Supply Chain Management and Trading System Essay

Supply Chain Management and Trading System Essay

Instructions/Descriptions

Supply Chain Management and Trading System Essay

Introduction

Technology has increased rapidly in the past two decades. This rapid technological advancement has provided organizations an opportunity to participate in an international marketplace. The international marketplace is portrayed by intense pressure and competition to drive cost down.

The pure transactional way of sourcing materials is not realistic in the current modern era. Organizations should look for ways to restructure the ordering process and focus on their main competencies to sustain a competitive edge in the business market.

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This is only possible through the development of a strategic sourcing that would help the organizations in reducing their material and procurement costs. The shifts in economic trends and global expansion of businesses have augmented the intricacy of several supply chains, which have resulted in increased demand for successful supply chain management in current marketplace.

Markets have become more globalized and organizations are affected by international trade either directly through their customers and supply chain or indirectly through the competitive strategies used by their industry rivals. Many organizations have attempted to develop partnerships or alliances with other supply chain members located in foreign countries, so that they could bypass the global business barriers created through the government policies, and gain access to foreign markets by managing the market risks.

Discussion & Analysis The rising level of foreign direct investment in recent years is the proof of this attempt by the organizations. The trend toward economic globalization has made alliances important for corporate strategy, since globalization drove the convergence of customer preferences and needs.

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The high cost of speedy technological changes made it impossible for a firm to offer customers the best products at the lowest price (Baldwin, 2013). Additionally, sharing huge gaining presence and fixed costs in foreign markets were also claimed as reasons for global alliances.

These alliances have helped firms in elimination of duplicated research efforts and control uncertainty in competitive environment. In addition, alliances could also stimulate more research and development investment on both sides.

The benefits of global alliance ranged from lowering risk & cost of high tech product development and gaining economies of scale, to reduction in transit time of products to market. Increased innovation, flexibility, better quality, strategic advantage, and economic necessity were also given as the benefits of global alliances.

In the current, competitive business setting and global economy, organizations are highly recommended to actively monitor and manage their supply chain, because the suppliers can cause serious disruptions their operations otherwise (Seuring, 2013).

During 90s, the trends such as just-in-time systems, supply base reduction, globalization and lean supply chain networks have inspired the supply chain leaders to put more emphasis on cost reduction and efficiency in their supply chains’ design, along with removal of non-value- added activities and slack resources in order to minimize the costs of production.

In the meantime, the emergent role of global supply chains helped in bringing unification among the manufacturers and suppliers worldwide, which led to higher dependency among the organizations dealing in the supply chain and a higher level of supply chain complexity. Global production has undergone a radical evolution during the past two decades (Baldwin, 2013).

Improvements in information and communications technology (ICT) along with World Trade Organization’s push for low or no trade barriers have helped in emergence of fragmented value chains in world trade, where production is no longer managed within one country but is broken up and dispersed worldwide (Elms & Low, 2013).

Furthermore, the dispersion and reorganization of production processes imply that each production task is now situated in the location with the utmost comparative advantage. Through production processes sub-divided into several stages all over the world, several countries have became involved in production networks that uses several intermediate inputs to create a final good to consumers.

The supply chain experts have started to focus on developing and improving supply chain strategy, planning, and operations to enhance flexibility and service quality. Supply chain managers are focusing on reducing the cost of the supply chain process to become more competitive and to deliver the best value to the end users.

Nonetheless, managing supply chains in a turbulent and competitive market is challenging, due to unexpected circumstances. The frequent occurrences of labor disputes, political changes within the areas of operation and of the supply chain and natural disasters are the most critical risks that supply chain managers must minimize and control.

Supply chain managers should help the organizations in improving their efficiency of informational, physical and financial flows, when there is a possibility for joint problem-solving across supply chain partners to execute best practices (Seuring, 2013).

Conclusion

With augmented proliferation of supply chain and the liberalization of cross border transactions since the 90s, many countries have quickly embedded into the global production networks. Highly institutionalized regulatory frameworks have helped the countries in improving their sense of confidence in their economy, which have also led them to attract much more investors then they were able to attract in previously.

Businesses that are operating under accountable and transparent countries might have greater chances of business sentiment and higher trust in the system as compare to the countries that have corrupt regimes. Supply chain management becomes increasingly complex when organizational operations in the delivery of products are interrupted. Supply chain interruption can have poor impact on sales and it can even push up the cost of transportation. Managers, who are able to reduce and manage supply chain risks are able to enhance the company’s competitive position more and can produce higher returns and business growth.

To reduce uncertainties from the supply chain, managers need to consider risk-adjusted methods keeping in view the exact design of supply chain, as it will improve fundamental areas in the downstream and upstream of the chain in both domestic and global trade.

EXERCISES

Write your own essay regarding the Supply Chain Management and trading system.

Indicate pros and cons of worldwide trading, globalization of Supply Chain Management and possible innovations in the sphere of management. Use the example above as an exhibit.

References

Baldwin, R. (2013). Trade and industrialization after globalization’s second unbundling: how building and joining a supply chain are different and why it matters. In Globalization in an age of crisis: Multilateral economic cooperation in the twenty-first century (pp. 165- 212).

Supply Chain Management and Trading System Essay

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