Balades en expertise comptable :
Global Supply Chain Issues...
Actu Droit juillet 2024
Décrypté par Jean-François Allafort, co-auteur des Fiches DCG UE12 Anglais des affaires, collection « Expert Sup », Dunod, et présenté par Ian Waddelow
#SupplyChain #Disruption #Sourcing #Manufacturing #Distribution #Retailing #Procurement #Logistics #Transportation #Protectionism #Slowdown #Stockout #LeadTime #RiskMitigation #Contingency
Global Supply Chains
Welcome to the series of DUNOD podcasts designed to help improve your English in your own time on topics related to your studies.
In recent years, global supply chains have become increasingly complex and interconnected, playing a vital role in the movement of goods and services across borders. However, the COVID-19 pandemic and other geo-political factors have exposed vulnerabilities in these supply chains, leading to disruptions and challenges that have reverberated across industries worldwide.
Global supply chains typically encompass multiple stages, including sourcing raw materials, manufacturing, distribution, and retailing, often spanning different countries and continents.
The key components of global supply chains are :
- Sourcing and Procurement : Companies source raw materials and components from suppliers located in various regions based on cost, quality, and availability considerations.
- Manufacturing and Production : Raw materials and components are transformed into finished products through manufacturing processes that may involve multiple suppliers, assembly plants, and subcontractors.
- Logistics and Transportation : Finished goods are transported across the globe using various modes of transportation, including ships, airplanes, trucks, and railways, to reach distribution centers and end customers.
Several factors have contributed to the challenges facing global supply chains.
COVID certainly disrupted supply chains worldwide causing factory closures, transportation delays, labor shortages, and fluctuations in consumer demand. Lockdown measures and travel restrictions imposed by governments further exacerbated these challenges, leading to widespread disruptions across industries.
In addition, there have been trade tensions and Protectionism. Major economies, such as the United States and China, have had increasing trade tensions, resulting in tariffs, trade barriers, and geopolitical uncertainties that disrupted supply chain flows and increased costs for businesses.
Thirdly, Just-in-Time Inventory Practices. JIT delivery is often utilized to minimize inventory holding costs and also to improve efficiency. JIT, however, leaves little room for error and can amplify the impact of disruptions, such as production delays and supply shortages.
And finally, single-sourcing and concentration of suppliers. Relying on a single source or a limited number of suppliers for critical components increases the risk of supply chain disruptions due to natural disasters, geopolitical conflicts, or supplier bankruptcies.
So what is the impact of these global supply chain issues ?
The disruptions and challenges facing global supply chains have far-reaching implications for businesses, consumers, and the global economy.
Shortages of critical components and raw materials, coupled with transportation delays and port congestion, have led to production slowdowns, stockouts, and longer lead times for goods.
And the disruptions have driven up costs for businesses due to increased transportation expenses, higher raw material prices, and additional investments in risk mitigation and contingency planning.
What strategies can be taken to address global supply chain issues ?
According to a McKinsey report published in March 2019, “global supply chains are irreversible, as are the supply-chain risks that globalization has brought with it. […] It is critical for organizations to build robust programs for managing both known and unknown supply-chain risks. Leaders should also recognize that risk management is not merely about setting up processes and governance models, but also entails shifts in culture and mind-sets. By employing these approaches, organizations increase their chances of minimizing supply-chain disruptions and crises, while capturing the full value of their supply-chain strategies”.
