This article discusses the major issues faced in global supply chains, including trade regulations violations, breakdowns in cross-border shipments, inability to keep up with modern customs technology, and inventory challenges. Case studies of Audi, Toyota, BMW, and Mercedes are included.
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Running head: GLOBAL SUPPLY CHAIN ISSUES GLOBAL SUPPLY CHAIN ISSUES Name of student Name of university Author’s note:
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1 GLOBAL SUPPLY CHAIN ISSUES Answer of question: Increased international shipping volumes leads to the increase in the exposure to the Trade Regulations Violations:The global trade regulations alters often, and balancing the compliance with the business requirements represents the challenges to most of the experienced teams of the supply chains. In the situation of the automotive company Audi, where the marketing and the supply of the cars is done all over the world, the regulations and thecompliancerulesaffectssignificantly(Kersten,BleckerandRi2015).Theyare considered to be not properly prepared for the operating in the global marketplace. With the threat of the severe penalties for the non-compliance, the compliance department could play the critical role in the strategy of the supply chain of the company.Microsoft Dynamics GP could be considered as the accounting software or the ERP software package that could be used by the organisation for improving the supply chain management and track the delivery orders of the company using the enhanced methods of distribution, advanced picking, demand planning and the inventory management. The rule that could be applied is the weakest link rule that denotes that the strict compliance team at any one location denotes nothing when there are some gaps in the customs skills in the company at any other locations. Until, the adoption of the automated solutions is done by the experts of the company, the business could face the significant issues that could lead to the exposure to the significant risk (Bode and Wagner 2015). Major breakdowns in the cross-border shipments:The global nature of the present business environment world could denote that the businesses should offer the varied product line for meeting the demands of the customers in the various countries. With the goods being exported and imported from the various countries, it is of high probability that the companies remains on the top of the dizzying array of the trade regulations. The sole mistake in the
2 GLOBAL SUPPLY CHAIN ISSUES compliance like the missing of any of the present regionally applicable classification and the requirements of licensing could mean that the company might face significant dangers in the delivery of the product to the appropriate location.This resulting delay leadsto the compromising of the complete supply chain and then it also negatively impacts the ground line. This is major problem in the Toyota corporation. In this organisation, the business makes several production and the import from the outer countries. The cost of the supply chain of the company could rise due to the delay of the delivery of the products (Matsuo 2015). The discoveries suggests that the outsourcing is one of the major potential areas of the opportunity of altering the costs.The SAP SCM could be implemented in the organisation for reducing the time that is spent in the delivery of the products to the end-consumers. The smart automotive supply chain could be implemented for practising the complete advantage of the increased interconnectivity, instrumentation, and the intelligence for reducing the costs (Chopra and Sodhi 2014). With the utilisation of the capabilities, this majorly maintains the optimalinventoryoftheincomingmaterials,spareparts,finishedproductsandthe accessories that are spread across the distribution centres and several repair shops of the dealers. Inability of the keeping up with the modern customs technology:The previous decade is under the steady progress in application of the technology to the requirements of the customs. The electronic systems are being implemented for the replacement of the outdated processes of the customs as the automization grows to be the priority for the trade authorities all across the world (Das et al. 2016). The modern initiatives implements the various techniques for the fulfilling of the requirements like the advance fillings of the e-manifest and the innovative licensing and the documentation requirements. The company BMW was facing this issue in their management of the integration of the modern supply chain in their company process. The company is forced to the alteration of the procedure and also migrate to the entirely
3 GLOBAL SUPPLY CHAIN ISSUES innovative software platforms. In the global supply chain, the integration of the modern technologies is growing to be immensely challenging (Ravindran and Warsing Jr 2016).The proper implementation of the policies and the management of the regulations all across the world could be managed by the implementation of the information system in the organisation. It would provide the updated information regarding the various regulations in the markets to the company. The BMW company is facing this issue but with the proper analysis of the requirements of the company and implement the innovative solutions in the supply chain. It led to the enhancement of the business strategy for managing the varied challenges and the issues in the supply chain. Inventory challenges in the global supply chain:The company Mercedes have been facing several challenges in the management of the inventory. The company is significantly investing in the global reorganisation of the supply chain network, which would set course of the growth and the efficiency with the intention of the reduction of the supply chain costs by almost 20 percent per vehicle (Fawcett and Waller 2014). This reorganisation involves the expanding of the global production and the network of the supplier closer to the customers as well as the markets. The extensively complicated received materials of production flows at the plants of the Mercedes Benz and transport of the innovative manufactured vehicles from the facilities of the production would be increasingly centrally managed in the more efficient and the flexible manner. For eliminating the issue of the inventory management, the company implemented their sole focus on the securing of the supply of the materials in the global networks of the production that leads to the reduction of the inventories, guaranteeing the on- time and regular deliveries of the modern vehicles to the customers all across the world, and the incorporation of the logistics organisation in the constant advancement of global network of production at the early stage (Tachizawa, Alvarez-Gil and Montes-Sancho 2015).The implementation of the SAP SCM could help in the improvement of the productivity of the
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4 GLOBAL SUPPLY CHAIN ISSUES staff and the tasks that are associated in the supply chain of the Mercedes. The accurate forecasting of the amount of the inventory that is required for the business could be determined using the SAP SCM. The innovative strategic methodology had been presented in the grand opening of new consolidation centre of Mercedes Benz in the country of Germany. The organisation could implement the SAP for the improved management of the inventory of the organisation. The SAP SCM process assists the suppliers, manufacturers, retailers, customers and the business partners to connect efficiently using the single platform and share the valuable information in the organisation.
5 GLOBAL SUPPLY CHAIN ISSUES References Bode, C. and Wagner, S.M., 2015. Structural drivers of upstream supply chain complexity and the frequency of supply chain disruptions.Journal of Operations Management,36, pp.215-228. Chopra, S. and Sodhi, M., 2014. Reducing the risk of supply chain disruptions.MIT Sloan management review,55(3), pp.72-80. Das, S., Warren, J., West, D. and Schexnayder, S.M., 2016.Global carbon fiber composites supply chain competitiveness analysis(No. ORNL/SR-2016/100| NREL/TP-6A50-66071). Oak Ridge National Laboratory; The University of Tennessee, Knoxville. Fawcett, S.E. and Waller, M.A., 2014. Supply chain game changers—mega, nano, and virtual trends—and forces that impede supply chain design (ie, building a winning team).Journal of Business Logistics,35(3), pp.157-164. Kersten, W., Blecker, T. and Ri, C.M., 2015. The Impact of Industry Supply Chain. Matsuo, H., 2015. Implications of the Tohoku earthquake for Toyota׳s coordination mechanism: Supply chain disruption of automotive semiconductors.International Journal of Production Economics,161, pp.217-227. Ravindran,A.R.andWarsingJr,D.P.,2016.Supplychainengineering:Modelsand applications. CRC Press. Tachizawa, E.M., Alvarez-Gil, M.J. and Montes-Sancho, M.J., 2015. How “smart cities” will changesupplychainmanagement.SupplyChainManagement:AnInternational Journal,20(3), pp.237-248.