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Globalization Of Supply Chain Management Essay

1605 words - 7 pages

CONTENTS

1.0 Introduction
2.0 Definition of Globalization in Supply Chain Management
3.0 Advantages of Globalization in Supply Chain Management
3.1 Reduced Cycle Time
3.2 Cost Competitive
3.3 Increase Sales, Profits
3.4 New Markets
3.5 Satisfy Shareholders
3.6 Learn From Others
4.0 Disadvantages of Globalization in Supply Chain Management
4.1 Inefficient and Undersized Transportation and Distribution Systems
4.2 Market Instability
5.0 Conclusion
6.0 References

1.0 Introduction
Today’s business environment characterized is by faster technological development, shorter product life cycle, and more intense global competition. Having the right product ...view middle of the document...

In the instance of globalization in supply chain management], it is extended around the world. The globalization has occurred because of the advancement in Science & Technology. The innovation in products and designs has made the nations more competitive and they tend to become closer to each other. Globalization in supply chain management will allow companies to compete all over the world, in many different countries. By expanding current business operations internationally, companies can over new products and services that many have never seen before. New markets allow for more sales and more recognition. Expanding globally with an effective supply chain will give companies a comparative and competitive advantage over others. In order the globalization to be effective, is must be reliable and fast. The ultimate goal is to deliver a company products and services quickly and at the least cost possible. International manufacturing sources have in recent years been sought out by managers because of reduced cost, increased revenues, and improved reliability. Manufacturers typically set up foreign factories to benefit from tariff and trade concessions, low cost direct labor, capital subsidies, and reduced logistics costs in foreign markets (Ferdows, 1997).

3.0 Advantages
A successful globalized in supply chain management will help company accomplish many useful things. Once the globalization in supply chain management is in place, it will only continue to aid in its success and help company become more profitable. Globalization brings a number of potential benefits to international producers and national economies, including the following:-

3.1 Reduced Cycle Time
Globalization in supply chain management really does operate on a 24/7 basis, simply because of the time differences in different countries. So there is a sense that the chain never sleeps; it is constantly on the go and people are working to meet the supply chain requirements on different continents and at different times.

3.2 Cost Competitive
Globalization enables worldwide access to sources of cheap raw materials, and this enables companies to be cost competitive in their own markets and in overseas markets. Access to larger markets also means that companies may experience higher demand for their products, as well as benefit from economies of scale, which leads to a reduction in average production costs. If you have sufficient contacts and suppliers internationally, then you can really reduce the amount of stock that you have to retain, which means that you will save costs in terms of storage/thefts/transporting goods etc. These costs can add up, so this certainly helps sharpen the competitive edge that comes with a globalization in supply chain management.

3.3 Increase Sales, Profits
When you go global, then the likelihood of increasing sales and profits goes up as you open up your market to consumers all over the world. This allows...

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