Globalization is changing the way the international firms used to deal with their supply chain networks. This is happening because companies are actively seeking to compete and gain market share. Global companies nowadays manage multiple supply chains, not only to deliver goods on time, but to meet diverse customer and supplier wants related with pricing and packaging. Personalizing the offerings for various customer clusters is necessary to address these issues.
Volatility of markets, economic contractions and mediocre recovery cycles influence distribution, manufacturing, invoicing and sourcing. Reaching out to encompass new markets brings complex taxation, invoicing and localization burdens. Moreover, dispersed segments of markets ask for different pricing models and services. Hence, optimizing the supply chain is necessary to stay competitive.
Many businesses tend to apply outdated processes and technologies to global supply chain operations. Many times, available systems are not compatible with the modern demands. Lack of understanding of current situations and contemporary supply chain can be disastrous. It can result in a rise in costs and decreased efficiency. With the expansion of logistics, the ability to quickly estimate the cost and service implications must increase.
An optimized global supply chain can help a company in the following areas −
Reduced Costs − Companies accessing information relating to suppliers make better procurement decisions. Online supplier and buyer community management can reduce supplier sourcing and procurement costs.
Increased Transparency − Being a single point of access for supplier information as well as buyer-supplier communities is important. International supply chain operators can locate reliable suppliers regardless of location preferences with a global approach and transparent policy.
Lower Risk − An optimized supply chain lets the supplier meet financial, legal, safety, quality, and environmental regulations. As the regulations differ widely, flexibility becomes the key to risk management.
Support Legacy & New Products − Contemporary global supply chains require a billing partner and a supplier settlement platform. The platform needs to take care of taxation, invoicing and other crucial functions. It must encompass multiple fluid business-models to let the company reach international markets.
Solutions to Global Supply Chain Challenges − While looking for growth and quick expansion, companies must consider deeply about what their current supply chains are capable of. They must assess whether their capabilities are enough to meet global competition. In order to support the existing and future business objectives, companies must reconsider the management processes and implement best practices which are more flexible.