Global Logistics and Risk Management Essay Example

supply chain cost trade-offs. Sensing and responding quickly can also help the firm overcome unexpected supply chain problems . Adaptability is another key factor in managing this type of risks .

Adaptive supply chain would require supply chain partners that morph and reorganize better react to sudden crisis situations. Global risks in supply chain could be managed through speculative strategies . This works when a company works on a speculative scenario and if that scenario is realized . Otherwise the results could be dismal.

Another strategy which is known as hedge strategy. In this strategy a company designs the supply chain in such a way that any losses in part of the supply chain will be offset by gains in another part .Flexible strategies enable a company to take advantage of different scenarios . Flexible factories and suppliers which enables production shifting is very important .

Market information sharing is another important aspect of flexible strategy. Global coordination and political leverage are other important factors which would contribute to the success of flexible strategies. A global strategy implementation would require five basic functional developments . Product development is the designing of products which can be modified for various markets .An international design team could be used for this . There should be a separate management team handling the purchase of important materials from vendors across the world .

This way the quality and delivery options from various suppliers can be checked and ensured. Excess capacity and plants in several regions are essential to take full advantage of global supply chain by shifting production based on conditions . Centralized management and effective communication systems are essential for this system .

This accounts to production development. Demand management should be based on regional basis in this system . A centralized system must be in place so that regional customers can receive deliveries from the global supply chain.

There are several issues with international supply chain management . The main issue is with the international and regional products . Some products can be universally designed but some other products has to be designed based on the regional preferences . Another issue is the differences in terms of centralized control and local autonomy .Managers sometimes tend t overlook the learning from the global supply chain to use the local learning of supply chain . Other issues could be related to the socio economic reasons like inflation could be a major risk , if not managed well.

Foreign government norms could be another potential threat to global supply chain. The main regional difference I global supply chain would be the cultural differences . Differences is languages ,beliefs and customs followed locally . Another aspect is the availability of infrastructure indifferent countries .The highway systems ,ports ,communication ,information and advanced manufacturing and ware housing technologies allow the development of advanced supply chain .

Logistics infrastructure in many emerging markets are not fully in place due to the lack of adequate investments in this area . The logistics infrastructure and the other infrastructure in the third world nations is not always adequate enough to support the advanced global supply chain systems . Another area of difference is the difference in the operating levels and the performance evaluation and expectation .The operating standards of the developed world typically vary greatly .

Some firms might have met

high expectations and place great value on contracts and agreements Research and negotiations are essential to successful deal making in the emerging nations . And government also plays a large role in the business in these countries . In third world nations the traditional performance measures have no meaning . shortages are quite frequent and the service levels practiced in the west are not met in these places thus a firm has very little control over the timing and the availability of the inventoryAnother major concern is the availability of the information systems .

Quick and prompt information sharing is very important for the success global supply chain . Support systems and the communication networks available in the emerging markets efficient information flow. Availability of technically and managerially competent workers is another problem faced by most of the global supply chain systems . The regional ,political and religious influences in man power selection mostly denies the opportunity to hire the best talent available for the success of global supply chain.In spite of all the regional, political and other differences, global supply chain is here to stay and grow.

As the markets are getting saturated companies across the world has to grow beyond their domestic markets . So the relevance and importance of global supply chain is even more pronounced in today’s world IBS BANGALORE