In every industry, networks of suppliers, manufacturers, trade intermediaries and customers have spread around the globe as companies strive to lower their costs, increase their profits and improve productivity in a highly competitive global marketplace.
Companies must always be looking for ways to improve the functioning of their supply chains to ensure that their supply meets projected demands cost effectively. One that companies need to consider is the overall costs.
Because global supply chain management usually involves a plethora of countries, it also usually comes with a plethora of new difficulties that need to be dealt with appropriately.
Starting with their highest value and most strategically important contracts, businesses should evaluate their exposure in the event of the interruption of a key supply. However, these reasons are not quite as important as other countries advance technologically.
These can result in financial ruin for a company. With suppliers, distributors, customers and business partners located in many regional areas of the world, it can be difficult for companies to monitor the business practices and financial stability of all organizations in the supply chain.
Another issue that must be incorporated into a global supply chain management strategy is supplier selection. These clauses can be buried at the back with other standard looking terms and conditions but should not be overlooked. Quality standards, import and export restrictions, safety and packing regulations and labelling regulations vary around the globe.
For whatever reason, businesses may desire to keep some aspects of supply chain closer to home. This serves as a good reminder that managing political and counterparty risk is a key component of overall supply chain risk management. Additionally, companies need to factor in the exchange rate.
For successful supply chain management, the people involved must have the skills and knowledge to manage sourcing, manufacturing, storage and transportation of products. To be successful, it requires focused effort across the entire company and collaboration with all outside suppliers and service providers.
Processes The processes in supply chain management are the actions taken with the aim of satisfying customers. They include all functions involved in the supply chain: Those international businesses, especially energy companies, that relied on these Russian businesses as part of their supply chain found themselves in a very challenging situation.
Small- and medium-sized businesses benefit as well. Just-in-time JIT manufacturing reducing inventory levels, overall costs, product variability and production times, and also improving product quality Lean manufacturing producing goods using less manpower, raw materials, time and space Total quality management embedding awareness of quality in all operational strategies Global supply chain management has many benefits for a company.
About the author Author: Supply chain management aims to manage the flow of goods, information and finances among these business networks in the most efficient manner. Identifying and assuring the reliability of international business partners: Costs of raw products and components also tend to vary over time.
This means that supply chain management must have a multidimensional approach, involving people, processes and technology. For example, a supplier of raw materials would prefer a manufacturing company to purchase large amounts of raw products on a regular basis. Obtaining the correct insurance to protect foreign property and shipments is also essential.
What are the biggest challenges of managing global supply chains?
Other aims include increasing the speed by which your product reaches your customers, as well as flexibility in dealing with customer transactions. First, the company needs to make decisions about its overall outsourcing plan.MANAGING LEGAL RISK IN THE GLOBAL SUPPLY CHAIN – Tim Wright, Partner and Matt Oresman, Counsel at international law firm Pillsbury,discuss some of the legal.
Global supply chain management also faces the challenge of variations in customer demand that occur seasonally and over longer time periods. Managing the production and transportation of goods over large distances to meet the. Changes in world trade and supply chain models present significant indirect tax challenges.
Rapid globalization, the global financial crisis and rapid advances in technology are driving radical changes in international trade patterns. Few global companies today do business in the same way or in the.
Global supply chain management involves planning how the entire supply chain will function as an integrated whole, with the aim of generating an optimum level of customer service while being as cost efficient as possible. Become a PLUS+ subscriber and you'll get access to all Supply Chain Management Review premium content including: Full Web Access.
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Companion Digital Editions. Searchable replicas of. Presenting a global view of the scope and complexity of supply chain management, this book reflects the rapid change that has taken place within the supply chain and its environment. This third edition has been fully updated with recent changes in concepts, technology, and practice/5(2).Download