Global Supply Chain Issues
Global supply chains bring problems of their own. As companies begin to apply organisational efficiencies achieved in their home markets to overseas markets, they encounter difficulties. Here are a few issues to consider:
- Dealing with global trade agreements (World Trade Organisation)
- Computer hardware interfaces and data communications
- Transfer of capital along the supply chain
- Gathering accurate financial data
- Legal trade restrictions which vary from country to country
- Need for flexibility in supply and inventory levels to accommodate variability of distribution efficiency
- Need for specialist staff to move along the supply chain to ensure difficulties of handling duties; freight; customs; legal requirements are managed
- If companies operate with global markets and global supplies, there is a need to have a centralised procurement function that operates strategically (strategic procurement). Only centralised decision making can cope with complex data handling and the decisions necessary to optimise overall supply chain performance
- Markets for electronic products like PC's, mobile phones and games have shown not only significant reductions in product value (falls of 25 per cent in a single quarter have been common) but variability of demand
- Variability of demand has shown to be difficult for extended or multi-echelon supply chains to manage.
Supply chain versus supply chain
'The battle taking place in today's market is no longer company against company,' says Lou Unkeles, senior director of applications marketing at Oracle. 'What we're seeing now is supply chain competing against supply chain.'