The supply chains have been changing due to the forces of globalization but in most cases the supply chains are said to be disintegrating. The disintegrations has been caused by the product designers, the manufacturers, the supplies and the marketers who had been previously located centrally in one facility have been spread over the continents throughout diverse cultures and languages. There has been great improvement in the field of supply chains especially in relation to globalization. The use of technology particularly has been the biggest contributing factor to the growth alongside the capability of how well the companies and other market players are suited to adapt to the change. This kind of changes have brought about new risks as well as new extensive challenges that include short lives and hesitant demand for the products and they have as such turned out to be even more difficult. In most cases, the technologies and the methods used for enhancing and encouraging supply chain competitiveness have become the topic of corporate and public discussions. These supply chain complexities have resulted in new risks of interruption and chain effectiveness that have led to generation of price discrimination and also have enhanced sourcing at lower costs which in return has led to the migration of jobs (Friedman 110).
Inventory costs are usually reduced by the application of the lean supply chain, even though; these models can be dangerous in times of natural disasters like rain or during epidemics that have a global effect. On the other hand, the rise in the scope and application of global supply chain has lead to the extensive technological use which has had several challenges as explained in detail throughout this article. Technology has enabled the use of complex sophisticated approaches in improving the pricing and efficiency of operations. This advancement has however; left many people jobless through job migration and hence; creating an imbalance in the social order.
Challenged by Globalization
The complexities associated with the supply chain of any multinational are mostly brought up by the rise in technological advancements. These technological uses have caused the development of more complex and integrated systems thus, strengthening the production and operational nature of firms involved. For instance, BMW deduced a strategic mathematical plan for its global production network so as to address its time phrased method of planning that had problems with acquisition of raw material and supply of the company’s products to the whole world. This is an example of the existing problem of complexities that have been related to globalization and the need to control them. The companies that have been given the authority to acquire, develop, maintain technological uses in the supply set up has also been experiencing problems (Council of Supply Chain Management Professionals). The firms that have and are still creating and proving the technological setups and infrastructure needed have not been performing this task optimally and this is one of the reasons why the globalization of the supply chain has received poor or no implementation strategies.
This supply chain can be defined as a combination of different kind of people working together in order to achieve their needs and also meet the targets of their required market. There has to be free and continous flow of product and supply in the whole process. The governing body responsible should make sure that the technological advancement for accomplish globalization through supply assists in the improvement of the stated person and not against them
The major challenges that the globalized firms and institutions have suffered in the recent past are all related to the complexities that come from the supply chain global process. It means that the biggest challenge that the globalized world of businesses has been suffering from is the complexities of the whole process. To begin with, the issue of globalization and outsourcing is an example of a challenge that has been experienced in the past, during the present and will continue in the future unless a new approach is deduced to counter attack its shortcomings. The outsourcing process is in reference to the sources of the products and their manufacturers sites which determine the smooth flow of the process and products. The supply chain structure has also been adversely affected by the new and ever changing computer and information technologies. These technologies determine how the process becomes successful.
The multinational firms have not appreciated the fact that there have been complexities in the global supply chain and the effect of undermining this concept over time has cost them a lot of resources trying to fix it and move with the market trends. Globalization expects the companies to be updated on the operational concepts of outsourcing production materials and requirements as well as the opportunities and the negative impacts they might encounter.
For instance, a long product lead time that is in sync with universal general supply chain has raised the risks being measure in the planning and production ability (Johnson 191).
The complexities of global supply have then been augmented by the introduction of more sophisticated technological advancements without first settling the earlier underlying problems. In this manner, the global market players have just overlooked over the underlying complexities related to the supply chain process and hence exposing the system to more risks. The growth in the globalization concept has therefore lead to the firms forgetting their previous problems and adopted the new system through vibrant asset operation, and changing their chronological approach of supply chain to a more flexible and global asset management approach that has led to the use of modernized projections of demand and supply in order to enhance flexibility and reduce costs. Despite the assurance of efficiency, it so painful to note that costs have actually increased instead of decreasing. This shows how the global community has not taken many interests in determining the root causes of such results.
The existing data of the complexities in the global supply chain can be termed as the issues that the producers have been undergoing due to the complicated nature of the chain of supply. The hidden costs that arise from the risks associated with the concept as well as the diverse backgrounds and culture to which the model has been applied to is an important factor to be considered. The most common supply chain problems facing producers in the modern times are a consequence of the globalization of supply networks and the related volatility, complexity and hazard/risk. Universal supply chains are usually faced with volatility in relation to raw materials needed, energy and commodities produced, compounded with a lack of reliable information of where the demand for the commodities is coming from (Enarsson 26). Before the expansion and use of technology as a medium for enhancing global supply chain, the firms then a different model that was not very automated and this created complication especially in cases where real time information about certain clients or location was needed. Other factors affecting global supply chains are added complexity and cost.
