Inherently filled with opportunities for catastrophic failure, the global supply chain poses exponentially huge threats to companies, consumers, and trade compliance practices. Many different solutions to ensuring optimum trade across the international scope have been implanted and shown great success in reducing this risk. However, the current state of the global supply chain remains fragile. Unfortunately, this means a business operating alone to manage global trade compliance will likely fail, especially if the business has finite resources. Few startups can garner the support required to scale globally without the expertise and finesse of a Supply Chain Manager. Fortunately, a Supply Chain Management (SCM) provider can effectively manage logistics with “Six Stipulations For Successful Supply Chain Strategies,” or SSSSCS.
The world of information technology has exceeded the once-thought capacity for human-silicone interactions and dependence. The implementation of thousands, if not hundreds of thousands, of differing SCM platforms caused extreme variations and inabilities to maintain optimum efficiency across the supply chain. For example, a system in Country A may be unable to convert currency to platform specifications in Country B. As a result, the movement towards globalization of the supply chain and enhanced logistics’ practices slows down, which stifles a business.
SCM providers have a vast network of business-to-business (B2B) partnerships, and these partnerships must be able to communicate effectively, efficiently, and without corruption to maintain SCM expectations. Therefore, the entire platform across an SCM network becomes streamlined through integration. Multiple systems are updated to ensure optimum communication with other aspects of the supply chain, and some systems are completely replaced with those of the SCM provider. Ultimately, this integration across multi-national platforms and systems enables rapid scalability without sacrificing additional capital for the replacement, updating, and cost-of-staff-training of implementation of new platforms.
Since inefficiencies within the global supply chain may cause widespread problems, the identification of problems from onset is of extreme importance. However, no business has the time to devote to monitoring all processes for possible problems. Furthermore, some problems are not readily visible. For example, machinery may have an internal problem that only becomes apparent after an analysis of the day’s rate-of-production. Employing a third-party logistics (3PL) provider for these processes enables the use of advanced monitoring techniques, which locate problems as they arise and identifies solutions to such problems.
Business owners often fear the implications of compliance violations, and they have good reason to. A single violation could easily skyrocket past the company’s quarterly budget for all processes if previous fines by the US Department of Justice for other companies are any indicator of possible penalties. This is one of the most important benefits of 3PL SCM providers; they take care of the trade compliance monitoring, reporting, and damage control by assuming responsibility for their processes.
US Gross Domestic Product (GDP) has reached all-time highs in recent years, and the only aspect of manufacturing holding it from reclaiming the title today remains reductions in consumer spending. Unfortunately, this reduction occurs as fewer workers are available to fill the needs of production. As a result, the manufacturers have a smaller amount of product to work with, which brings the cost of production up. Managing logistics and ensuring trade compliance relies heavily on resource management. Compliance laws in the US dictate manufacturers must report mineral use, and technology use in manufacturing has resulted in greater automation of once human-controlled activities. Essentially, human workers are a resource for a respective company. Effective management of production requires management of all resources, especially mineral use, ecological impact, and worker availability. Even when considering the impact of automation, human-input may still be required to make repairs to malfunctioning equipment.
Disasters, they may come as a result of Mother Nature or man’s attempt at controlling the environment and other people. Wars, weather-issues, political factors, and public perception can be classified as disasters. Since disasters directly correlate to the timely, successful manufacturing and order fulfillment of goods, an outside entity can often identify the easiest ways to overcome such disasters. Additionally, logistics and SCM management takes the brunt of the disasters’ effects, which safeguards the respective businesses.
Similar to resource management, agility in transportation deals with the ability to transition between different modes of transportation to meet the demands of the company, consumers, and society. For example, rising fuel costs of air transportation could warrant transportation by train when available. This may be applied to any form of transportation. The cheaper pathway brings in savings, but it must be compared against the impact of order fulfillment. A longer time may anger consumers, and this information needs to be taken into account. Again, SCM management can make the determination of which method of transportation, or a combination varying methods, should be employed.
As more businesses begin and grow, the global supply chain grows concurrently. Rather than trying to take on the world alone, a business should consider how using SCM providers will impact logistics processes and trade compliance for maximum benefit.