Let's deal with some misconceptions about globalization right up front. Globalization is not something that's coming, something we need to get ready for. It's here. In fact, globalization has been a reality of supply chain life for several years, even decades for some companies. So, if you're not involved in a global supply chain now, you are behind. Or, maybe, you don't fully understand how far your supply chain really reaches.
In any case, the phenomenon of globalization is affecting many dimensions of supply chain planning and operations. Let's talk about a few:
Today, a company and/or its LSP(s) must know more about all modes and how they can best fit together. In the global supply chain, there's every chance that most (if not all) modes will be involved, to one degree or another.
Manufactured goods must get from the factory to an airport or seaport, then move by air or sea. Even at the earliest stage, managers have to determine how to load containers. That involves decisions on how much downstream distribution preparation to make and how much value-adding to perform.
Upon the goods' arrival, there are more decisions to be made. Should containers move on to distribution locations by rail? By truck? Or should goods be transloaded into trucks for DC destinations, retail store delivery, or other disposition?
It was one thing to manage international shipments back when they were an occasional event. It's quite another now that they're seen as just another part of the everyday routine and are expected to unfold with the clockwork precision we've come to expect from today's synchronized supply chains.
… and that's just the beginning
Well, there's more. The integration of manufacturing into a quick-response cohesive supply chain model is a much tougher challenge when the supply chain is thousands of miles long and order fulfillment cycles are measured in weeks, instead of hours or days.
Warehousing—especially receiving— feels some impact, as well. Unloading containers is often different from handling tractor-trailers. Order quantities tend to be greater than with replenishment from domestic sources. And increased inventories can stress physical capacities, requiring a new level of planning—and flexible access to storage and operating space.
Information systems in the globalized supply chain face greater demands for synchronization and interface across the chain than their domestic counterparts do. And, of course, the requirement for visibility throughout the chain becomes both intense and vital.
When good systems go bad …
Recent catastrophes and recalls in the incredibly globalized toy industry illustrate the vulnerability and fragility of global supply chains. How to replace— quickly—faulty stocks? How to assure product quality from a distance of several thousand miles? How to instill consistent values and ethics in partners of partners, again at a distance? How to repair reputations damaged—possibly destroyed—by the actions (or inactions) of global supply chain partners?
Despite these added complications, customers have not lowered their expectations. They still expect good service in a timely manner. In fact, their demands continue to rise. And with competitive threats looming from all parts of the globe, we've got to execute a significantly more complicated dance just to stay even.
Welcome to the world we are already in.