GLOBAL SUPPLY CHAINS

Behavior of Multinational Enterprises and Global Supply Chains



Behavior of multinational enterprises and Global Supply Chains

Global Chain Management (GCM)

The goal of supply chain management is improving or maximizing an organizations effectiveness, timeliness, cycle-time and quality (Emberson, Storey, Godsell and Harrison 2006, p. 754). These overarching measures when managed correctly contribute to a corporation's competitive advantage. Each corporation's supply chain must be responsive and efficient as indicated by these measures (Emberson, Storey, Godsell and Harrison 2006, p. 754). Following are some of the issues and problems with the concept of supply chain management.

An organization must determine what information it wants to share with its partners throughout the stages of the global supply chain. Information sharing is a difficult decision since most organizations do not want their partners to gain insight into strategic or competitive information. However, they do need to share information so they can coordinate supply chain activities such as providing suppliers with inventory order levels to meet production forecasts. Building trusting relationships is one way to begin to understand how much information supply chain partners require.

Global supply chain management not only requires investment of money but it also requires an enormous investment of time and resources which has become a basic hurdle in the implementation of modern supply chain. To make supply chain more effective and efficient, firms are moving towards outsourcing. This outsourcing not only includes using services of logistics for the purpose of inbound and outbound logistics but it also includes packaging, labeling and procurement services. This also creates problems for the firm as outsourcing cannot be achieved without the sharing of information with the vendors. This sharing of information may not be appropriate for a firm as this information can be used by the business rivals for negative propaganda or it can result in loss of market share as competitors can gain information about the customers (Kugli, 1998).

In today's rapid and dynamically changing world, ensuring regular supplies to meet consistent fluctuations in consumer demands has been defined as one of the most crucial aspects of any business if it wants to be successful enough to compete in terms of quality, price and competitors. For companies involved in the manufacturing sector GCM is the most important business department and in fact has been termed as a necessity to regulate the supply chain aspects of the business smoothly and efficiently. Nowadays business need not only lower costs in order to stay ahead in the ocean of cut throat competition, they also need to develop uniquely devised built-in competitive edges in order to be successful. Today only those businesses are successful that makes competitive policies in timely manner in accordance with the highly volatile consumer markets.

Globalization, MNEs and FDI

UK organizations are increasingly looking to trade outside national boundaries. Indeed, according to the most recent figures from HM Revenue and Customs, international business continues to grow: European imports showed an almost 15 per cent increase compared with the same month in 2009, and a ...