The Importance Of Global Supply Chain Management

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In today 's world supply chain is at the centre of the business, for many decades’ companies have outsourced and organised many jobs to suppliers and intermediaries creating expansion and, recreated designs and through innovative processes, such sourcing has resulted in global supply chain management. It is a connected series of activities which is concerned with planning, organising, coordinating and controlling of materials, parts, and finished goods from supplier to customer. It is concerned with two distinct flows/ function i.e. material flow and information flow through the organization (Stevens 1989). At every point of chain information and material is passed in order to improving the efficiency at every level.

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It also includes coordination, collaboration and expansion of business with channel partners and intermediaries, which can be suppliers, third party service providers and customers only in case of coordination. It also involves continuous improvisation of goods and services through continuous flow of material and information in all directions. In essence, supply chain management combines demand and supply management within and across companies (CSCMP 2011). Supply chain management is the active streamlining of a business and the overall goal is to deliver maximum value for the least possible total cost and create a competitive advantage for the business and society (SCM, …show more content…
For example, in the year 2000, a firm sourced between 21% to 30% of their total annual spend on a worldwide buying. Later in year 2005, total non-domestic spend increased to 31% to 40% and later it was projected that in the year 2010 the total amount of purchased good and services obtained from non-domestic sources will be between 41% to 50%. Thus the study clearly shows that the business growth was mostly dependent and was gaining popularity in term of outsourcing and also observed the increase in investment in foreign countries because of strategic factors advantage evaluated by the business. Procter & Gamble (P&G 2008) also reported that over one third of its growth occurred overseas, thus oversea collaboration with other suppliers resulted in business expansion and diversification. The reason for global sourcing would be because of strategic evaluation of factors such as superior quality, lead time length, lower cost of operations, better innovative technology, broader supply base network and wider customer

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