According to Forbes, the global supply chain contributes 12% of gross domestic product (GDP). It has become a valuable entity in the supply chain industry worldwide. The figure shows that people tend to consume more, requiring companies to adopt a sophisticated strategy and deliver products on time.
Supply Chain 247 highlights that 30% of companies primary goal is to meet clients’ requirements and supply products effectively, reliably, quickly, and cost-effectively. The purpose is to improve the company’s overall bottom line and stand out from the competition in the supply chain industry.
Supply chain business leaders look for new ways to transform global supply chain management and adapt to growing clients’ requirements. According to SCMR, 75% of businesses focus on digital tools, software, and application to achieve effective supply chain management. Read on!
What is Global Supply Chain Management?
Global supply chain management encompasses a wide range of processes regarding a product’s lifecycle. It involves conception, creation, analysis, and distribution. It focuses on each stage of the product’s lifecycle, avoids complications and risks, and delivers products efficiently and promptly. The traditional global supply chain encompasses four phases:
- Supplier
- Manufacturer
- Retailer
- Consumers/end users
For example, Nike won the best supply chain award in 2019 for its state-of-the-art and cutting-edge global supply chain management strategies. According to Supply Chain Dive, the primary factors that led to the company’s success were artificial intelligence, machine learning algorithms, software tools based on predictive analytics, and inventory control using QR codes and RFID.
So, a company that incorporates modern technologies in global supply chain management strategies allows them to collect valuable data, better forecast customer demands, and increase the number of orders. In addition, you can achieve the desired visibility levels throughout the global supply chain network.
The Importance of Global Supply Chain Management
Most companies in the supply chain network about the significance of management on a global scale. Companies that debug supply chain management achieve numerous advantages, including lower costs, faster transactions, better lifecycle, and streamlined revenues. Let us now discuss the benefits!
Improved Performance
Global supply chain management is a sophisticated strategy that allows companies to use cutting-edge tools and software applications and track real-time data of available goods in stock.
As a result, companies can conduct demand-planning and source materials from different suppliers when needed. The purpose is to reduce delays, avoid customer dissatisfaction, and improve overall performance.
Therefore, we suggest using a tailored software application to manage supply chain operations and implement smart solutions to increase efficiency, reliability, and cost-effectiveness.
Real-Time Data
If you operate in a manufacturing company, using supply chain management is essential to achieving your goals. However, demand forecasting is daunting and time-consuming. Every company experiences the bullwhip effect, which refers to increasing and decreasing customer demands, causing severe problems.
However, global supply chain management software allows companies to access a constant stream of real-time data. You can leverage this data to forecast demand and respond to consumers’ needs. Thus, you can overcome various problems and challenges, including the bullwhip effect.
Optimal Transportation Management
According to TT News, global supply chain management requires companies to spend more money on product delivery. Researchers highlight that companies in the United States spent over $1.64 trillion on transportation services in 2018.
Another survey study conducted by EFT shows that 25% of supply chain companies consider shipping costs the most challenging complication. Therefore, we recommend using transportation management software to control transport and reduce costs.
A growing body of research evidence shows that cutting-edge transportation management software applications can reduce freight costs by 8% and help supply chain companies reduce their bills by 95%.
According to Logistics MGMT, companies that use transportation management systems or solutions can save more than 10% on cargo costs. Another study shows that transportation management solutions are a whopping $1.8 billion worldwide, allowing supply chain companies to implement suitable technologies.
So, with global supply chain management software, companies can track shipping operations in real-time, gain better control over the fleet, perform maintenance procedures, streamline fuel spending, plan routes, and achieve better communication between suppliers.
Streamlined Risk Management
Risk management is an integral part of global supply chain management. It requires companies to adopt advanced technologies to access real-time supply chain data, analysis, and insights generation. Insights can help you overcome threats, manage risks, and make informed decisions.
Likewise, access to real-time data can help you create a backup plan and run supply chain risk management or operations to foresee unprecedented/unpredictable situations, risks, complications, and disruptions that may lead to adverse effects on your company.
For example, implementing the internet of things (IoT) solutions can improve transparency in the global supply chain and control operations. Telematic devices are an excellent way for companies to mitigate risks, such as:
- Delays
- Product losses
- Compromised events
- Low quality of goods
- Transportation challenges
- Inventory management issues
Besides, you can use IoT devices to identify threats in the global supply chain management system via artificial intelligence, machine learning algorithms, hardware monitoring, cryptographic analysis, and other techniques.
Enhanced Business Transparency
Implementing cutting-edge technologies like IoT and Blockchain allow businesses to track real-time data and product identification numbers and monitor the product’s quality.
