How Does Globalization Affect Supply Chain Operations?
Over the past few decades, we’ve seen a trend towards globalization across a variety of industries. Instead of being limited to products from local retailers, both individual consumers and businesses have the opportunity to buy from companies around the world.
This has resulted in huge benefits for both retailers and consumers. Many organizations now use digital marketing to reach a global audience and bring in customers from around the world, resulting in faster business growth. Today’s consumers can also shop from brands around the world, which gives them more options and results in healthy competition among suppliers.
Ultimately, globalization has been a positive change for businesses around the world. However, it also presents some unique challenges when it comes to supply chain operations. Instead of shipping within a specific country or region, organizations now need to develop a supply chain strategy for international shipments.
At Unilog, we help our clients develop an effective international supply chain strategy. Finding the right manufacturers and shipping partners is tricky, especially when the global economy is constantly shifting. We work directly with our clients to pinpoint supply chain challenges and create custom solutions using our proprietary supply chain management technology. Here are some of the ways that globalization has affected supply chain management.
More Available Suppliers
With a global market, you’re not just limited to suppliers in a specific region. Globalization has made it easier for companies of all sizes to connect with global suppliers. This means that organizations now have access to a wider range of materials, which supports greater innovation. Competition among suppliers also helps keep prices reasonable in many markets.
However, access to a wider range of suppliers also presents some unique challenges that were not present in the past. For example, organizations now need to monitor and respond to political and environmental changes around the world to keep their supply chains running smoothly. It’s also more difficult to monitor suppliers located far away from your operating base. This means that suppliers are more likely to get away with environmental or human rights violations in their practices.
Broader Customer Base
Now that it’s possible to ship all over the world, your customer base is no longer limited to your immediate area. Not only does this present the potential for more sales, but it also gives you the opportunity to expand the scope of your business in a broader sense. Social media and other digital marketing tools have made it easier to reach your targeted demographic, no matter where they are in the world.
With a wider customer base, you’ll also need to readjust your shipping strategy. Today’s consumers have high expectations for their products, even if they’re being shipped internationally. On top of that, different cultures have different preferences and expectations about the products they purchase, so you may need to make adjustments for different geographic markets.
To keep your international supply chain running smoothly, you may need to adjust your warehouse locations or work with different shipping partners to ensure that orders arrive on time. At Unilog, we’ve created the Logivice software program to help our clients stay on top of their supply chain, from the initial supplier shipments to warehouses all the way to the final delivery. With a large international shipping network, you’ll need to leverage technology in order to keep up.
Globalization has made it easier for entrepreneurs to start businesses, which means more competition across a variety of industries. This can be a big challenge for established businesses who are used to having a large market share – now, you’ll be competing with a variety of smaller players from around the globe. Although this level of competition can be stressful, it is ultimately a good thing for consumers. Competition encourages businesses to be constantly working to improve their products. This ultimately results in more innovation and better customer satisfaction.
Inconsistent Data Access
As you expand your customer base, collecting relevant supply chain data becomes more difficult. It also becomes more difficult to collect data about your customers’ demographics and preferences. This is another reason why technology is a crucial part of growing your supply chain. Using a software program like Logivice makes it easier to collect the data you need so you can improve your shipments in the future.
When expanding your business to new countries, you’ll need to learn about the legalities of shipping to that country. Each country has its own laws regarding what items you can and cannot ship there. Taxes, tariffs, and customs regulations will also vary by country as well. To avoid legal complications, which are expensive to fix, you’ll need to take the time to learn about the laws in each new shipping destination and adjust your strategy accordingly.
Because of this, processing international shipments tends to take much longer than processing domestic shipments. When adjusting your shipping strategy to include new countries, you’ll need to be sure to keep this in mind.
New Shipping Routes
Expanding your product availability often means you’ll need to develop new shipping routes or re-optimize your existing ones. Strategically placed warehouses will help you avoid shipping delays and can also help you keep supply chain costs down.
Working with a supply chain partner like Unilog makes managing your supply chain so much easier. As supply chain experts, we provide support in a variety of areas, from optimizing your shipping routes to placing warehouses to choosing manufacturers. We can also help you process returns from around the world. Contact us today to learn more about our supply chain services.