Issues And Benefits Of Global Supply Chain Management

With the decrease in the trade barriers and increase in the technology, companies are operating in one country and expanding their operations globally. With this the competition is increased in the global markets. The two strategies implemented by the firms to remain competitive in the global market are seeking supplies and productions on a global scale, and reducing value added operations in house via outsourcing and strategic alliances.

With the use of the international supply chains the companies can have the advantages of low wages, for example in India, abundant labor is available and they work for low wages, with global supply chains a company can get raw material at cheaper rates, and they can also have benefit of proximity to markets. The global distributed system also gives firms the flexibility to react to the increased volatility in technology and marketplace. The global supply chain market network consists of export management companies, export packers, customs brokers, freight forwarders who help the businesses to export their products to the international markets.

The global supply chain involves many countries and also creates many difficulties for the companies. The main issues effecting the global supply chain processes are the costs of space, tariffs, and other expenses related to doing business overseas, exchange rate and market risks. Time is another big issue that should be addressed when dealing with global supply chain management.

The selection of the vendors or suppliers, decisions about the outsourcing planning are also issues associated with the global supply chain management.

As the global supply chain becomes more complex with every passing year, companies to be successful must adapt to the changing trends and incorporate them into their supply chain strategies.

Know About The Green Supply Chain And Its Benefits

People these days have became more concerned about the environment and also are aware of the problems like global warming and toxic ingredients usage. They are also looking for the different products which are environmental friendly after their usage. Green supply chain is the process of integrating environment thinking into supply chain management, including product design, material sourcing and selection, manufacturing processes, delivery of the final product to the consumers, and end-of-life management of the product after its useful life.

Benefits of Green Supply Chain Management:
The benefits of implementing a green sustainable supply chain is that profitability of the company is improved and it also helps the environment. A number of companies have shown that there is a proof of the link between improved environmental performance and financial gains. General Motors reduced disposal costs by $12 million by establishing a reusable container program with their suppliers.

Let us understand few benefits of green supply chain management for environment as well as business.

For Environment:
Making supply chain as green is possible by ensuring that suppliers are using recycled or recyclable materials where ever possible and the minimizing and sustaining the package can have positive impact on the environment and it also saves costs for the business. There are simple, straightforward, low cost steps that every business can follow to make a positive difference to the environment.

For Business:
The green supply chain management provides two major benefits for a business, it reduces the costs which are achieved largely through increased resource efficiency. Customers prefer the green products and thereby enhances the reputation of the business. Both businesses and consumers are increasingly using environmental issues as a criterion in their purchasing decisions.
The green supply chain management, these days is widely adopted for the environment purpose it serves.

Know About Closed Loop Supply Chain

Generally forward and reverse supply chains for a product are carried out by the different firms. When a firm controls the full process of forward and backward supply chain the result is called as a closed loop supply chain.

In closed loop supply chain process the manufacturer of the original products collects the used products from the customer or it can be done through indirect channels representing the original manufacturer's own field service force. Returns can be failed products or may be those purchased and returned simply. In this model, there are two reverse linkages, consumer to retailer and retailer to original manufacturer.

Closed loop systems helps the businesses to know the product failures and also decreases the costs. The close control and rapid recovery provided by a closed loop system allows minimum inventory for field support. Reducing inventory often produces additional benefits for firms like, it simplifies processes of retail and whole sale return which helps in reducing labor cost, reduces undesirable shrinkage and damage from returns, improves the database and visibility of products throughout their life cycle and increases the cash flow.

The benefits provided by the closed loop supply chain are:

• It reduces the cost of returns, transportation, warehousing expenses and time including the partial or full elimination of small package shipments.
• Increases the value of the salvage merchandise.
• It captures vital information and reliability, maintainability, and dependability of products supported.
• Automating and fully controlling the total returns process.

Supply chain management helps to save 1 to 3 percent or more of total revenues, particularly for organizations in a mature or stagnating market.

Know About The Drivers Of Supply Chain Management

Performance of the supply chain can be determined with the help of the drivers. The drivers of the supply chain consists of three logistical drivers and three cross functional drivers.

(A) Logistical Drivers

Facilities:
Facilities are the physical locations where the products stored or assembled. The major types of facilities are production sites and the storage sites. Economies of scales are used in centralization of facilities to increase supply chain efficiency.

Inventory:
Inventory consists of the raw materials, work in progress and the finished goods. Changing inventory policies can largely effect the efficiency and the responsiveness of the supply chain. 3 basic decisions to be taken by the business regarding inventory are, cycle, safety and the seasonal inventory decisions.

Transportation:
Transportation refers to the modes and routes for moving inventory throughout the supply chain. Faster transportation ensures more responsiveness but less efficiency of supply chain. Transportation supports a firm's competitive strategy. The different ways of transportation includes rail, road, sea water, pope lines and the air ways. Electronic transport is the fastest and the efficient mode of transportation. Transportation decisions includes mode, routes and in house or outsourcing the transportation.

(B) Cross functional:

Information:
Information connects various supply chain partners and allows them to coordinate activities. Information is crucial to the daily operations at each stage of the supply chain. An information system can enable a firm to get a high variety of customized products to customers rapidly and to understand the changing customers tastes and preferences.

Sourcing:
Sourcing is the process of purchasing the materials required for the production of the final products. Components of the sourcing decisions are the evaluation and the selection of the suppliers, in house or outsourcing.

Pricing:
Pricing involves determining the charges for the goods or services offered by the manufacturers. The price of the product effects the buying patterns of the customers thus effecting the supply chain performance.

All the above stated drivers are very crucial in determining the success of the supply chain management process.