Yet, with 2014 fast approaching, this is as good a time as any to review four of the key learnings from the manufacturing sector’s supply chain in 2013. There were of course many more – but the items below are among the most important developments of the past year in supply chain matters, in the view of the the Open Computing Alliance.
Thailand’s manufacturing sector adapts quickly to change
Thai executives are used to managing adversity. Whether political challenges or natural disasters, Thai executives are adept at maintaining and even growing their business during turbulent times. Thai executives are also eager to lead industry standards. Thai trade associations, such as the Federation of Thai Industry and the Thai Auto Parts Manufacturers Association, do a great job of educating their member companies about the latest developments in business. “Thai trade associations should be commended for alerting their members to international trade challenges, and providing solutions,” said OCA Secretary - General for Asia Pacific, Michael Mudd.
Clean supply chains are more important than ever
Consumers and trading partners want to do business with companies that have clean supply chains – and can prove it. Companies with strong supply chain practices will thrive. Manufacturers that have weakness, or even perceived weakness, in their supply chains, including legal, safety, health or environmental issues, will not sustain their business. It is now possible to prove clean supply chains in numerous ways, including independent auditors. There are also web portals, such as Verafirm.org, that allow Thai manufacturers to demonstrate their clean supply chain status for IT compliance to buyers in the US. Nearly 50 Thai companies have already registered for Verafirm.org, and the number is expected to grow quickly in 2014. “Verafirm gives our suppliers peace of mind about our IT compliance, said Mrs. Alisa Phurkwattanagul, Managing Director of Sinchai Coldstorage Co., Ltd. “Sinchai Coldstorage is compliant – and Verafirm is a good tool for us to demonstrate this.”
Legal IT and software is becoming the norm
No longer do importers and buyers in the U.S. overlook legal IT and software. Big buyers in the U.S. want suppliers in Southeast Asia that they can count on to abide by local laws and international best practices. Kasetsart University professor Dr Sukumal Kitisin says that new U.S. Unfair Competition laws that forbid use of pirated software in goods and services bound for the U.S. will eventually “require all manufacturers to ensure they are using legal software. Manufacturers know that risking big orders by way of using pirated software is an irresponsible business decision.”
Gaps in Thailand’s supply chain management are narrowing
In more than a dozen cases this year, authorities have found manufacturers with illegal IT and software. These manufacturers are part of the global auto supply chain, the global food and beverage supply chain and the global garment supply chain. Cases worth highlighting include Chinese and Indian garment makers sued by the State of California, a Brazilian aeronautics company sued by the State of Washington and Thai food and automotive components companies sued by the State of Massachusetts and State of Tennessee, respectively. Yet we know that in Thailand, more and more manufacturers are getting on board with good IT supply chain practices. Thailand’s software piracy rate is consistently falling, and is expected to continue falling in 2014.
About the Open Computing Alliance
The Open Computing Alliance (OCA) charter is to build a community of interested parties to address issues of mutual concern across the information and communications technologies (ICT) sector, including the impact of the emergence of Cloud Computing.
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