About 57% of companies say that accuracy and transparency are the most vital factors that drive value and improve uptime and flexibility without interruptions. The primary reason behind global supply chain management transparency is IoT devices with cutting-edge artificial intelligence and machine learning algorithms.
Better Cost Management
Accurate demand forecasting enables you to cut the overhead costs associated with the supply chain. When you have excess inventory, you pay more money for the storage. However, when you know the demand and access real-time data, you can reduce costs and generate more revenues.
We suggest adopting automation solutions to decrease costs. For example, if your company implements a management system tailored to your business needs, you can improve shipment speed and increase efficiency, leading to effective operations and reduced costs.
According to Easy Post, implementing supply chain management software can increase productivity by 25% and reduce costs by 30%. Automated tools contribute to efficient supply chain operations and speed up the entire process.
The reason is that advanced tools based on AI models minimize human intervention, reduce errors, and streamline processes due to accurate calculations. Therefore, a sophisticated software solution can aid your company in controlling all operations, including day-to-day activities, storing, sorting, and shipping.
Increased ROIs
Every company aims to improve its returns on investments (ROIs). However, this requires all enterprises to implement an advanced supply chain management system to make informed decisions without disruptions, manage operations and transportation issues, and better forecast demands.
In addition, technological solutions can contribute to positive cash flow. For instance, partnerships with trusted companies cause fewer disruptions, improve operations, and create more satisfied customers. It enables you to issue invoices and receive payments faster.
Digital solutions can reduce unnecessary spending, foster budget saving, and minimize the overhead experience, leading to increased ROIs. So, you can turn global supply chain management challenges into advantages if you have the correct and tailored technology solutions.
How to Streamline Global Supply Chain Management?
Global supply chain management has become more complicated because all companies want to stay competitive and streamline their business operations. The sophisticated and interconnected nature of the supply chain worldwide makes companies vulnerable to numerous risks, such as:
However, the good news is that technology solutions emerging in the global supply chain can increase visibility and make operations more agile and resilient. Research highlights new technologies, including the internet of things, artificial intelligence, machine learning, blockchain, and robotics, can reduce disruptions.
Develop Forecasting Plans
Developing accurate forecasting and emergency planning is an excellent way to get a clearer picture of your business operations and accurately respond to disruptions, including:
- Political movements
- Natural disasters
- Pandemics
- Communication issues
- Production problems
- And other complications
Business leaders in the global supply chain can revise their strategies and promote new products more accurately, faster, and reliably. For example, change your pricing strategy to adapt to demand, speed up revenue streams, and increase margins for specific products.
Prepare yourself for unprecedented events and mitigate the harmful effects, so your business can stand out from the competition and succeed. Again, modern technologies, such as IoT, blockchain, robotics, and management solutions, can make the supply chain more visible, flexible, resilient, and easy to manage.
Adopt Blockchain Technologies
Smart contracts offered by blockchain technologies can simplify supply chain processes and optimize transactions among stakeholders. It enables companies worldwide to collaborate and do business reliably, efficiently, and risk-free.
Blockchain is directly proportional to product lifecycle transparency, from the manufacturer to storage to delivery to customers’ doors. It tracks all steps involved in complex supply chain networks at global levels.
Blockchain enables sellers and buyers to monitor products’ quality and condition. While many companies find implementing blockchain into their supply chain management strategies challenging, it is worth the time and money.
Focus on Sustainable Practices
Sustainable global supply chain management efforts can help business leaders explore new opportunities. For example, you can integrate an environmentally friendly strategy into supply chain management. It is one of the core elements of supply chain networks and operations.
Adopting green initiatives can transform your company’s processes, reduce costs, utilize eco-friendly resources, and fulfill your corporate social responsibility to improve your company’s reputation.
However, you must overcome excessive energy consumption and related problems with real-time data tracking and visibility. The purpose is to decrease the overall carbon footprint and consciously use power sources.
Therefore, adopting and implementing sustainable practices lead to less waste with recyclable materials and optimized routes. Your company can stay afloat and stand out from the competition via:
- Regular evaluations
- Audit plans
- Defining and implementing sustainability
Implement Artificial Intelligence
Artificial Intelligence is the future of the business world. It has gained momentum worldwide in almost all industries, including the supply chain sector. Cutting-edge applications based on artificial intelligence offer numerous benefits.
For example, you can prevent thousands of repetitive, complicated, and complex tasks, analyze the massive volume of data automatically, and generate valuable insights with suggestions from the AI system to make informed decisions.
Final Words
Global supply chain management allows companies to create sophisticated plans and strategies regarding goods distribution and ensure everything goes smoothly without risks and complications. Innovative technologies can optimize your company’s supply chain management strategy and achieve goals. Contact us for more information.
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