Study reflects the various opportunities and challenges in supply chain management including Containers & Logistics

Home, - Opportunities and Challenges in Supply chain management


Ø  Globalization is changing the way we do business and impacting supply chain Operations.


3 Benefits of Globalization:

ü  Globalization will provide ample opportunities for companies to expand their business overseas. Globalization will provide excellent market demand for products, for which there is no market in the local region.  Increased access to the buyers will assure profitable prices for the products. Businesses can sustain with increased access to the international markets.

ü  Globalization will mitigate the constraints of the skills unavailability.  Globalization will let the organizations explore outsourcing and this inturn will work on to provide cost effective labour availability across the borders. Outsourcing will reduce the overall prices of the services as well the quality also improves(Dudley,2017).

ü  Globalization will provide opportunities particularly for the third world countries to improve their economies and enable them to sustain in the global competition.

3 Challenges of globalization:

ü  There are problems of cultural competency, racial and cultural complications.

ü  Developing new corporate and brand images from scratch in the new region is a big challenge for the organizations expanding in globalization.

ü  Further globalization will create new challenges of legal and regulatory complications.

Ø  Increased competition in the global market has created lot of challenges along with opportunities. These developments invariably are insisting organizations to create their own risk planning and management scenarios. In such scenarios, it is very much required for the organization to do risk management at each and every crucial juncture.

ü  Product launches need to be evaluated for the possible competitive edge the organization can have with the proposed new products. Further it is also required for the organization to evaluate the risk of product failure due to market competition, availability of the cost effective products and products with better features etc (Khajavi, Partanen, Holmström,  & Tuomi, 2015).

ü  Global sourcing is risky considering political and economic conditions of the source country. They are very uncertain and there is every chance for the sourcing country may able to fulfil the contractual obligations and such cases, the business operations need to be sustained by enabling alternative strategies.

ü  Credit availability, there can be variety of reasons due to which the organizations may able to get the required credit in time, in such occasions it may be essential for the organizations to seek alternative credit channels for sustaining the business operations. Typical channels like sourcing from local financial organizations and syndicates etc will make up typical credit availing channels.

ü  Intellectual property, there are two risks with addressing intellectual properties. The first is that breaching the IP rights of some other organizations and facing legal complications and second is the risk of other organizations stealing the trademarks and other intellectual properties of the organization. Risk management include taking up registration procedures for ensuring security of the own organization’s Intellectual property and ensuring either intentional or unintentionally not breaching the IP rights of the other organizations as well.

Ø  Implications of good quality and Reliability

ü  Good quality and reliability of the product will ensure that the customers will get the required value for the money investment and they can derive the necessary satisfaction from purchasing the products(Chang,2016).

ü  Reverse logistics will ensure the trust and reliance of the customer in the organization; the faith and reliance in the organizational products will improve the market share of the organization and also will assure better revenues to the company.

ü  Costs of the company directly depend on the market demands. If the product possesses superior quality and reliability, obviously there can be good demand to the product and it will assure optimum costs to the products.

ü  Operations management do depend on the quality and reliability commitment of the company. When the company is committed to the quality and reliability aspects, there is every chance for the company to ensure effective operations management. All operations management will get streamlined and maximum productive operational management can be assured in.

Ø  Technology for improving the supply chain management of the organization:

ü  Technology will enable real time coordination with the vendors and the suppliers. This will ensure purchase at cost effective prices. Further auto replenishment of the stocks and taking advantage of technology to mitigate excess slack times in replenishment will make sure that the supply chain management operates cost effectively.

ü  Also, regional barriers of technology enabled supply chain management can be mitigated with technology enabled supply chain management process. Organizations can seek products from anywhere in the world and best raw materials can be obtained from anywhere as per the specific organizational requirements.

Ø  Containers, Logistics and Environmental impacts

Trade imbalance

When the load flow is not uniform, it results in trade imbalances. For example there is more and more load flow from south East Asian region to the Europe and American regions. On return there is no much of the load that containers do carry and hence about half the life of the containers is simply going idle. This is a serious trade imbalance(Fredendall, & Hill, 2016).

Challenges with empty containers

ü  They do pile up excessively in the harbours and will accumulate unnecessary storage charges to the shipping lines, which is unproductive.

ü  Further when there is no business, obviously the investment in the containers will not be yielding good results and will go waste (Soysal & Bloemhof-Ruward, 2017).

Direct move Vs moving back to the terminal

ü  Direct moving involves one company directly sending container to the second party without involvement of the third party. This can be cost effective and ease in operation too.

ü  This process will assure more effective prices and also utility of the container can be improved as well.

SCM and environmental impact:

ü  Supply chain management when effectively managed will enable all the participating companies strictly adhere to the better environmental practices. When supply chain management policies are prepared only to deal with the suppliers with green initiatives, it will improve better environment (Dubey, Gunasekaran, Papadopoulos, Childe, Shibin, & Wamba, 2017).

ü  When better SCM practices are enforced, there will be overall reduction in GHG, toxic wastages, environmental abuse reduction(waste minimization, judicious usage of fossil fuels avoiding deforestation) etc.

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