Globalization – a challenge for supply chain management

November 2015

GlobalizationGlobalization has given rise to diverse opportunities both for reducing costs and expanding product diversity, but companies are also faced with increasing complexity. This becomes particularly apparent when it comes to suppliers and the global supply chain. In trying to reduce the costs of procurement companies need to observe worldwide markets and deal with all the aspects and possible problems involved like shipping, tariff etc.

Contracting a market research provider to do this job for you can save you not only a lot of time and money in the short term but also prevent you from adopting a wrong supply chain approach which might prove disastrous for your company in the future. The research team at Market Researchers, for example, is able to support you by using their expert knowledge about global markets and the processes involved in the global supply chain to define and elaborate a supply chain management approach customized for your company.

There are many factors to be considered in finding the best supply chain management approach for a given company. The right decision depends to a large extent on the kind of goods or services you offer. If you are a provider of basic supplies like food, for example, you need a functional supply chain, which is characterized by short-term demand, low product diversity and low profit margins on the one hand but a relatively stable development of demand on the other hand. As a vendor of innovative products like fashion items, consumer electronics or computers you would benefit from a market-oriented supply chain, which allows for high variability in demand and attendant high profit margins.

So how do you translate these insights into a viable global supply chain management approach? When dealing with global suppliers there are a number of potential difficulties which need to be taken into account before you can work out a suitable strategy. First of all, time is a central issue when calculating overall costs. Is the overseas production really cost-effective if the time to performance ratio is considered? To answer this question, additional factors must be allowed for like shipping times, customs clearance times and even weather conditions which might uphold shipping considerably.

Another important factor is supplier selection. Here again you could profit considerably from the expert research team at Market Researchers which can support you in identifying the best performing suppliers. Instead of simply deciding on the ones who offer the lowest prices you should factor in all the various criteria which make a good supplier, i. e. one which will be cost-effective for your company in the long run. Market Researchers can do this type of research for you and work out a comprehensive global supply chain strategy customized for your company.