Analysis of Global Supply Chain Management and Business Performance

This report provides a comprehensive overview of Global Supply Chain Management (GSCM), defining its core components and practices. It explores the positive impacts of GSCM on business performance, including improvements in customer service, operational cost reduction, and enhanced financial positions through efficient supply chain design and inventory management. The report also examines the negative impacts, such as the complexities of maintaining effective global supply chains, the influence of political factors, and challenges related to inventory control and transportation. It highlights emerging trends like Direct to Market (D2M) and e-commerce, and their roles in shaping modern supply chains, along with the importance of optimizing selling and distribution channels. The report concludes by emphasizing the multifaceted nature of GSCM and the need for businesses to effectively manage these practices to achieve success in the international market.

GLOBAL SUPPLY CHAIN
MANAGEMENT

Table of Contents
INTRODUCTION...........................................................................................................................3
COURSEWORK 2...........................................................................................................................3
Impacts of Global Supply Chain Management practices.................................................................3
The Practices of Global Supply Chain Management..................................................................3
Positive Impacts of Supply Chain Practices on business performance.......................................4
Negative Impacts of Supply Chain Practices on business performance.....................................7
CONCLUSION................................................................................................................................8
REFERENCES................................................................................................................................9

INTRODUCTION
Global Supply Chain Management consists of various set of approaches in order to
effectively and efficiently integrating flow of raw-materials, finance and also information from
the supplier, manufacturer, wholesaler, distributor and retailer to the end customers. In today's
business environment, every company focus on developing its business activities and operation
across the national boundaries. Supply chain of companies can be referred as resources which
are required for delivering the goods and services to the end customers. In the present report,
explanation about the global supply chain management is done in brief. The report also critically
evaluates about the impacts of supply chain practices on the business performance.
COURSEWORK 2
Impacts of Global Supply Chain Management practices
Business organisations are focusing for tapping into international markets and going
global in order to gain various benefits of international markets (What is global supply chain
management?, 2017). Entering into new markets through global supply chains as it enables
organisation for growth and development of their business. Therefore, organisations are aiming
at creating effective global supply chain so that it helps in enabling them to increase their
business operations and reduce operational cost. This also provides organisation to have access
for new and advanced technologies through doing partnership with the foreign companies. Many
organisations operates their business operations and activities across the national boundaries thus
their supply chain focuses on effectively managing the entire process.
The Practices of Global Supply Chain Management
Business needs to focus on implementing best practices of supply chain so that it helps in
business to develop and get success and prosperity. Business organisation have value
propositions and best practices of supply chain and these factors help them to gain competitive
advantage and also separate them from intense competitors. The supply chain management
practices effectively creates service advantage and also become catalyst for the new businesses.
Following are given the emerging trends and practices of global supply chain management:
 Direct to Market (D2M): This refers to selling the products directly to customers within
UK or elsewhere in the global markets. Companies adopting to Direct to Market
approach focus on directly distributing the goods and services to end customers rather

than having any middleman. Instead of distributing it to large retailers or merchandisers
or brand names, companies sells product to end customers. These middlemen makes large
profits thus, direct to market practices helps business organisation to improve the profit
margins and also to take control of business De Marchi, Giuliani & Rabellotti (2018).
The firms implementing the D2M approach needs to create own brand identity and also
to build and direct the global supply chain which extends from the suppliers through to
retail stores or to warehouse of customer's. The main focus of global supply chain
practices is on managing the flow of three supply chains that includes information,
financial and products.
 E-Commerce: This is the way for beginning D2M also can be referred as stand-alone
ventures. E-commerce is considered as an easy and effective way for selling products and
gaining brand identity. This is an emerging trend that opens up multi-channel possibility.
E-commerce requires quick, effective and responsive supply chain. Any firm
implementing this approach or emerging trend needs to maintain responsive supply chain
and deliver the orders quickly to end customers. The main focus needs to be on customer
satisfaction otherwise they cancels the order and return shipments. The e-commerce
approach is all about positioning the products and also integrating it with the platform of
technology.
Positive Impacts of Supply Chain Practices on business performance
In the modern and global market place, firms may get impacted and influenced due to the
practices of global supply chain management. Customers expects from organisation to have
regular and steady supply of goods in good conditions and also at the lowest possible cost prices.
The practices of global supply chain leads to bring benefits in form of advances in the
communication element and also in transportation technologies. Business organisations needs to
focus on effectively managing the global supply chains so that it can selective cost-effective
solutions at every stage available in the supply chain and also to avoid business cost (The
Importance of Supply Chain Management, 2019). They can also gain competitive advantage in
the international markets through effectively managing the supply chain process and practices. It
is considered as the integral part of the business organisation and also acts as an essential part of
the business success. Following is given the critical analysis of the impacts of global supply
chain management practices on the overall business performance.

