Managing the Global Supply Chain in an Uncertain World

1840 Words8 Pages
We live in interesting times. Powerful forces are re-shaping the global business scene : financial and economic upheaval in the Far East, Latin America and Russia is creating a tidal-wave of change in the competitive environment. Organisations that once felt insulated from overseas low-priced competitors now find that they too must not only continue to constantly create new value for customers, but must do so at a lower price. To meet the challenge of simultaneously reducing cost and enhancing customer value, requires a radically different approach to the way the business responds to marketplace demand. One of the keys to success is the creation of an agile supply chain on a worldwide scale. The agile supply chain There is now…show more content…
On the other hand the attractions of local autonomy are clear when it comes to responsiveness to market changes and the ability to ‘stay close to the customer’. A second related issue is the extent to which synergy can be released by global co-ordination and whether this is compatible with local decision-making in sourcing, production and distribution. many global companies, for example, have sought to establish ‘centres of excellence’, particularly in R&D and in production, whereby resources and/or technologies are concentrated for greater focus. However, separating new product development and production from the market may not necessarily be sound practice, especially where those markets are not homogeneous. Running in parallel with these two issues is the question of how the search for economies of scale in production and the benefits of standardisation can be reconciled with the need to meet different local requirements and to do so with ever higher levels of responsiveness. Making the change How do global supply chains achieve agility? In a sense the very process of globalisation has retarded agility. For example, many companies in their search for lower production costs have moved much of their manufacturing and assembly offshore. The main driver for such moves often being low labour costs. However, in so doing they run the risk of extending their lead-times significantly thus generating the need for more
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