What Is Global Supply Chain Management?

Supply chains can exist on very local levels, such as farmers selling produce to their towns' grocery stores, where it is packaged for final sale. They also exist in the international arena and, in this context, are likely to require a keener management of resources, products and processes. Global supply chain management involves the direction and supervision of all steps in an international supply chain.

Many different businesses might have to work together to form a supply chain. The people who produce the raw materials for a product might not be the same ones who turn these materials into the product's component parts. There might be other people who assemble the final product and then still others who are responsible for its final packaging, marketing and sale. All throughout the supply chain, there are also people responsible for the transportation and storage of the goods involved. All of these people may or may not work for the same company and, more frequently today than ever before, they might not even live in the same country.

When multiple organizations and many people are involved, timing becomes an especially great challenge. It is important that each constituent of the supply chain is able to cater to the time restraints being placed on the next step and that, at all stages, realistic estimates are made on when goods can be delivered. If a factory is required to deliver its finished goods by December and production is a two-month process, then the absolute deadline to deliver raw materials to the factory is October. If it is unlikely that a particular source will be able to supply the raw materials by that time, another one may need to be sought. Global supply chain management seeks to avoid weak links in the supply chain and to provide contingency plans in the case of any failures to meet deadlines or quality standards.

Global supply chain management demands excellent organization as well as adaptability. The larger and more complex a supply chain, the more room there is for miscommunications, delays and other obstructions to a smoothly-run business. While new communication technologies have facilitated global supply chain management in many ways, global business continues face unique challenges. Laws, taxation policies and the political environment of countries can change, and these changes can call for adaptations in the supply chain. Successful global supply chain management also ensures that all contributors are motivated and communicative and that cultural differences are integrated into the total system in the most respectful and productive way.