Supply chain risks are factors in the global supply chain that usually become exponentially larger on a worldwide scale. Supply chain risks include all factors from natural disasters to labor strikes, which are known to cause slower and longer lead times, hence increasing the necessity to have safety stock, and a reliance on a risk improvement plan with a quick supply chain to deal with any unplanned occurrences. This historical challenges and complexities have not been incorporated in the modern global supply chain which has further complicated the process.
International Supply Chain Security is very demanding, lengthy and complex. Universal supply chains are in particular at risks of disruptions that may be caused by several cases of key destructions such as power black outs and disasters as terrorist attacks and hurricanes destructions. These kinds of disturbances have considerable unfavorable effects on the smooth operation of the global supply chain in that they spoil business performance and profitability. Accordingly, universal supply chain managers are required to understand the nature of disturbances and experienced disasters and their apparent outcomes on the chains of supply, in addition to understanding the process of disaster preparedness by the business. Other factors that affect the global supply chains are the increased complexity and costs. In the modern global supply chain, the B2B and B2C customers anticipate more from their producers and suppliers at a quicker rate and for reduced cost. This has further made it more difficult for the companies to balance on their strategies of pricing as well as improving efficiency to provide customer satisfaction. However, the very unpredictable nature of demand has caused the producers, suppliers and manufacturers to respond to slighter, more recurrent orders, which has further lead to increased costs for safety stock, labor and transportation (Johnson 191-192; Friedman 87).
Coping with Globalization
In order to address the issue of the effect of globalization and technology in the supply chain, the current existing problems need to be solved or incorporated into the process. This is to make sure that the services to the customers become better and the supply chain gets maintained in an optimized manner. For instance, the B2B and B2C customers the manufacturers and producers have to be prepared to deal with the requests of customers and ensure that their expectations are met. This has the effect of increasing cost and making the process more complex but the companies should adopt strategies that cope with the globalization effect of the supply chain (Kinetz 32).
Technology has been changing very fast and it is the duty of a qualified supply chain executive to make sure that the systems of the company are well updated to avoid cases whereby they might get unsupported infrastructure or systems that cannot fit to function as per the company’s requirements. For instance, a merchant who is venturing into the express to consumer channel the current technological systems in distribution management, transportation management or order management need to be updated in order to scale up the online sales. The drive by customers for product differentiation has further made the global supply chain more complex sine manufacturers have been tasked with ensuring that the standards and specificities of a customer’s requests are met regardless of the steps or processes involved.
Companies should go on delivering efficient order fulfillment practices exclusive of increasing the cost. The larger diversity of manufacturing and distribution channels is an indication that organizations must repeatedly scrutinize their processes for possible cutbacks and upgrading. Improvements in the field of technology have made it achievable to triumph over some of the challenges that are faced by firms. Merchandise tracking devices and practices as well as automation has made it possible to minimize delivery times through identification of bottlenecks and disruptions. Nevertheless, the subject of how to best implement technological advancements remains a decision for many businesses (Simchi-Levi 21). . The supply chain structure has also been adversely affected by the new and ever changing computer and information technologies. These technologies determine how the process becomes successful you can read about this in the essay on development.
The global supply chain has also been threatened by the way in which the world is exposed to many internet controlled threats like security breaches, post sale product delivery and recovery and the issues that arise from the complexity of the whole process. In reference to the above challenges, the most prevalent one that has a connection with almost all of the other challenges is Complexities in the process and hence my article will be based on that as a challenge, trying to assess it and attempt to provide a viable and practical approach to provide a solution (Friedman 72-80).
The problem of supply chain complexities has continued to enlarge in different angles. Firms have continued to outsource more of their business aspects and need from internationally accredited and certified supplier groups (Myerson 14-20). The process of production has continually become more difficult than a simple line gathering. Producers in modern technological times need to focus and control several lines of production. These production units are individually and diversely located in parts that have a great number of diverse suppliers. In addition, manufacturers also should manage and control logistics, i.e. knowing where and when the products should be delivered next across the globe in-order to meet the demands of their target markets and customers. There is a high increase in numbers of geographic markets where a lot of supplier products are usually sold and these markets continue to grow in numbers. Complex supply chain partnerships should also be considered as means of solving and simplifying this mystery by offering producers a proficient, strategy that minimizes on cost for them to venture into untapped markets for them to design and distribute these products in to these new markets
From the start, running the supply chain requires maintaining an important person with proficiency and know how in the global locations. This therefore means that the company should find a local, reputable manufacturer who can constantly deliver for the arrangements. Firms with global presence should progressively view their supply chain as their strategic plan or asset, and hence employ it as a competitive mace. Implementation of new system is a lengthy and costly process and in order for the proposal cited above to be effective, it should be able to meet the demands and business needs at the moment and grow with the business over time (Friedman 27-45).
