Global supply chain is a system of managing the process of transferring a product from the supplier to the customer. This process involves a lot of aspects, and all of them have to be followed in order to deliver goods in pursuance of law. Some of them are currency and political stability, environmental and labor laws. A great impact to the supply chain is made by security and transportation cost, as abidance by worldwide-accepted rules can improve the whole company from economic and social sides.
The management of supply chain depends on the rise of globalization; it evolves according to new technologies. With a well-organized system of supplies, it is easier to find qualitative things at reasonable prices and get them all the time from the supplier himself, without any mediators, as the security of every item is easy and understandable for every person. Following the global supply chain, some new opportunities for the markets will be brought and will simplify the process of exchanging products or services. Nevertheless, the global supply chain, as well as globalization, has some disadvantages. For example, there is a great risk of market instability in the global supply chain, which cannot be eliminated fast, as every aspect of the company is involved in the development of a company. One of the main deficiencies of the global supply chain management is the money, time and resource investments in implementing and overlooking the supply chain (qtd. in Kokemuller, 2015).
According to the study of Global Supply Chain Institute, the political situation is one of the main factors that affect the global supply chain. Corruption, bureaucracy and property rights give a significant impact to the supply chain, as they affect every operation. Because of some extraordinary political situation or conflict, the transportation of goods can be disrupted or delayed, and it will certainly slow the process of delivery (Stank et al., 2014). The rising labor rated production, high fuel prices and increasing inventory for curbing the risk are obstacles extending delays or disruptions. As a consequence of such problems, many companies face hidden costs and big risks concerning offshoring. Same connections can be found if analyzing the economic situation. It affects the global supply chain by generating returns from investments. The state of the economy has a great impact on the foreign relations, price inflation and exchange rate stability.
Private firms have been forced to watch and protect the environment and the health because of environmental regulation. It has been done in order to activate the process of improving awareness in the state of the surrounding world. Following Roberts (2003) the supply chain management of environmental issues helps with protecting a source of intangible value - corporate reputation. Those, who are into the global supply chain, seek to develop every aspect of the management, and paying attention to social goals is an inseparable part of being a well-developed company, which is able to dominate over others. The laws are created in order to improve the behavior in the pursuit of social goals (Mitnick, 1980). Huge companies used to organize environmental performance for suppliers waiting for the benefits of their own business, not for social benefits.
When companies face problems with rising prices in big cities, where too much manufacturing business are concentrated, they move to small towns in order to create a new, powerful company, which will glorify that locality. Some companies cooperate with the small firms, which have to be reorganized. They offer those firms help and absorb it, becoming huge, powerful concern that are able to rule the whole state.
The global supply chain is a mighty system to manage all the deliveries and transportation throughout the world. It has both advantages and disadvantages affecting human lives and markets. The global supply chain is to be controlled by governments, and the system of regularization has to be developed in different directions of economy, ecology and politics.
References
Kokemuller, N. (2015, April 26). The Disadvantages of Global Supply Chain Management. eHow.com. Retrieved from http://www.ehow.com/about_5122848_disadvantages-global-supply-chain-management.html#ixzz1rS8yrI00
Mitnick, Barry (1980). The Political Economy of Regulation: Creating, Designing, and Removing Regulatory Forms. New York: Columbia University Press.
Roberts, S. (2003). Supply Chain Specific? Understanding the Patchy Success of Ethical Sourcing Initiatives. Journal of Business Ethics, 44(2/3), 159-170.
Stank, T., Burnette, M., Dittmann, P. (2014). Global Supply Chains. University of Tennessee: Global Supply Chain Institute. Retrieved from http://globalsupplychaininstitute.utk.edu/publications/documents/GSCI-EPIC-paper.pdf
