Global supply chains

What is a global supply chain?

Global supply chains are networks that can span across multiple continents and countries with a purpose of sourcing and supplying goods and services. Global supply chains involve the flow of information, processes, and resources across the globe.

What is Global Supply Chain Management?

Global supply chain management oversees and improves the flow of goods and services across borders to ensure they reach customers efficiently. It involves managing every stage of the supply chain, from sourcing raw materials to production and distribution. Strategic measures, such as planning demand, managing inventory, working closely with suppliers, and automating processes, are used to make operations smoother and more efficient. This also means handling the challenges of international trade, including different laws, cultures, and global risks. The goal is to improve efficiency, lower costs, and reduce risks while focusing on sustainability and ethical sourcing. This helps build a strong and responsible global supply chain.

What is the difference between a global supply chain vs a local supply chain?

Global supply chains

A global supply chain utilises low-cost country sourcing. It’s the procurement of products and services from countries with lower labour rates and reduced production costs than that of the home country. A global supply chain will usually flow from your own organisation in your home country as a buyer across your supplier tiers; it’s these suppliers who will be located in other areas of the globe.

Local supply chains

A local supply chain will look to optimise suppliers who are regional to your own organisation. In some instances, organisations will look to leverage “home grown” supply routes. This means all suppliers feeding into your supply chain will be located within the country in which your organisation is based, or the supply chain can be even closer to your organisation. It may even be within the same state/city/district, which often gives a clearer visibility of the whole supply chain from raw material through to consumer.

However, there are both positives and negatives with global supply chains and the total landed cost or total cost of ownership should always be factored into the true costs.

What are the advantages of globally sourced goods

Take a look at some of the advantages of globally sourced goods.

Is a global supply chain right for our organisation?

Each organisation will need to take a calculated view and weigh up the advantages and disadvantages of operating with a global or local supply chain.

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