Essay: The Impact of Global Supply Chain Management on Nations

This essay provides a comprehensive analysis of global supply chain management (GSCM), exploring its impact on international trade and the distribution of economic opportunities. The essay begins with an introduction to GSCM, defining its key components and highlighting its significance in the context of transnational companies. It then delves into the impact of GSCM on economies of scale, examining how the shift of labor-intensive production to developing nations and the role of information and communication technology have influenced income distribution and economic growth. The essay uses examples of leading global supply chain companies, such as Amazon, H&M, and McDonald's, to illustrate effective GSCM practices. It also identifies and discusses various challenges in GSCM, including logistics and supply chain costs, trade regulation compliance, supplier relationships, inventory management, transportation delays, supply chain risks, and the need for efficiency and sustainability. The conclusion argues that GSCM has not necessarily leveled the international playing field, but has increased the unequal distribution of income across nations.

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Managing the Global Chain
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3/22/2020
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Managing the Global Chain 1
Contents
Introduction to global supply chain management......................................................................2
Global supply chain impact on economies of scale...................................................................3
Examples....................................................................................................................................4
Challenges of global supply chain management........................................................................5
Conclusion..................................................................................................................................8
References..................................................................................................................................9

Managing the Global Chain 2
Introduction to global supply chain management
Global supply chain management in commerce is reflected as activity of goods and
service distributed across transnational companies in order to gain profit maximisation and
minimise the wastage by using global network. It can be said that the global supply chain
management is similar to SCM concept however the major concentration is on organisations
and companies that are transnational. The six major areas of global supply chain management
include logistic management, customer orientation, competitor orientation, supply
management, supply chain coordination and operations management. It can be said that a
global supply chain is successfully managed through complying different international
regulations that are issued by non-governmental organisations for example United Nations
(Gencer, 2017).
Literature reflects that GSCM can be influenced by various policies imposed in order
to regulate the supply chains across the globe. Therefore non-governmental organisation and
governmental organisation are found to have major roles in creation and enforcement of
regulations and laws, which organisations in transnational activities need to abide. Global
supply chain management has come up with various advantages as well as challenges (wto,
Supply chains in the economics literature, 2019).
The Essay discussion will include critical analysis on managing global supply chains,
considering various challenges that have been placed or a global supply chain management
must be facing. The discussion will be supported through some of the common examples of
top global supply chain leaders. There have been technological and infrastructural
developments in global supply chain management. The research question for this essay
reflects if the development of global supply chain management has the potential to level

Managing the Global Chain 3
international playing fields or provide further advantage for the developed nations
(Schlegelmilch, 2016).
Global supply chain impact on economies of scale
The literature reflects that various unskilled labour intensive production, has shifted
considering from advanced country organisation to the developing nations. The major reason
for this shift or offshore is low-cost unskilled labour in the developing nations, which has
imparted a competitive advantage that was combined with institution and final assembly
operations that could able to acknowledge specific technical know-how. The literature
identifies that information and communication technology has made profitable international
production feasible which has enabled disbursed complex tasks to be coordinated at a very
low cost as compared to the developed nations. Therefore, it has been identified that global
supply chain growth has impacted the distribution of income across nations. Considering low
value added manufacturing activities, needs reflected to be successfully completed and has
been contributed to higher rates of economic growth and industrialisation in various Asian
developing economies (wto, Supply chains in the economics literature, 2019).
Considering integration with developed economies may even get stronger as some of
these nations consider moving value chain upward with advanced technology and exposure
and develop human capital. On the other hand it has been identified that the exclusion of
several developing nations like Africa has been continued which reflects widen gap among
various nations in developing world. The global production fragmentation has impacted the
distribution of income within nations (Puck & Mudambi, 2016).
Considering the condition of advanced economies, negative affect has identified in
production fragmentation on various issues like unemployment for semiskilled and low
skilled workers which was the initial concern. Considering the developing economies the