Impacts on Customer Service
According to the view of Freund, C. & et.al., (2018) retail industry industry is been in
forefront while application and adoption of supply chain management models and concepts. One
major concept that can be seen in such practices is that it effectively aligns the supply chain
initiatives with the overall business strategy which a company is pursuing. The effective and
efficient supply chain practices enable organisation to maintain good customer services and
provide them satisfaction. Customers expects from business organisation to get correct
assortment products and its delivery at the right time and right place. For example, Morrisons
focus on managing best practices of supply chain which enables firm to boost customer services.
As best supply chain practices effectively manages the delivery time of products and also after
sale support and it further provides satisfaction to end customers and boost customer services.
Impacts on operational cost
Galán (2018) suggests that business organisations effectively and efficiently managing
the supply chain management and practices lead to gain many benefits and advantages. For
example, Tesco managing effective global supply chain practices may get positive impacts on
the overall business performance and operating cost. Business firms like Tesco retailer depends
on supply chains for quick delivery of expensive products so that they can avoid costly stock or
inventories in stores. Thus, effective and efficient practices of global chain management impact
the operating cost of the company.
Manufacturing companies generally depends on the supply chain practices for reliable
delivery of materials to the assembly plants so that they can avoid materials shortages which can
shutdown the production. For example, unexpected delay in part shipment may lead to shutdown
of an auto assembly plant that may cost much money to company in form of lost wages.
Therefore, supply chain practices may bring great impacts on the business performance and
production cost as well.
Impacts on Total Supply Chain Cost
Koberg & Longoni (2018) also supports and states that retailers depend on supply chain
management for designing the networks which meets customer service objectives at lowest cost.
Thus, retailing companies focuses on maintaining efficient and effective supply chain that
enables them to be more competitive in international marketplace and gain further benefits. For
example, revolutionary supply chain of Dell company approach involves making of every

computer based for particular customer's order and then shipping of computers directly to the
end customers. And as a result of the same practice, Dell was able to manage the supply chain
and also to avoid large computer inventories which are sitting in warehouse or retail stores.
These supply chain practices saved millions of dollars for Dell and impacted on the total supply
chain costs. The practices of supply chain positively impacted on the Dell's performance as it
helped company to avoid computer inventory cost which could have become technologically
obsolete because rapid changes happens everyday in the technological factors.
Impacts on financial position of the company
Kovács & Illés (2019) describes that Business firms puts much emphasis and provides
value to supply chain practices as it helps in controlling and reducing the cost of supply chains
and also improvising the financial position of company. This factor can bring dramatic
improvement in the business performance as profits gets increased. The business organisation
may also get impacted positively due to supply chain practices as it helps in reducing the use of
large and expensive fixed assets. The business performance gets improved by reducing the usage
of warehouse, plants or transportation vehicles within the supply chain due to the effectiveness
of the supply chain practices.
For example, supply chain experts of Sainsbury's focus on redesign of the supply
network properly for serving the customers of UK from 6 warehouse rather than 10. This will
help Sainsbury's to avoid building and maintaining four expensive warehouse buildings.
Effective and best practices of global supply chain also helps in speeding up the products flow to
the end customers. For example, if any business organisation makes and delivers the products to
end customers within 10 days instead of 30 days, company can invoice the customers 20 days
sooner. This will provide positive impacts on the business performance of the company in form
of increasing the cash flow by quickly invoicing the end customers.
Impacts on selling and distribution channels
Kwak, Seo & Mason (2018) suggests that business firms needs to focus on adding on the
activities that will differentiate it from the competitors in the global markets. In the global supply
chain management, organisation needs to focus on exploiting and improving such opportunities
that effectively encourages innovation. The selling and distribution channels need to compress
the operations time as much as possible for meeting the customer's and distributor's demands
who requires prompt delivery of products and services. Thus, optimal channels of selling and

