The impact of a global Supply Chain
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The Global Supply Chain (SC) arises from the need to incorporate worldwide suppliers, production and distribution processes, and then exporting final products to many destinations worldwide using different means of transport. This chain consists of the manufacturing, planning, organisation and management of those activities related to the raw material sources and transformation of goods, from the conception of a product to reach the end-user.
The SC is a series of activities applied to carry out efficiently specific marketing processes of products or goods. Its action ranges from obtaining raw materials produced in different countries, elaborating products, transportation and distribution to customers.
The management of the Global SC must ensure the delivery of “the right product quantity at the right time, at the right place;” furthermore, customers must also receive quality service. Therefore, all those activities a company carries out to sell its products.
SC must recognise its essential functions and the objectives it must develop necessary for its success.
Considering that the Supply Chain is a method that allows the integration of activities to optimise the management within organisations, it is essential to highlight that the main objective is to ensure that all the customers’ needs are covered and make them available in the markets.
The Supply Chain considers quantity, quality, time, customer service, flexibility, place, and others to respond adequately and reduce operating costs. The goal you want to achieve is to obtain advantages that allow you to develop innovative business models with efficient production lines. At the same time, you can minimise costs whilst maintaining a high level of efficiency and achieving the company already established sales goals as their primary objectives.
In the same way, globalisation allows markets to control all these processes, leaving aside each company operation and subjecting them to more collaborative procedures.
It would be helpful to integrate such processes into your company culture to gain more competitive benefits in the international market whilst obtaining better profits than your competitors. Consider minimising time and focus on keeping your customers’ satisfaction and loyalty for the long term.
However, bear in mind that any Supply Chain operations become particularly vulnerable to issues caused by risky events challenging to predict on time. Some of the most frequent or typical disrupting events within a Supply Chain are:
· Due to natural events (e.g. floods, landslides, tremors, droughts, and more.)
· Sudden and pronounced changes in demand.
· A possible partner’s failure in the extended chain could be either a supplier or distributor.
· Sudden fluctuations in the price.
· Consider the availability of critical inputs.
· The interruptions linked to social or political events (civil wars, expropriations, legal changes, and more.)
Further comments: many multinational companies accept that their operations are continuously affected by some of the factors mentioned above. Although many of them have mitigation and continuity plans. Recent studies estimated that one in 5 companies suffered significant losses due to inadequate responses to disruption events.
Do you think working in collaboration with other global companies will mitigate losses?