What is Global Supply Chain Management?

Global supply chain management is a broad term that covers all aspects of a product's lifespan, from conception through distribution to consumers. The study of planning how goods and services will get from producer to consumer is known as global supply chain management (GSCM). The supply chain, as the name implies, is a group of network functions, organizations, and personnel. It begins with those who produce and supply raw materials or components to manufacturers, continues with logistics services that carry finished goods to warehouses and distribution centers, and ends with wholesalers and retailers purchasing the goods.

Need of Global Supply Chain Management

It takes a coordinated effort from everyone in the company, as well as coordination with all outside suppliers and service providers, to be successful. This involves a multi-faceted approach to supply chain management, including people, work, and technology.

• People: Employees are at the heart of every firm; they are necessary for the supply chain management. People involved in supply chain management must have the skills and knowledge to manage product acquisition, manufacturing, storage, and transportation.
• Processes: In supply chain management, processes are the actions taken to maintain customer satisfaction. Processes contain all aspects of the supply chain, including procurement, distribution, transportation, warehousing, sales, and customer care.
• Technology: In the supply chain, technology is used for connecting people and processes. People in the supply chain, on the other hand, will not employ technology unless it is simple to implement. Supply chain success will depend on a company's careful selection and deployment of supply chain technology.

Benefits of Global Supply Chain Management

• Despite massive distances, most products, services, and consumables are transported with the aid of the global supply chain. The development in communications and advances in transportation have allowed for a steady and regular supply of products across nations in good condition at the lowest possible price. When companies remain committed to finding new ways to increase the efficiency of their supply chains, they can meet the predicted demand while offering affordable rates.
• Companies can reduce their costs and waste by using global supply chain management. This will increase the overall revenue of companies along with the improvement in strategies by allowing them to overcome uncertain market conditions.

How Does Global Supply Chain Affect Stock Market?

The cost of stocks and other commodities is determined by supply and demand in financial markets. The demand for stocks is affected by economic statistics, interest rates, and corporate results. The entire supply of equity is influenced by market dynamics, the financial environment, and changes in trade policy.

The pandemic outbreak was a very disastrous moment for the world. It put the lives of millions of people at stake. Its impact on health and mortality was most certainly tragic, and its impact on the world’s economy was also catastrophic. It stagnated the world’s economy due to low or no income for most people, and the global demand and supply were highly affected. The stock market had reached an all-time low. After the COVID-19 outbreak, SENSEX and NIFTY fell by 38%. It led to a 27.31% loss in the total stock market in 2020. The second wave of COVID-19 was treacherous. However, its economic impact was comparatively low. During the first global shutdown caused by the pandemic, the Financial Times Stock Exchange of the United Kingdom fell by 29%. This was due to transportation restrictions. The stock of some other sectors such as hospitality, tourism, and entertainment dropped by more than 40%. Though the global supply chain was greatly affected, post-pandemic recovery has been good. Every major economy is getting back to normal.

International Business

Any commercial activity or transaction between enterprises, companies, consumers, or government agencies that crosses boundaries into different countries and regions is referred to as an international business. These international transactions aren't limited to a single currency, rate of interest, or asset. Anything of value traded between the engaged parties is considered international commerce, including goods and services, technology, capital, workers, and proprietary information.

In early 2022, the cost of raw materials spanning from wheat to various metals increased as a result of previous sanctions affecting air and sea shipments of Russian-produced and exported goods.

Russia and Ukraine are two of the world's largest wheat producers, with exports reaching a 14-year high in February when Russia attacked Ukraine on February 24, 2022.

International Business Skills

• You can communicate with industry professionals from all over the world in person, over the phone, or in writing. The capacity to deliver your message effectively and properly regardless of media and management is one of the most important international business skills.
• If you want to work for a global market, you'll have to be cross-culturally proficient. You must be able to approach your work with sensitivity to another's unique experiences and consideration for other opinions.
• Growth from within can be achieved by improving your leadership skills. When you take charge of projects and speak up about your abilities, you show that you care about the company and that you can guide others to success.
• In addition to standard stocks, shares, and securities, the global economy is moving towards the use of cryptocurrency and other types of digital currency. As technology becomes more entangled with business operations, a basic understanding of marketing and data analytics can assist in identifying developing markets and finding the best way to service them.

Advantages of International Business

International business is significant for both nations and businesses. It provides them with many advantages.

• It encourages a country to obtain foreign exchange that can be used to import goods from other countries.
• It stimulates a country's expertise in the manufacturing of goods that are both high-quality and inexpensive.
• It assists organizations in increasing revenues by selling products in countries with high expenditures.
• It aids the organization in creating good use of its surplus resources and boosts the revenue of its operations.

Common Mistakes

Supply chain management is more than just getting things from the producer to the retailer. Often forgotten is the buyer, who is the last party involved in supply chain management. People make the mistake of concentrating more on stocks, and neglect vital information like material costs, site traffic, online posts, and other factors.

Context and Applications

Global supply chain management is a fundamental topic in business and is important for courses such as Master of Science in Supply Chain, Master of Business Administration (Operations Management), Postgraduate Diploma in Supply Chain, Executive Program in Operation and Supply Chain, and Diploma in Inventory Planning and Stock Control.

Related Concepts

• Financial Accounting
• Marketing Management
• Statics for Manager
• Foreign Exchange
• Stock Market

Practice Problems

1. The application of data that redefines the boundaries of global business is termed as___________.

1. Society
2. Technology
3. Economy
4. Cultural values

Answer: b

Explanation: Technology represents the implementation of understanding of expertise that reshapes the global commercial landscape.

2. The very first stage of supply chain management is______.

1. Planning stage
2. Sourcing stage
3. Directing stage
4. Organizing stage

Answer: a

Explanation: The project does not ever progress beyond the planning stage unless proper strategies and planning are devised. The planning stage provides a road map for the companies for their smooth business operations.

3. The product's market value can be improved by_________.

1. Transportation
2. Handling
3. Processing
4. Supply chain management

Answer: d

Explanation: Supply chain management entails aggressively restructuring a corporation's supply-side activities to optimize customer satisfaction as well as obtain a competitive edge throughout the marketplace.

4. Globalization is a concept that refers to_____

1. Global warming and their effects
2. Less income worldwide
3. More interdependent world
4. Less foreign trade and investment

Answer: c

Explanation: Globalization has contributed to a society or civilization that is more interconnected as well as interlinked.

5. The ____company is a global manufacturer, distributor, shareholder, and operator.

1. Multinational
2. International
3. Transnational
4. Global

Answer: c

Explanation: Transnational corporations are major organizations that have their headquarters within a particular country but operate throughout the globe.