In commerce, global supply-chain management is defined as the distribution of goods and services throughout a trans-national companies' global network to maximize profit and minimize waste.[1] Essentially, global supply chain-management is the same as supply-chain management, but it focuses on companies and organizations that are trans-national.
Global supply-chain management has six main areas of concentration: logistics management, competitor orientation, customer orientation, supply-chain coordination, supply management, and operations management.[2] These six areas of concentration can be divided into four main areas: marketing, logistics, supply management, and operations management.[2] Successful management of a global supply chain also requires complying with various international regulations set by a variety of non-governmental organizations (e.g. The United Nations).
Global supply-chain management can be impacted by several factors who impose policies that regulate certain aspects of supply chains. Governmental and non-governmental organizations play a key role in the field as they create and enforce laws or regulations which companies must abide by.[3] These regulatory policies often regulate social issues that pertain to the implementation and operation of a global supply chain (e.g. labour, environmental, etc.). These regulatory policies force companies to obey the regulations set in place which often impact a company's profit.
Global logistics and supply chain management are critical components of international business operations, ensuring the seamless flow of goods, information, and services across borders. This field involves the strategic planning, coordination, and optimization of all activities related to sourcing, production, distribution, and logistics on a global scale. With the increasing complexity of global markets and the need for companies to operate efficiently in an interconnected world, understanding and mastering global logistics and supply chain management is essential.
One of the key aspects of global logistics is the efficient movement of goods across international borders. This includes managing transportation methods, customs regulations, and trade compliance to ensure timely and cost-effective delivery. International trade agreements and regulations, such as Incoterms and customs duties, play a crucial role in shaping global logistics strategies.
Supply chain management in a global context extends beyond logistics and encompasses the entire flow of products and information from suppliers to end customers. This involves coordinating activities with suppliers, manufacturers, distributors, and retailers in different countries. Effective supply chain management helps reduce lead times, minimize inventory costs, and enhance overall customer satisfaction.
In the era of globalization, technology plays a pivotal role in optimizing global logistics and supply chains. Businesses utilize advanced software, data analytics, and IoT (Internet of Things) solutions to track shipments, manage inventory, and forecast demand accurately.
Operating and managing a global supply chain comes with several risks. These risks can be divided into two main categories: supply-side risk and demand side risk.[4] Supply-side risk is a category that includes risks accompanied by the availability of raw materials which effects the ability of the company to satisfy customer demands.[4] Demand-side risk is a category that includes risks that pertain to the availability of the finished product.[4] Depending on the supply chain, a manager may choose to minimize or take on these risks.[4]
Successful global supply-chain management occurs after implementing the appropriate framework of concentration, complying with international regulations set by governments and non-governmental organizations, and recognizing and appropriately handling the risks involved while maximizing profit and minimizing waste.