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Supply Chain Logistics Management and Globalization

With the advent of globalization, supply chain and logistics management activities has become more important to the business companies worldwide. Today, there are growing practices of outsourcing and off-shoring by medium and big corporations to maximize their profits. When globalization brings huge opportunities for business around the world, it also brings complex supply and logistics management activities. A company operating in Canada may have its manufacturing facilities in China, India, Vietnam, or Malaysia and serves its customers throughout the world.

From the viewpoint of business, globalization fosters the global integration of trade, investment, information technology and free flow of goods, products and services globally. In the last decades, a number of countries have changed their traditional economic policies and redesigned their policies to open market domestically and internationally to take advantage from globalization and integrated supply management, which ultimately helps them to boost the development and investment. China, India, Vietnam, Brazil and other developing economies were able to take the opportunities from globalization and expedite their economic growth a lot, which ultimately helps global nations to improve their living standards and GDP.

In his best-selling book, “The World is Flat”, Thomas Friedman, mentioned ten major forces and one of the forces is what he describes as “supply chaining”. In his viewpoint, supply chain is a method of collaborating among businesses  to manage the flow of goods, information, and cash to deliver value for the consumer. Consumers remain as a focal point for a successful strategy of business corporation and the impact on the consumer is much more direct for supply chains because the consumer has placed increased demands at the retail level for an expanded variety of products and services. Although globalization increased complexity for the supply chain, the supply chains have to be performing very efficiently to enable the retailer and other organizations to satisfy the consumers and reap profit from the extended global market.

Globalization has created both opportunities and threats for companies, especially small and medium companies are dealing with more threats compared to big corporations in this era of globalization. New economic environment also creates more customer and new markets and sever competition as well. However, the big companies are having more advantage in competing and making profit due to their ability to apply economics of scale in supply and logistics management. The more collaboration than competition is needed in managing supply and demand of goods and services, which will also makes it possible for companies to be more profitably and sustainable in the global trade.

 © Canadian College for Higher Studies, 2020