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What is a Global Supply Chain?

Posted by [email protected] on Feb. 15, 2021  /  Subscribe 0

You hear this phrase a lot these days if you're in an industrial or production environment. "Global Supply Chain" is a broad phrase in its definition but very pointed in its daily application. It also begs the question, what is the meaning of a global supply chain? Experienced professionals and students alike are beginning to understand how global supply chain management affects many situations and not necessarily always in a positive manner. With the increased focus on international trade and its complex effects on domestic production capabilities, everyone in supply chain management is adapting to the new paradigm in global supply chain functionality and performance. 

How do Global Supply Chains Work?

By definition, a chain is made up of many links, each dependent on the one behind it and the one ahead of it to hold the entire chain together. The chain includes all the goods and services required to bring raw material together to manufacture an item or provide a service. Each “link” in the supply chain represents a step in the process of producing a finished product—action items that involve communication, finance, inventory control, transportation, and a host of other logistics management activities. Coordination of this maze of activity is done via the internet utilizing specialized computer applications. And this orchestra of suppliers must be conducted by knowledgeable managers who can make headway through the maze of suppliers, transportation methods, documentary requirements, and a dozen other considerations.

Why is a Global Supply Chain Important?

It doesn't matter if you operate a small gardening shop in a strip mall or a multinational manufacturing and supply conglomerate conducting business across different continents; everyone everywhere is affected by global supply chains. The small gardening shop may purchase all its inventory from local vendors, but the chances are those vendors get their products from someone based in an entirely different location, which is offshore in many instances. Global markets offer reduced costs, making production more cost-effective. Price competition, delivery advantages, and other important selling considerations are included in the decision to work with global supply chains to source products.

What is a Supply Chain?

Using the example of our small corner gardening shop, let's examine how a supply chain supports the business. The owner purchases fertilizer from a local distributor, who purchased the bags holding the fertilizer from a vendor in Mexico. The vendor in Mexico acquired his raw plastic pellets from a company in Indonesia that makes them from recycled plastic taken from the ocean. That's a supply chain of global proportions. Being a part of the supply chain is just as important to the garden shop owner as it is to the company delivering the fertilizer because the supply base for all the materials that went into the bag of fertilizer was global even though the ultimate consumer is just down the street. From raw materials to final consumers, the entire process is controlled by a supply chain.

Global Supply Chains in the Current Global Health Crisis

It doesn't matter where your home country is located; the pandemic has affected every single supply chain in one way or another. The last twelve months have proven to be the greatest test of supply chain management ever. Vendors for products and services have been affected by the virus in many ways, and supply chain managers have had to dig deep to come up with solutions to supply chain interruptions, making supply chain management one of the leading employment sectors today. Training and education in supply chain operations, management, and functions have proven to be a highly lucrative and in-demand skill set for professionals across multiple industries.

Prepare for a Post-COVID Future with APICS

When an industry looks for the products and services it needs to manufacture the goods that consumers demand, they look toward supply chain managers. A once-obscure job title has become the focus of many companies and businesses around the world. The importance of obtaining the necessary materials to keep a production plant running cannot be understated, and thus, supply chain management has never faced such an exciting, innovative, and revolutionary time as it faces today. Global supply chains ensure a better flow of goods and services for everyone, everywhere—whether they know it or not.

The post-pandemic world, whatever that may look like, will create challenges and opportunities unlike any other event in recent history. APICS can help you obtain the skills you need to join the supply chain professionals working to make sure the world has what it needs while we prepare for a post-COVID future. From certifications in production and inventory management to the only end-to-end supply chain certification course available, you’ll be prepared to tackle whatever obstacles the pandemic throws at us. 

If you’re interested in learning more about managing the global supply chain, the Supply Chain Operations Reference (SCOR) model is the go-to framework for global supply chain excellence. Contact us to learn more about joining the Supply Chain and Operations Community in Houston and its surrounding area.

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