Therefore, the prime motto of supply chain management is ensuring that the entire international network of vendors, manufacturers, transportation companies, warehouses, retailers, and distributors operate smoothly and efficiently.
Global Supply Chain Management - An Overview
For the past several decades, one of the most prevailing trend is the process of globalization, where several businesses and manufacturers strive to take advantage of the low-cost manufacturing system and abundant raw materials available in developing countries across the world.
Global supply chains – to be very specific, are the network of logistic, manufacturing, communication firms, and transportation that shifts materials and products through the help of worldwide distribution channels and production. The global supply chain management process ensured the security and on-time delivery of anything and everything. It includes primary or raw materials required for production to the final finished products, in their journey from suppliers and manufacturers to the wholesalers, or perhaps the people who work as retailers, etc.
The supply chain managers ensure cost reduction, efficiency improvement, and all sorts of risks.
What is causing global supply chain issues?
There are primarily three major reasons that are causing global supply issues. First, the pandemic has left with a shortage of manpower, and eventually, that has reduced the production capability worldwide.
Distortions to demand due to the change in customer purchasing manner are another reason behind global supply chain issues, and the manufacturing and logistics systems more often run near or at their maximum capacity.
Manufacturing
Nowadays, ports, factories, and trucking capacity have become very expensive. Thus, they are designed in such a way that there is always a scope of high utilization. This means that each of them does not have a huge capacity.
Functioning close to capacity helps manufacturing and distribution cost-effective. But this also means that it does not require much to overwhelm them. This is because it is not taking place at one point but several points on a global supply chain and it becomes difficult to maintain the supply and demand balance
Irregular stress on demand
In the post-COVID era, businesses have seen increased demand, but it is not quite balanced. However, this has made companies scramble to keep up with the demand. This is creating a kind of irregular ripple effect in the supply chain.
Every business anticipates a probable future increase in demand based on the current rise in demand. In a supply chain where every business simultaneously supplies and orders products and services. A slight increase in need at the bottom of the chain creates a ripple effect, creating a considerable demand in the other end of the chain.
What's in store for the future?
One effect of this global supply chain disruption is that customers will find a surplus of earlier items hard to see during the COVID days. This disruption will stay for some time before it stabilizes again.
Businesses recovering from the sloth during the pandemic need to acknowledge this disruption in the supply chain. They need to revisit their disruption mitigation plans and strategies and build more resilience.
Conclusion
Despite all the hardships in supply chain management, opportunities will keep coming. A business more resilient to the distortions will eventually prosper from it. So, a company should not lose heart but keep up with the hard work.
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