What Is Global Supply Chain Management – Everything You Should Know
What is global supply chain management? Well, global supply chain management means all processes that a product undergoes from processing or its manufacturing, its distribution to various levels until the last stage when it is consumed or used.
The global supply chain management focuses on ensuring that products needed by customers worldwide are enough, of good quality, and ensure they reach their customers in time and in the best state. Currently, global supply chain management has witnessed great success due to growth in technology. For instance, technology has revolutionized trade, making global supply chain management goals achievable with no much strain. Using technology, delivering goods and services has been made easier. Marketing through online advertisement has also led to this growth.
Before technological advancements, traditional global supply chain management had four major units: manufacturer, supplier, retail, and consumer. Today, technology has been incorporated as one of the major units. The global supply chain seeks to maximize profit by sourcing goods from countries that offer low production rates. This brings out the difference between the local supply chain and the global supply chain. Local supply concentrates on buying goods locally, which may be expensive due to the high cost of production within a country.
Units global supply chain management
This is a very important unit in global supply chain management. Industries and other manufacturers use this unit for advertising various products to the customer. Different platforms can be used to advertise goods, including television, radio, and social media. Technology is also used in manufacturing goods. Machines used in the industries use a lot of technology, leading to the production of more quality goods.
Global supply chain management is a very big process that requires people with different skills. People are involved in all processes, beginning with the manufacturing of goods in the industry. People also act as managers in transportation, storage, advertisement, and the sourcing of goods and help businesses realize their goals.
There are different processes involved in global supply chain management, including manufacturing, sourcing, distribution, transportation, customer services, marketing, and sales.
Advantages of global supply chain management
Low cost of production.
Global supply chain management seeks to get goods from any country that offers them at a low cost. Some countries offer goods and materials at high prices because their cost of production is high, while others offer them at low prices. Once these goods are purchased at low cost, they sell at higher prices to earn high profits.
The involvement of more than one country ensures a market for goods being supplied. Global supply chain management aims at seeking customers from any part of the world.
Brings healthy competition
As management seeks to get the best goods from any country, suppliers also strive to provide the best. This brings about healthy competition between different suppliers.
There exists no limitation of accessing goods compared to local chain management. There exists a wider market for purchasing goods, increasing the chances of getting the best. Suppliers from different countries strive to supply the best quality goods to attract customers.
Disadvantages of global chain management.
Global supply chain management involves trade across the globe. Some countries lack a common language of communication hindering trading activities. Sometimes, an interpreter must intervene between such countries as they lack common terminologies to use in trading.
Difficult to manage
Some countries are geographically far from each other. Managing communication and ensuring goods are delivered on time might be difficult. Transportation of goods across long distances may also interfere with the quality of goods due to breakages.
Lack of common rates of exchange
Some countries face the challenge of inflation while others maintain a high value for their money. Transacting business between such countries is difficult as they lack a common rate in their exchange.
Late delivery of goods.
Transporting goods to some countries might take a long depending on the mode of transportation. Goods that are transported by ship might take too much time to reach the destination. This might make the trade to be slow and inconvenient.
Reasons why global supply chain management is successful
Global chain management involves experts who manage all the processes within the chain. These experts advise on how to run different areas for the success of the global business.
Availability of capital.
Global supply chain management ensures that there is enough capital to run their activities. The chain ensures that strong financial suppliers provide money in terms of loans in case needed to ensure the buying of goods and transportation work run effectively.
The global chain ensures that there is serious supervision of all the activities carried out. This serious supervision ensures no waste, mostly through theft by workers.
Due to the large market, there are high chances of getting high-quality goods. Global supply chain management also ensures the quality of goods to minimize unnecessary competition.
The Bottom Line
Different types of businesses do so well in global supply chain management. Most of the manufacturing companies, such as motor vehicle industries, do well in this chain. The main aim is to target a wider market for their goods. Businesses in global supply chain management are managed by a global supply manager who oversees all the activities carried out through the chain and ensure that goods delivered to customers are of good quality. The manager also ensures timely delivery of goods by planning on how the goods will be transported and by what means. Global supply chain management provides healthy competition in the world market. It also ensures that customers all over the world access the goods that they need.