sigma can create an environment that can enhance the strategy of competition. According to Carreira and Trudell, â€Å"Lean Six Sigma is a combination of the best features of Six Sigma and Lean manufacturing. Six Sigma is an integrated, disciplined approach for improving processes by understanding and controlling variation, which results in an improvement in the predictability of business processes. The basic values of Lean manufacturing include high quality, low cost, short cycle times, flexibility, the continuous pursuit to eliminate waste, and customer-defined value. While the classic tools of Lean address process definition, high materials velocity, and balance, the tools of Six Sigma address data-driven variation reduction† (Lawson, 2007). Lean causes products to move through processes faster, and Six Sigma improves quality, so integrating the two complementary methodologies can yield even greater benefits than implementing them separately. Some companies find this process too complex to integrate into their system. These companies believe that the process of combining the two strategies would create confusion thereby unwillingness for employees to comply. The Lean Six Sigma approach can help any company lower its costs, improve the quality of its output, and increase its profits as it transforms into a more competitive organization. â€Å"By integrating the Lean principle of a system-wide analytical view; for example, the value stream, the total cycle of activities needed to produce a product or service, organizations can maximize the benefit from their improvement efforts. Lean Six Sigma can be viewed from both a strategic and a tactical perspective. † (Lawson, 2007). Global Trends of Lean Six Sigma In the current situation the entire world is in economically, the trend for Lean Six Sigma may be necessary for all organizations to implement. Across the globe, many countries are experiencing the effect of a global recession. According to Ghosh, â€Å"With increased availability of innovative technology and enhancements, more and more measurements are being put in place to understand, monitor and control processes. As we know what we cannot measure we cannot improve. Available data for processes will encourage predictive modeling tools under the umbrella of Lean and Six Sigma tools. This will enable organizations to become more proactive and help with prevention and improved response times. The lead time of implementation of Lean and Six Sigma projects will also be on a downward trend as a result of easier measurements with technology advancements, greater affordability and the evolution of Web 2. 0 tools to drive productivity and efficiency† (Ghosh, 2009). Customs Trade Partnership against Terrorism (C-TPAT) â€Å"The Customs and Border Protection (CBP) agency of the US government implemented a partnership with private companies after the events of 9/11 to help protect the supply chain. Customs-Trade Partnership against Terrorism (C-TPAT) was launched in November 2001, with just seven major importing companies. Currently over 7,400 companies in the global supply chain are enrolled in the program, including importers, customs brokers, terminal operators, carriers and foreign manufacturers. CBP’s C-STAT strategy is based on five goals† (Murray, 2011). These goals are ensure that C-TPAT partners improve the security of their supply chains pursuant to C-TPAT security criteria, provide incentives and benefits to include expedited processing of C-TPAT shipments to C-TPAT partners, internationalize the core principles of C-TPAT through cooperation and coordination with the international community, support other CBP security and facilitation initiatives, and improve administration of the C-TPAT program. The first goal signifies that profiles and information is secure. Terror threats against all ports of the globe are at an all-time high. The second goal of the Customs Trade Partnership against Terrorism enacted security assessment programs and training for all. This will ensure that all personnel are knowledgeable and are properly trained in order to detect such terrorist threats. The third goal is communication. According to Murray, â€Å"Partnering with the international trade community to help secure global supply chains and partnering with individual customs administrations will improve the coordination of mutual anti-terrorism efforts. Supporting the work of the World Customs Organization (WCO) to develop a WCO sponsored framework to secure and facilitate global trade that recognizes customs-private sector partnerships, and coordinate with international organizations to improve the security and integrity requirements of their membership† (Murray, 2011). The fourth goal will expand the Free and Secure Trade Program which will enable authorities to enhance the security of Container Security initiative while helping Homeland Security with antiterrorism programs and development. Global Trends of Customs Trade Partnership against Terrorism (C-TPAT) As international trade continues to expand, the global supply chain remains even more vulnerable to security threats. Despite efforts by importers and other supply chain participants to improve security, the danger of a terrorist attack involving the international transportation system remains high. Companies have also become aware of the vulnerability of its supply chains to an ever-increasing range of security threats and disruptions. While participation in the program has increased, and CBP continues to roll out minimum-security criteria covering new business types, a key category has yet to be incorporated into the program – third-party logistics providers (3PLs). While U. S. Customs and Border Protection has announced that security criteria covering 3PLs will be incorporated into the C-TPAT program sometime this year, it is unclear how they will develop a common definition for service providers in the o utsourced logistics sector (Anderson, 2008). The global trends of Lean Six Sigma and Customs Trade Partnership against Terrorism will be a significant part of the future of business. Combining the powers of Lean manufacturing with the essential tactics and strategies of Six Sigma will lower costs for corporations and increase competitive strategy. Forecasting methods, with Lean Six Sigma, will provide businesses the opportunity to enhance the skills they desire and be prepared. Lean Six Sigma will teach companies how to structure their operations to monitor data at the right places and times throughout the process in order to identify issues that need improvement before they become serious problems. A pro-active approach can save time, money and best of all improve customer satisfaction and product reliability. Supply chains are in danger of terror threats. Customs Trade Partnership against Terrorism is enhancing their service by combining five different goals to comply with securing the ports of entry. C-TPAT is voluntary at this time, but before long, this may change. C-TPAT will soon require mandatory participation. A major challenge of global trade is navigating customs requirements, and the complexities and processes that accompany shipping around the world among a company’s locations and with outsourcing partners. New security and compliance initiatives, trade agreements, customs regulations, duty rates, and import and export processes can make it more difficult than ever to conduct international trade. All countries and organizations should work together to create a terrorist free environment to enhance the global economy and protect the supply and value chain. References Ghosh, M. (2009). Projected Lean and Six Sigma Trends for 2010 Retrieved December 1, 2011 from http://www. processexcellencenetwork. com/deployment- management/articles/projected-lean-and-six-sigma-trends Anderson, B. (2008). Strengthening Global Supply Chain Security Retrieved December 3, 2011 from http://www. securitymagazine. om/articles/strengthening-global- supply-chain-security-1 Murray, M. (2011). Customs-Trade Partnership Against Terrorism (C-TPAT), Retrieved December 3, 2011. Lawson, R. (2011). Combining Lean and Six Sigma. (BOOKS). Strategic Finance (2007): 21+. General OneFile. Retrieved December 4, 2011, from http://find. galegroup. com. ezproxy. apollolibrary. com/gps/infomark. do? &contentSet=IAC-Documents&type=retrieve&tabID=T002&prodId=IPS&docId=A176083004&source=gale&srcprod=ITOF&userGroupName=uph oenix&version=1. 0