distribution helps company for reducing the artificial connection cost. Business organisation may
also gain benefit in form of cutting down the time which is taken for delivery of information and
goods.
Negative Impacts of Supply Chain Practices on business performance
Li, Holsapple & Goldsby (2019) argues that Global supply chain management exhibits
different dimensions such as selling and distribution, stock or inventory control, information
technology and building relationship with various reliable business enterprises. The most
important and key component which is required for the global supply chain is to be multifaceted
and excellent. Global supply chain practices lead to bring many positive impacts and benefits for
the business organisation but it may also lead to bring many issues and challenges as well.
Maintaining effective and efficient global supply chain is difficult and complicated. Inventory or
stock control demands that practices of supply chain needs to effectively manage the products
which are available in stock. It also demands that supply chain needs to focus on shortening the
process by order, reducing production process, deliver process and cost and also collecting these
products in effective manner. Global supply chain management needs to be maintained properly
and effectively in order to increase overall performance of business otherwise it leads to bring
negative impacts on the business performance.
Rodrik (2018) supports and states that Business organisations operating their business in
international markets needs to maintain global supply chains which leads to increase the
uncertainty as with every additional market which is involved in it. Political elements of country
can lead to bring dramatic influences and impacts of the supply chain practices of the business
firms. And this factor can bring great and dramatic impacts on the business performance as well.
Shipping and transportation factors may get impacted and influenced due to many factors
happening in operating country and it further impacts the overall business performance. These
factors may include natural disaster such as floods, or earthquake, war situation, civil unrest and
labour strikes. Global supply chain can get affected due to shortage of product components or
raw materials and even due to transportation problems, which further impacts the overall
business performance.
As per the view of Thorlakson, de Zegher & Lambin (2018) Business performance may
get negatively affected and impacted because of fluctuation in the currency as it affects the
supply chain process and practices (What are the biggest challenges of managing global supply

chains?, 2017). For example, businesses need to deal with customers and suppliers in overseas
market, and changes in currency lead to bring changes in charges and income. And this further
impacts the overall profitability and business performance.
CONCLUSION
Organisation now-a-days operates in both domestic and international markets thus need
to effectively maintain both the domestic and global supply chain. The global supply chain
management leads to bring both positive and negative impacts on the business performance. The
effective maintenance of global supply chain leads to bring great benefits and advantages for
company. Whereas, companies may also has to face various issues and challenges due to global
supply chain management. The report has briefly described the practices involved in the global
supply chain. The brief description is also provided for the impacts of such practices on the
overall business performance.

REFERENCES
Books and Journal
De Marchi, V., Giuliani, E., & Rabellotti, R. (2018). Do global value chains offer developing
countries learning and innovation opportunities?. The European Journal of Development
Research. 1-19.
Freund, C. & et.al., (2018). Impacts on global trade and income of current trade
disputes. Macroeconomics, Trade Investment (MTI) Practice Notes, July. (2).
Galán, E. M. (2018). A Contribution to Evaluate the Impact of Global Value Chains (Doctoral
dissertation, Universidade de Lisboa (Portugal)).
Koberg, E., & Longoni, A. (2018). A systematic review of sustainable supply chain management
in global supply chains. Journal of Cleaner Production.
Kovács, G., & Illés, B. (2019). Development of an Optimization Method and Software for
Optimizing Global Supply Chains for Increased Efficiency, Competitiveness, and
Sustainability. Sustainability. 11(6). 1610.
Kwak, D. W., Seo, Y. J., & Mason, R. (2018). Investigating the relationship between supply
chain innovation, risk management capabilities and competitive advantage in global
supply chains. International Journal of Operations & Production Management. 38(1). 2-
21.
Li, X., Holsapple, C. W., & Goldsby, T. J. (2019). The structural impact of supply chain
management teams: Supply chain agility development in multidivisional
firms. Management Research Review. 42(2). 290-310.
Rodrik, D. (2018). New technologies, global value chains, and developing economies (No.
w25164). National Bureau of Economic Research.
Thorlakson, T., de Zegher, J. F., & Lambin, E. F. (2018). Companies’ contribution to
sustainability through global supply chains. Proceedings of the National Academy of
Sciences. 115(9). 2072-2077.
Online
The Importance of Supply Chain Management. 2019. [Online]. Available through:
<https://cscmp.org/CSCMP/Develop/Starting_Your_SCM_Career/Importance_of_SCM/
CSCMP/Develop/Starting_Your_Career/

Importance_of_Supply_Chain_Management.aspx?hkey=cf46c59c-d454-4bd5-8b06-
4bf7a285fc65>
What are the biggest challenges of managing global supply chains?. 2017. [Online]. Available
through: <http://www.tradeready.ca/2017/topics/supply-chain-management/biggest-
challenges-managing-global-supply-chains/>
What is global supply chain management?. 2017. [Online.] Available through:
<http://www.tradeready.ca/2017/topics/supply-chain-management/global-supply-chain-
management/>