All modern societies rely on supply chains in one form or another to send and receive goods, and global supply chain management (GSCM) has become increasingly important as businesses foster relationships around the world. For example, many corporations follow global supply chain management best practices when they seek new customers for their products in foreign markets. Other companies that have strategies to remain domestic leaders in their local markets still use GSCM practices to gain cost efficiencies on imported supplies. While the strategic missions of organizations differ, the companies share common challenges related to GSCM, and here are some examples of those issues that are expected to be high profile ones well into the future.
Complexity of Global Supply Chain Activities
The domestic supply chains of many companies hummed along like well oiled machines, but these same companies experienced break downs in operations when they sought to apply their fine tuned, domestic supply chain strategies to global supply chain activities. In the highly competitive global marketplace, this can have disastrous results. Commoditization of products across the globe means that companies are often not competing to bring the best products to their customers, but they are competing to bring products to customers in the most efficient manner. Global supply chains are usually longer than domestic ones, and supply chain management departments for companies need to cultivate deep relationships with suppliers that can help them to reliably meet the demand of their customers without experiencing the cost overruns of storing excess inventory.
Supply and Demand Volatility
According to GSCM practitioners, one of the most debilitating global supply chain issues that they face is volatility of supply and demand. Competition is fierce in the global marketplace, and customers often have numerous product choices that are available to them. This level of competition often leads to poor forecasting. Subsequently, companies are either unable to reliably supply their customers due to lack of materials, or they are left with excess inventory when customers get their supplies from competitors. A solution is to develop a comprehensive risk management strategy that helps companies to reduce the impact of these risks to customer satisfaction. For instance, a company that underestimates demand for one of its products that contains a long lead time resource can identify alternative materials for their product so that they can reliably meet customer demand. Companies that utilize global enterprise resource planning tools are at an advantage, because they can obtain and use information about actual inventory levels, customer orders and qualified suppliers in real time.
Global Supply Chain Flexibility
Many companies want to gain entrance into foreign markets to attract new customers. However, some of these organizations have to modify their product or its packaging to meet the requirements and preferences of these new customers, according to Industry Week. These modifications require associated supply change management adjustments that could mean the development of agreements with new suppliers or the ability to reroute products through different distribution channels.
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Demand for skilled global supply chain management professionals is steadily increasing. Aspiring global supply chain managers should earn an undergraduate degree in business with a concentration in supply management. Pursuing professional certifications that directly relate to GSCM, logistics or international business is also helpful. Advanced degrees in global supply chain management or international business that include experiential learning opportunities abroad are also good ways to initiate or maintain a global supply chain management career.