Global Supply Chain, Its Strengths And Weaknesses (Coursework Sample)

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Global Supply Chain
Global supply chain arises when a group of interconnected companies joins up with the sole intention of streamline trade between the producer and the designated end consumer who demands the goods. Three elements are evident in a supply chain based on the definition. One is that a supply chain is formed and can only be established when more than one companies come together. The second is the fact that these companies which have come together do not belong to the same person or organization. Therefore each one of them is legally independent of the other. The third is the fact that all these companies come together due to one sole reason which is to add value to the flow of goods and services through the supply chain.
The beginning of global supply chain can be traced back to the advent of globalization, though the exact historical time cannot be pinpointed since the time varies from company to company. As the various companies engaged in the overseas exploration for cheap materials and labor, the manager was tasked with the duty to facilitate this operation. The growth of global supply chain has been gradual and due to technological advancement; the growth has been accelerated. Therefore any company that depends on and uses goods and service and also dependent on overseas customers does engage in the global chain operations.
Why We Need Global Supply Chain
The global supply chain has a great influence over the market forces where it improves the level of competition in the local market to the advantage of both the supplier and the consumer. The foreign demand is also influenced to grow whereas the suppliers have an opportunity to use the global presence as a defensive tool. The global supply chain also impacts on technological forces where it facilitates diffusion of knowledge from one country to another and from one continent to another. The global factors are also affected where there is the flow of skilled and unskilled labor and the integration of the infrastructure by the suppliers where the design processes become more appealing to the suppliers. The companies enjoy the favorable trade protection mechanisms such as favorable tariffs, quotas, and government procurement policies which favor local traders.
Components of Global Supply Chain Systems
One of the components of the global supply chain is that its facilities international distribution systems where it the domestic manufacturers to manufacture locally and be able to distribute their end products to the overseas marked with a lot of versatility. The international suppliers can access the foreign raw material and components and do the final assembly and manufacture domestically with a lot of efficiencies. The offshore manufacturing is also made possible where a product is sourced and manufactured from one distant point, and later it is shipped to the domestic warehouse for where sale and distribution are carried out. The other components are that it function in such a way that international boundaries do not exist giving the merchants to take advantage of this scenario to their benefit.
Advantaged of Global Supply Chains
One of the major advantages is that it enables them to attain the main objective which is to increase the number of sales while at the same time increase the profits. By making it possible for businesses to enter new markets, it enables them to actualize their potential to expand. It also enables the companies to diversify their business and trading activities and help them to lower the cost associated with the supply chain. The recycle time is reduced considerably and also keeps the firms at a competitive advantage over the others. There is also an excellent opportunity to explore and make use of the untapped markets and enhance the speed and efficiency of operations.
Disadvantages of Global Supply Chain
The major disadvantage of a global supply chain is the fact that its implementation in terms of time, money and labor is high. Despite the fact that the cost of doing business is lowered by the decisions to outsource the production infrastructure or call center, there is a high risk of consumer backlash. There is also the element of having insufficient and unreliable systems that are used for transportation and distribution. There is also the possibility of causing instability in the market. There is more than one can imagine concerning the integration of the supply chain and the process of choosing the relevant suppliers. There is also the other hard fact that does not auger well with the companies in that the advantages are not realized in the short term but long term. There is a likelihood that the rewards of their efforts may come after some years down the line. The companies will incur more as they have to hire new members of staff tasked with the launch of their global companies. The companies are also prompted to modify their products for them to match the requirements of the global market. There is also extra expenditure on tra...