Globalized Supply Chains
Innovation, communication technology, and policy changes are some of the key driving factors behind today’s globalized business landscape. Free trade has fostered interdependence and interconnectedness of nations. While the business of trade becomes progressively more globalized, there is no facet of a business more affected by the shifting ecosystem than the supply chain.
The interconnectedness of the world has resulted in companies reaching ever expanding audiences with broad ranging demographics. While this is good for business, the supply chain takes a hit. The supply chain must be agile in order to keep up with the volume of orders. Manufacturing, distribution, and inventory, among other moving parts in the logistics equation, are significantly impacted by the growth of global consumerism.
Globalization has enabled businesses to develop their influence, increase their reach, and grow their profit margins; however, the digital world has introduced complete transparency within the supply chain. While there is value having transparency in the supply chain for the organization and stakeholders, there is also additional risk. Many companies are struggling to manage new complexities while mitigating new risks.
For example, a manufacturer based in the U.S. outsources their manufacturing and assembly of parts in developing countries before having them shipped to the U.S. or other markets where they will be sold. The manufacturer’s supply chain is vulnerable to external factors. If an economic downturn in another country or political instability arise, the supply chain may experience detrimental impacts that can create a domino effect, harming the company, its stakeholders, trading partners, and so on.
The maintenance of the supply chain, from a holistic perspective, demands increased efficiency of operations. It’s becoming increasingly apparent to business leaders and economists that there is growing demand for innovation, optimization and technological advancement to predict and overcome the challenges that accompany globalized supply chains.