Global Supply Chain Management Essay

991 Words4 Pages
Lean manufacturing and just-in-time processing are great business strategies that can severely stress a supply chain. The supply chain and supply chain management is a critical operations management element for any major company to succeed and remain competitive in the global market. The supply chain is one of many pieces critical to maximizing value to the end customer and requires close management to minimize external impacts. If a company is relying on another company to supply the raw materials needed for their production line, then impacts to this other company could impact their supply chain. Careful risk management is needed to optimize performance. As a company expands into global markets and global suppliers, this risk and…show more content…
In addition to increase risks, there is also a potential huge impact to supply chain disruption. In a study of more than 800 companies that experienced supply chain disruption between 1989 and 2000, there was a 33 to 40 percent lower stock return relative to industry peers (Bosman, 2006). Companies were also impacted by price volatility, lower sales growth and higher costs. Recent events highlight the unpredictability and severity of events that could cause supply chain disruption. The earthquake off the coast of Japan serves as a sobering reminder of this reality. As a country positioned as a global center of commerce and trade, Japan has provided a sweeping example of supply chain disruption. Although it is impossible to predict every natural disaster, act of terrorism or other supply chain contingency, a consideration for such disruptions must be a foundation for the strategic planning process from manufacturing all the way to the store shelf (Burnson, 2011). The disaster in Japan is already affecting companies around the world in the automotive industry, aerospace industry and the high tech industry (Chu, 2011). The complexity of global supply chains makes it difficult to fully understand all the impacts. It has been one month after the earthquake and ships are still at sea with products dispatched before the earthquake (Chu, 2011). A company will need to be well in tune with it’s supply chain due to
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