A Global Link

- Matthew Flynn

Whether a supply chain stretches across North America or the entire globe, there are sure to be cultural differences between manufacturing sites. The key to any successful supply chain is understanding cultural differences and managing relationships across different cultures. At the same time, it’s important for a business to be able to establish its own company culture across its supply chain. This is a delicate balancing act that can ultimately be the deciding factor in a company’s prosperity.

CULTURAL CHALLENGES IN THE SUPPLY CHAIN

There will certainly be some challenges throughout the supply chain with regards to exchange rates in payments, different units of measure, and language, but these are often easily addressed with translators. The real difficulties lie in attitudes towards business and interpersonal relationships.

People conducting business in North America place an emphasis on the bottom line and speed, whereas in Japan, establishing a personal connection is an important part of a business deal. Skipping an after-work invitation to get drinks might not be a big deal in the U.S., but in Japan it could ruin a deal. Similarly, businesses in North America view written and signed contracts as binding and unchangeable, but a business in China is less likely to view a contract with such importance and could change the terms suddenly and without warning as circumstances dictate.