What kinds of strategies and organization do companies that choose dynamic over static distribution networks have?
We found that the internal operations of companies successful in the use of dynamic distribution networks are highly integrated, with common performance measures and operation norms that extend across the entire organization. You don’t see one function optimizing its own performance at the expense of others. This is important when managing an extended trading community. A company should show one face to its suppliers and service providers by setting a common expectation for performance and consistent direction. Consistency is important. We found high-performing companies possess a much greater level of process standardization than others, both inside the company as well as with its trading partners. Their use of technology also differentiates them. Almost 90% of the high-performing companies in our survey used Electronic Data Interchange [an electronic data exchange protocol] corporate-wide, and they also were much more likely to automate processes inside and outside of the enterprise.