The ideas can only prove worth if a clear understanding of the business processes is developed by the owners and producers. This way, the manufacturer will be able to create an ideal solution based on his or her functional needs for the company at the moment and what is planned for future. On the issue of a cloud based solution, the company should invest in a warehouse management system in the cloud so as to cut on costs. An organization requires supply chain partners who are very efficient and can be able to respond to emergencies effectively (Soto 20).
In order to curb the issue of complexities in the supply chain system, the implementation of technology related clod computing proves as a viable option because of;
- Cost Containment: The Cloud computing practice will enable the company to scale without serious monetary commitments needed for infrastructural purchase and maintenance. The service has little to zero upfront capital expenses and the services and storage are accessible by command and are paid on the basis of pay-as-you-go service. This therefore puts the company at an advantage when it comes to cost savings as well as enabling convenience in its operations since the storage services are outsourced.
- Immediacy: Cloud computing service will provide the company with the ability to execute and utilize a specific service to the maximum within a specific time frame like in a single day or weeks at best hence ensuring that there is speed and convenience during the period of realizing the cost benefits received. When compared to the traditional and outdated methods of storage, the software that were being used would take as much as three months for them to be installed and then another six months to be implemented. This was the reason the complexities arose in the past due to lack of proper mechanisms to ensure a just in time kind of operation.
- Availability: Cloud service providers usually have the infrastructure and bandwidth to hold business and corporate needs and requirements of companies for fast speed accessibility, storage as well as applications (Kinetz 13). The cloud service provider usually has outmoded paths in place, the chance for load balancing is created in order to make sure that the systems are not overloaded at any one time and service delays are not experienced hence eliminating complexities through cloud storage of all the company’s data and files.
- Efficiency: the move by business houses to reallocate information, management and operational activities of the company to the Cloud service of computing presents a better and unique chance to pay attention to efforts on innovation, follow a line of investigation and development of the company. This therefore leads to the growth of the business and the products or services provided, leading to improved financial reports due to increased productivity. This proposal also takes into consideration the cases of unforeseen circumstances like disasters or natural calamities by providing resiliency in such times (Myerson 16-18)
For successful supply chain to be achieved, an important focus for its management for the project to be closely monitored is change management. It does not matter the job function, employees are accustomed to working systematically and in certain set specific ways. The most effective supply chain management solutions have mechanized a way of doing things which can sometimes be problematic. Therefore, it is vital for producers to embrace upheld change management policies, as well as advocate for executive-level sponsorship, throughout the project’s duration. For a supply chain to be successful the implementations should not just be on technological software but should involve the people involved and also the individuals that make the process a reality. Change management is a key factor for globalization to be able to take effect across the globe. Educating their individuals by offering satisfactory training and development which involves not only receiving buy not only from management, but also important members of the labour group are very crucial.
For an organization to achieve these they should be able to answer to unexpected occurrences through thorough analysis of supply chain trade- offs. They should also increase rapidity in detecting and responding to their analytical plans which in turn can help an organization deal with unexpected supply chain problems. If a problem is not detected early enough it could force a firm leave a certain market which will result from lack of response to the changes in the supply chain. This could also generate a supply chain community which will adapt to the changes. In risk management supply chain is a complex, demanding and challenging tool to execute. This is because all the factors and components associated with supply chain share the same philosophy, labour in the direction of the same goals and objectives and eventually benefit from their financial gains. Sourcing is the process of identifying, selecting and developing suppliers thus in doing so single sourcing from one supplier maybe very risky and should follow the sourcing cycle to the latter. Supply chain management ensures high qualities which are given at low costs.
While implementing supply chain management policies to ensure that all the target market are reached just in time (JIT) mode of action forms the principles of operating with low inventories and this assists in the ability for the firm to identify and work on a problem before they blow and build-up. The governments should also assist in developing and making sure that the desire and need to connect the world through globalization has been achieved and effective supply chain management procedures followed. For example Wal-Mart needs a lot of government support in terms of providing the appropriate environment in order to be able to serve the global market effectively. On the other hand, it is important that the global businesses embraced the supply chain management policies because with the vast growth in globalization, the world is officially a global village.