In today's world, people around the globe are connected. Sending a package from one continent to another, let's say Australia to Africa, is not treated as a big deal because it is as easy as it gets. This is possible due to a large network around the globe that facilitates the supply of items and services. These networks are called global supply chains. Shipping container transport and moving packages using planes are examples of how this network functions.
How do Supply Chains work?
Supply Chains are mainly made up of four units. These are products, facilities, vehicles and routes. The four points are interconnected to each other and are influenced by each other, and these influences are the driving force of supply chain processes. Simulations are also run using the data of these four points.
All this is done to ensure that the customer or client can view whatever is available in stock and choose accordingly. The items in stock can also be influenced by what the customer/client is looking for or has looked for in the past. This is done by adequately managing the supply chain. There are mainly two steps to this - management and execution. Most teams are split up based on this function. Both are vital and are interdependent. This means that without proper management, implementation isn't possible and vice versa.
Why use Global Supply Chains?
With the advancement of technology, customers have gotten used to getting the products delivered within short durations of time without damage and at the lowest prices even though the distance for delivery might be a lot. This forces companies these days to focus on optimising their supply chains to deliver the promised results. The management should be on point because if the products aren't made in time, the customers will be dissatisfied, and if there are more products than needed, more money would have to be spent on storing them.
Supply chains take care of all these problems. Proper management allows the usage of cost-cutting methods. These include manufacturing of products according to demand and cutting the cost of production using technology. Supply chains also help in quality management by making the standards clear in operational strategies. Outsourcing can also be done with the help of global supply chains, which again reduce the company's operating costs. Bringing out a global market also means an increase in competition. This will result in many favourable outcomes like competitive pricing and the introduction of new products and services.
The Role of Transportation
In all of the processes in a global supply chain, none are as influential as transportation. Any hold up in transportation can cause a lot of problems. This process ensures that all the shipments reach their destinations; everything from raw materials required at the production facility to the finished product getting delivered to the customer. Using the optimum mode of transport depending on the situation is crucial for transportation to be efficient. Different methods of transport include:
Shipping Containers - Shipping container transport is one of the most common sights seen in global transportation. These containers can be moved between different vehicles and are highly efficient.
Trucks and Rail - These are the modes that work harder than most others. Trucks and rail combined can reach almost everywhere and can operate cost-effectively. Even though trucks are preferred for moving goods, trains are the second-best option after them.
Aircraft - Cargo aircraft are used to move air freight. They are very reliable and are one of the fastest means of transport available—the only problem is that they are expensive.
Global supply chains are essential in today's market. They are the main factor that helped transform the market into the way it is now: operating without delay and maximum efficiency.