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Friday, March 9, 2018

The Value of Supply Chain

A new article was recently printed in the Harvard Business Review related to Supply Chain investments and creating innovation in this arena. You can read the article here https://hbr.org/2018/03/the-supply-chain-economy-and-the-future-of-good-jobs-in-america
I wrote about the last article and am somewhat watching this research for my own purposes.

I'm working on developing an economic approach to hubs and clusters. Supply chain creation among local businesses is an important consideration. Large companies often have smaller companies within the same area. They supply them with needed resources, tools, labor, and other things they need that are outside their core business.

The supply chain connects them together as well as other clusters that exist in the area. When two large clusters are in one area they often interrelate and share knowledge to generate innovation. This depends on what those clusters are but they do have similar needs and many times share vendors.

Innovation leads to growth and change and this comes through the supply chain as well as through the sharing of spill over knowledge, drawing skilled employees to the area, higher education, research, and the utilization of better infrastructure.

Supply chain creates significant value for companies. The way in which materials move through a system and are shifted, adjusted and changed will lead to value added products/services that can be sold on the more. The better they sell the higher the profit margins and the more jobs, tax revenue and economic growth.

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