Managing the Global Chain 4
fragmentation of production is considered to reflect employment for a large number of
unskilled labours. This reflects increase in shoring that reflects demand for skilled labour in
the developing nations. The Gap and distribution impacted within and across nations are
likely to impact policy of trade and eventually the supply chain Evolution (unctad, 2020).
Examples
One of the popular examples that reflect top global supply chain leaders includes
Amazon. Amazon is continued to be the leader considering innovation through its supply
chain and products. For instance, the company has been selling eco-voice control home
speakers to several million consumers that allow them to use and search for information from
internet, complete online tasks, play music and controlling of various other home devices.
Moreover Amazon prime offer is a service offered to the customer to deliver the product the
same day or in one day which reflects more efficient global supply chain management of the
company. This included logistics system of delivering from local stores along with the
company and warehouses (Oke & Prajogo, 2016). This reflects effectiveness and efficiency
of global supply chain management.
Another example is from retail industry and fashion industry brand that is H&M. The
company is dealing with fast fashion retailing and reflected strong sustainability record while
working with worker rights. The company has been able to conduct and operate effective
global supply chain so as to reach out to maximum customers across the globe with cost
efficiency and on-time delivery. Corporate supply chain team of McDonald’s has excelled in
upstream supply networking. They have been promoting outsourced vendors, franchisee
partners, corporate stores and suppliers. The company uses an effective method like council
meetings in order to coordinate with the new product innovation with the suppliers and
technology advancement. The supplier performance index has been using by the company to

Managing the Global Chain 5
consider management of bass expectation. However the company finds challenges of
differentiator when it comes to behavioural and cultural differences while sharing process,
products and innovations and most importantly staffing teams (Ayers, 2017).
Challenges of global supply chain management
The report by World Trade Organisation reflects that the changes are not constant that
is to relocate the business. The strategies adopted by supply chain managers are to structure
the production more efficiently which has eventually become more complex. Therefore the
change of location for more cost-effective production change with the new locations opens
up. This shift also impacts the global distribution of economic opportunity and job and may
act as a challenge for business, society and governments (wto, Global value chains in a
changing world, 2019).
There are various issues related to global supply chain management. One of the
major issues is through logistics and supply chain management aspect. This aspect reflects
the challenge of costing that is managing the budget. As discussed from previous section, it
has been identified that a company is looking for more cost-effective and efficient location
for production. As the new location comes up, the previous location found fewer advantages
which reflect transfer of the production system. However, cost in this relocation is quite high
whereas the time consumption is also high due to change in all the supply chain management
aspects, changing business models and various other activities performed during supply chain
management (Cottrell, 2015).
Considering supply chain strategies, the major challenge that has been identified
through global supply chain management is increasing international shipping volumes which
impact more exposure to violation of trade regulations. The trade regulations across the globe
are being changed frequently and balance compliance among organisations requirements

Managing the Global Chain 6
reflects the challenging aspect to most effective supply chain strategies of the teams. In some
of the aspects, organisation may also find that they are not been enough prepared to conduct
operations in the global market place. Moreover due to threat of penalties for the inability to
comply with the changing trade regulations, supply chain strategy reflects a major role in
compliance department. Therefore the major challenging question is how a company is going
to keep pace with shipment increment and growth of business (Doole & Lowe, 2008).
Considering supply chain members, one of the major challenges identify a supplier
relationship. Through creation of harmonious and mutual sound relationships with suppliers
and partners the company is able to provide good quality products and with higher service to
the customers in schedule time. Through global supply chain management or relocation of the
production this is one of the major challenges as finding the right suppliers that are able to
provide high standard products along with efficient services are difficult, time consuming and
costly tasks to perform. A supplier relationship is allowing a company to create opportunities
for a place of improvement in the performance of the company, which could be at the place
of threat due to global supply chain management (Sodhi & Tang, 2014).
Considering inventory and warehousing, one of the major challenges is Inventory
location inefficiencies, which can cause in case of lack of inventory oversight within the
warehouse that reflect increase in cost and slow operations. Inadequate insight into inventory
location could act as a major challenge as a time to find the products to ship will be longer.
This reflects the loading process will increase and development of labour allocation back up
and Dock door schedule will be created (Werikat, 2017). Another challenge is related to
warehouse and inventory includes redundant process. It has been identified that the barcode
technology is able to eliminate or reduce the issue of pick ticket and various other documents
that needs to pass through various parties for example loader, struggle, pickles, checker and
others. Therefore redundant process also reflects a major challenge in global supply chain

