Distribution Systems Concentrated Clustering - 812 Words

LOG502 | Distribution Systems: Concentrated Clustering | Case Assignment - Module 2 | Jaime 10/30/2012 | The Core of Concentrated Clusters Since the definition of supply chain management is, the oversight of materials, information, and finances as they move in a process from supplier to manufacturer to wholesaler to retailer to consumer, it only makes sense then that placing each part of the supply chain in close proximity to one another makes for easier oversight. (Rouse, 2010) This is the basis for the clustering theory. (DeWitt, Giunipero, amp; Melton, 2006) Not just in theory, but in practice as well, clustering has proven to give those companies involved in a supply chain distinct competitive advantages via its†¦show more content†¦This all serves to make more options; with more specialized capabilities, available to the workings of a supply chain. How Clustering Varies Among International and Domestic Firms The fact that international firms are physically separated doesn t inhibit them from enjoying the benefits of concentrated clusters. Ideally, clusters are formed via physical proximity but clusters can also be formed when each member of the chain is in some way interdependent on the others. This interdependence makes for easier supply chain management in that there is intensified focus on a common goal and a higher degree of commitment by everyone involved. As the relationships in these clusters mature, trust grows and conflict is decreased. Interdependence also encourages the sharing of privileged information among each part of the chain. This aspect of clusters even allows the companies to be more in tune with each other s needs and ultimately the needs of the end user. International firms can also keep the clustering concept in mind when choosing the location of its global branches. Participating in already established local clusters should be an option in the minds of managers. Furthermore, firms should implement the geographical clustering of their supply chain wherever they can, even if it is only at a couple of levels.Show MoreRelatedTraditional Trade Theory, New Economic Geography Theory And The Interplay Between Globalization And Competition1602 Words   |  7 PagesPost-Fordist countries predominantly trade goods of a similar product type, i.e. it is intra-industry trade. Throughout the 1980s, new trade theory models were created, primarily for explaining intra-industry trade. 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