Essay Sample on Globalization Issues & Benefits in Supply Chain Management

Introduction

Globalization in supply chain management is achieved through companies performing trade across the boarders to acquire goods and services that, for numerous reasons, are not readily locally available (Ernst & Haar, 2019). However, globalization of the supply chain is faced with multiple issues such as the emergence of new technology like blockchain, political instability, climatic effects, natural calamities, and adverse weather on the supply chain. This paper expounds on the issues, advantages, and disadvantages of globalization in the supply chain.

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The adoption and implementation of specific modern technology like blockchain technology greatly influence globalization in the supply chain. The blockchain technology has gained a lot of momentum; it is substantially boosted by fast-developing business concepts like the cryptocurrencies, ethereum, and bitcoin (Hu & Haddud, 2020). Consequently, technology has a considerable impact on how the global supply chain is managed. Moreover, integration of the blockchain technology into the worldwide supply chain results in several challenges vendor risks, untested code, under regulation and lack of standards, and endpoint vulnerability.

Furthermore, the political atmosphere of a nation is a very crucial issue in the globalization of the supply chain. The global supply chain depends on political stability to thrive; an ideal political environment makes it easy for a global supply chain to attain high efficiency hence effectiveness (Zeng & Yen, 2017). However, political instability considerably halts the activities of the global supply chain since crucial aspects of the global supply chain like transport and labor are much tampered with. The global supply chain categorizes the political risks into three main groups, which include cataclysmic events, international policy shifts, regulatory/domestic risks.

Nonetheless, the adverse weather conditions and occurrences of natural disasters can significantly influence the operations of the global supply chain. For instance, transportation of goods from the zone of production through to the numerous value addition phases and then throughout the vast network to the several retailers and finally to the product consumers largely depends on the weather conditions (Milovanovic et al., 2017). Adverse weather conditions and natural calamities often result in a high cost of transportation. As a result, consumers witness a substantial shift in product dynamics and costs.

The outsourcing plan is a very critical factor to consider in supply chain management. This is because numerous businesses prefer to maintain some aspects of the supply chain in their home country. However, other countries advanced technology overrides the business reasons to maintain the elements of the supply chain at home (Zeng & Yen, 2017). For example, several parts of India have established themselves as technology giants, and various companies are outsourcing their services. Moreover, the services are offered to companies with highly qualified laborers and at a relatively low price.

Advantages of Globalized Supply Chain

The global supply chain encourages the production of high standard goods. Since the global supply chain operates among several countries, the production companies involved are forced to produce high stand goods to meet the international standards (Gurtu et al., 2017). Moreover, the companies involved are aware that inferior products will significantly affect the number of there customers.

Moreover, the globalization of the supply chain enhances the chances of companies getting international contracts. The global supply chain has made it possible for companies to practice outsourcing, which mostly involves seeking services from firms in other countries (Hu & Haddud, 2020). The award of an international contract is often beneficial to the companies seeking the services as the labor costs are substantially low.

The global chain also creates new markets and opportunities. Companies that outsource their services from other countries establish new markets and exploit the business opportunities available in that country (Milovanovic et al., 2017). For instance, Apple has gained sharp popularity in the Chinese market through outsourcing services from a Chinese firm.

Nonetheless, the global supply chain has led to prices being competitive. Due to the competitive nature of the global supply chain, suppliers are obliged to be organized and offer their services at a relatively lower price (van den Brink et al., 2017). The products are also of high quality and are readily available within the market.

Disadvantages of the Global Supply Chain

The global supply chain is prone to drawbacks from the language barrier. Different countries around the world observe distinct cultures and communicate in various languages. Thus, it is impossible for the companies involved to comprehensively understand the languages and cultures and trade in harmony (Zeng & Yen, 2017). Furthermore, the disparity in languages and cultures can easily lead to sharp misunderstandings among the companies, thus affecting their operations.

Moreover, the global supply chain often results in high costs of operation. For instance, when a company outsources services in a different country, the company has to carter for numerous charges apart from the labor (Hu & Haddud, 2020). The cost includes warehousing costs, transportation costs, and import duty costs.

The global supply chain has encouraged bureaucracy. Several countries have employed bureaucratic processes to clear freights; the process significant involves issuing out bribes to the officials in charge, or the freight clearance is delayed (Milovanovic et al., 2017). Consequently, the delaying of the freight can result in numerous unexpected losses to the company.

Conclusion

In conclusion, the globalization of supply chain management has proven to be beneficial to several companies around the world. The trade networks formed by different companies in different countries around the globe have effectively enabled the companies involved to acquire goods and services that they can no produce. However, the global supply chain management has several drawbacks and issues regarding its operations.

References

Ernst, R., & Haar, J. (2019). Supply Chains. In Globalization, Competitiveness, and Governability (pp. 125-144). Palgrave Macmillan, Cham. https://doi.org/10.1007/978-3-030-17516-0_6

Gurtu, A., Searcy, C., & Jaber, M. Y. (2017). Sustainable supply chains. In Green Supply Chain Management for Sustainable Business Practice (pp. 1-26). IGI Global. Retrieved from https://www.igi-global.com

Hu, J., & Haddud, A. (2020). Exploring the Impact of Globalization and Technology on Supply Chain Management: A Case of International E-Commerce Business. In Supply Chain and Logistics Management: Concepts, Methodologies, Tools, and Applications (pp. 1353-1376). IGI Global. Retrieved from https://www.igi-global.com

Milovanovic, G., Milovanovic, S., & Radisavljevic, G. (2017). Globalization-The Key Challenge of Modern Supply Chains. Ekonomika, Journal for Economic Theory and Practice and Social Issues, 63(1350-2019-2767), 31-40. Retrieved from https://www.ceeol.comvan

den Brink, S., Kleijn, R., Tukker, A., & Huisman, J. (2019). Approaches to responsible sourcing in mineral supply chains. Resources, Conservation and Recycling, 145, 389-398. https://doi.org/10.1016/j.resconrec.2019.02.040

Zeng, B., & Yen, B. P. C. (2017). Rethinking the role of partnerships in global supply chains: A risk-based perspective. International Journal of Production Economics, 185, 52-62. https://doi.org/10.1016/j.ijpe.2016.12.004