Managing the Global Chain 7
management. Moreover warehouse layout and space utilisation is another aspect to consider
which can act as a challenge to global supply chain management and optimise space may
increase unnecessary labour cost. Moreover high selling inventory and keep fast moving that
are not constantly travelling or lifted by truck drivers reflect farthest reaches in the warehouse
(industryweek, 2019).
Considering transportation, one of the major challenges is unforeseen delays.
Procurement of raw material may be easier but the delivery of the product will take hundred
percent on the time. This reflects transportation cost, especially in the case of variety of
shipping time frames and time differences. Moreover at times when the items are sourced
from various nations but delays generally occur which reflected challenge for transportation
and logistics (inboundlogistics, 2020).
Considering supply chain risks, one of the major challenges is on consistent practices
of trade that may reflect compliance issues. The study reflects that international expansion
includes various market entities or operations requirements. Each expansion of the business
requires another specific set of operating processes. Not considering the strict adherence to
operating procedure standards, organisation may frequently decentralize the practices of trade
and inconsistent would initiate impacting the compromised supply chain operations.
Moreover constant change has been identified in the marketplace which reflects variety of
sources like political agendas, consumer demand and global sourcing which act as a major
challenge in the operations of supply chain management and reflect the major risk in supply
chain (Melnyk, Swink, & Hartley, 2017).
Considering efficiency and sustainability, one of the major challenges is fast changing
markets. It has been identified that the market is changing every day with the technological
advancement also been changed. The major challenge for the business is to cope up and adapt

Managing the Global Chain 8
innovations and the changing market requirements considering technological updates.
However due to objective of global supply chain management companies are to stay efficient,
changing technological advancement all the time would be flexible but may cost higher and
inevitable for the company (Judith & Steven, 2002).
Considering upstream and downstream linkages it can be said that another challenge
is quality customer service. It is found that global supply chain management is centralized
which reflects inability to understand needs of the customers. This reflects providing right
quality and right quantity of the product for right price offered to the customer. Moreover this
reflects a requirement of perfect setting and timing, which may be a major challenge in global
supply chain management asked the sourcing is from various nations and the location of the
production is different (Rialp & Rialp, 2007).
Conclusion
From critical analysis of global supply chain management, it can be said that the
GSCM does not provide further advantage to developed nations; in fact this has increased the
unequal distribution of the income and employability in developing nations. This reflects that
there are potential to level or being fair in international playing for all economies that are
developing as well as developed economies.

Managing the Global Chain 9
References
Ayers, J. (2017). Retail supply chain management. Florida: CRC Press.
Cottrell, S. (2015). Skills for success: Personal development and employability. Macmillan
International Higher Education.
Doole, L., & Lowe, R. (2008). International marketing strategy: analysis, development and
implementation. Cengage Learning EMEA.
Gencer, Y. (2017). Supply chain management in retailing business. In Ethics and
sustainability in global supply chain management, 197-210.
inboundlogistics. (2020). 6-global-supply-chain-challenges-to-ignore-at-your-own-risk.
Retrieved from https://www.inboundlogistics.com/cms/article/6-global-supply-chain-
challenges-to-ignore-at-your-own-risk/
industryweek. (2019). supply-chain-logistics-top-5-warehouse-challenges-and-how-to-
overcome-them. Retrieved from
https://www.industryweek.com/supply-chain/warehousing-and-distribution/article/
21965137/supply-chain-logistics-top-5-warehouse-challenges-and-how-to-overcome-
them
Judith, R., & Steven, R. (2002). Information Technology Service Delivery: an International
Comparison. Information Systems Management, 19(1), 62-70.
Melnyk, S., Swink, M., & Hartley, J. (2017). Managing operations across the supply chain.
New York: NY: McGraw-Hill Education.

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Oke, A., & Prajogo, D. (2016). ). Supply chain processes: Linking supply logistics
integration, supply performance, lean processes and competitive performance.
International Journal of Operations & Production Management, 220.
Puck, J., & Mudambi, R. (2016). A global value chain analysis of the ‘regional
strategy’perspective. Journal of Management Studies, 1076.
Rialp, A., & Rialp, J. (2007). International Marketing Research: Opportunities and
Challenges in the 21st Century. Emerald group publishing limited.
Schlegelmilch, B. (2016). The Future of Global Marketing Strategy. In Global Marketing
Strategy , 221.
Sodhi, M., & Tang, C. (2014). Supply‐chain research opportunities with the poor as suppliers
or distributors in developing countries. Production and operations management,
1483- 1494.
unctad. (2020). GLOBAL SUPPLY CHAINS: TRADE AND ECONOMIC POLICIES FOR
DEVELOPING COUNTRIES. Retrieved from
https://unctad.org/en/PublicationsLibrary/itcdtab56_en.pdf
Werikat, G. (2017). Supply Chain Management In Construction; Revealed. International
Journal of Scientific & Technology Research, 6(3), 106-110.
wto. (2019). Global value chains in a changing world. Retrieved from
https://www.wto.org/english/res_e/booksp_e/aid4tradeglobalvalue13_e.pdf
wto. (2019). Supply chains in the economics literature. Retrieved from
https://www.wto.org/english/res_e/booksp_e/aid4tradesupplychain13_part1_e.pdf

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