Supply Chain

Background Information

In recent years, a combination of world events, the global economic crisis and rapid advances in technology have wrought radical changes in international trade. Few global companies today do business in the same way or in the same places as they did even a decade ago [1]. They are extending their reach into new markets and seeking to thrive in developed economies by operating more effectively and efficiently. These developments are having profound effects on global supply chains. This has changed how and where materials and products are sourced, manufactured, distributed and sold. Supply Chain Management (SCM) is defined as the management of an interconnected or interlinked network, channel and node businesses involved in the provision of product and service packages required by the end customers in that supply chain. SCM includes the development of supply chain strategies, planning, and implementation. SCM spans the movement and storage of raw materials, work-in-process inventory, and finished goods from point of origin to point of consumption. It is also defined as the "design, planning, execution, control, and monitoring of supply chain activities with the objective of creating net value, building a competitive infrastructure, leveraging worldwide logistics, synchronizing supply with demand and measuring performance globally.

Trade barriers collectively and individually impact the effectiveness of a supply chain. However, reducing these trade barriers, such as customs clearance delays, lack of standardized procedures, poor infrastructure, and import tariff will not be easy to achieve. However, by recognizing that we are now a global market and focusing on the “whole of the supply chain”, we can collectively create a more stable global economy. A study by World Economic Forum (2013) indicates that if all countries reduce the supply chain barriers half way to global best practice, global GDP could increase by 4.7 % and world trade by...