Global Supply Chain Management

Essay by zizo980A-, July 2009

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The supply chain is a concept resulting from multiple independent entities that affect each other. It is a system made up of many separate units linked together by the process of buying and selling pieces and services that will produce a final product. It is the alignment of firms that bring products or services to market. These entities may be independent companies. The chain can also be within a single firm (Long, 2003).

The supply chain consists of all stages involved in fulfilling a customer request. It is a network of facilities and distribution options that performs the function of acquiring materials, transformation of these materials into finished products, and the distribution of these finished products to customers.

With these definitions, the supply chain management is the integration of key business processes from end user through original supplier that provides products, services, and information. It is the manner in which the separate units are integrated to promote good organization.

It is the systemic, strategic bringing together of the business functions and the tactics within a particular company within the supply chain. This is for improving the long-term performance of the individual companies and the supply chain as well.

Supply chain management is important because it can increase the value of the whole production process for all the companies involved in the chain. This creates superior customer value (Hugos, 2006).

Because of the increase in globalization efforts and offshore sourcing, global supply chain management is a vital aspect for businesses. The factors behind this management are reducing the costs of procurement and decreasing the risks related to purchasing. Global supply chain management involves a company's worldwide or global interests and suppliers.

The global supply chain recognizes the necessity to supply markets in national markets, often using overseas production or contractors. A...