Global supply chain management

Global markets are expanding across borders and redefining the way demand and supply are managed. Global companies are driven by markets on all continents. To keep the cost of manufacturing down, they are forced to keep looking to establish production centers where the cost of raw materials and labor is cheap. Sourcing raw materials and suppliers to supply the right quality, quantity and price requires a dynamic procurement strategy that spans all countries.

With the above scenario, you will find companies sourcing materials globally from various suppliers to supply raw materials to their factories located on different continents. The finished products from these different factory locations then go through various distribution network chains involving warehouses, exports to different countries or local markets, distributors, retailers, and finally to the end customer.

In simple language, managing all activities together to manage demand and supply on a global scale is supply chain management. By definition, SCM is the management of a network of all business processes and activities involving the procurement of raw materials, the management of manufacturing, and the distribution of finished products. SCM is also called the management art of providing the right product, at the right time, in the right place, and at the right cost to the customer.

Three aspects of supply chain management:

Timeline: Interpret a strategic management of resources in the satisfaction of customer demands for a service or product. In other words: what you hope to achieve with your supply chain.

Assessment: Gain better visibility into the different parts of the supply chain and determine areas that need improvement, to enable better performance, higher efficiency and less waste.

Surveillance: Monitor discrepancies within the supply chain function to mitigate errors and ensure consumers receive the correct services or products on the correct schedule.

Why is the SCM strategy important for an organization?

SCM is the fundamental backbone for business organizations today. The effective coverage of the market, the availability of products in locations that are the key to revenue recognition depends on the effectiveness of the supply chain management implemented. Simply put, when a product is introduced to the market and advertised, the entire country market and all sales counters must have the product where the customer can buy and receive it. Any product failure that is not available at the right time can result in falling customer interest and demand, which can be disastrous. Transportation network design and management become important to support sales and marketing management.

IRON Global provides global supply chain management for logistics solutions with global consulting and services.