SUPPLY CHAIN DEVELOPMENT
International SME supply chains are comprised of two distinct members: those you sell to and those you purchase from.
Those you sell to are motivated by price 1st, relationship 2nd and quality/support 3rd , where price opens the door, relationship makes the deal, and quality/support seals it.
Those you buy from are motivated primarily by the quality of the relationship, as they seek reliable and stable customers who they can trust to pay on time, and can’t rely on, or afford to enforce, commercial contract law.
A major difference in how a firm operates in emerging markets is that much greater vertical and horizontal integration is considered the norm, however for resource constrained SME innovative methods must be found. Corporate law in any country is slow, expensive, and favors large corporations.
To compensate, SME in emerging markets use relationships as the default arbiter to manage supply chain risk, and the quality of the relationship will often be considered ahead of the law, with respect to contracts, negotiations and dispute resolution.
Therefore, the product or service being traded is secondary to the quality of the relationship within in which trade is being conducted, and doing business is not simply a legal transaction.
XPM can help develop efficient conflict resistant supply chains, assisting clients to quickly become a fully integrated part of a dynamic, innovative and entrepreneurial environment.