The World Is Flat

by Thomas L. Friedman

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In The World Is Flat, what does "supply chaining" mean?

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According to Friedman, supply chaining is Flattener #7 at work in creating our flat world.  In my hard cover edition of the book, the discussion of supply chaining starts on p. 128.  If you have a different edition, you can find the page fairly easily as it is headed with “Flattener #7” in bold and the flatteners are discussed in order.  You can also look up “supply chain” in the index.

Basically, supply chaining is the creation of collaborative networks that make it much easier for companies to know what products are needed and to get them to consumers in a timely fashion.  In supply chaining, a business (Friedman uses WalMart as his main example) must work together with its suppliers and it must gather information from its customers.

Friedman describes a process where every customer purchase is recorded by the computer and then is passed on to the producer of the product that was just purchased.  The producer knows how many more products to make right away.  WalMart works closely with its suppliers to ensure that they are creating products that are of the right quality at the right price.  WalMart also exerts tremendous pressure on those suppliers to provide the lowest possible prices. 

This, Friedman says, helps to flatten the world because it forces companies to work together.  It also tries to create a situation where there are fewer trade barriers and fewer delays so that its products can be shipped from other countries as cheaply and quickly as possible.  This makes for a flatter world where more companies in more countries can compete with one another.

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