Managing the supply chain has become the key to successful operations management

Question

Managing the supply chain has become the key to successful operations management. The original reason was economics. Saving $1 in the supply chain is equivalent to an increase of revenue between $1.2 and $2, and the revenue increase is harder to achieve. Next the supply chains became global for greater economic advantage, with lower cost sourcing than ever before.

However, the global supply chain increased every aspect of risk associated with a supply chain. Some years ago my wife wanted to get a Volvo, but there were no cars in the dealerships. The ship from Sweden sank in the Atlantic. Last year the tsunami in Japan caused major disruptions in the electronics and computer manufacturing industries, and not only in Japan but globally. To force a priority in supply, Apple executives flew to Japan with many millions of USD in cash and literally bought the production before it happened. Even now the uncertainty of the Euro is a hazard for American companies. American products are now very expensive in Europe and many US businesses have had contracts cancelled by European partners who are short of cash and are unable to borrow. Even hiring by US businesses has been negatively impacted by the Eurozone crisis.

Discuss some of the possible solutions. The global supply chain is here to stay and there is no withdrawal from the global economy. Some might say rebuild Europe like the Marshall Plan did. But these are independent countries and not the ruins of post World War II Europe. Each one has to want whatever another country can do. And what of China and India? President Sarkozy wanted India to bail out France. As for China, they own much of the debt of both USA and Europe.

Explanation / Answer

Global Supply chain still has many flaws due to over dependency of national wise economic situation. Forecasting models has to be strengthened and trust between economies I of nation has to be built up to make a mutual agreement on all trade related activities. Goods scarcity can be resolved t an extent through reducing the effect of Bullwhip. Sharing resources for production and sharing technology and outsourcing features reduces the overall supply chain cost. Flexible trading agreement and mutual bonding enables more capability for every nation and they could focus on their core competencies.

Te following steps can actually enhance the supply chain field in global economy

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