Understanding the Global Supply Chain Management Process
Global supply chain management refers to the process by which goods and services are distributed through a global network of trans-national companies for the purpose of minimizing waste and maximizing profit. In essence, global supply chain operations are akin to regular supply chain operations but place its emphasis on organizations and companies that are trans-national in their focus (Christopher 2016). The most important areas of concentration for global supply chain management activities are customer orientation, competitor orientation, logistics management, operations management, supply chain management and supply chain coordination. Warehousing is known to form a critical component of all global supply chain management processes. This report discusses briefly what global supply chain operations entail, engages in a detailed discussion of the role of warehousing in the global supply chain management process and concludes that there are many factors that go into ensuring the efficiency and effectiveness of warehousing operations in the global supply chain process, with each step of the process having to be executed like clockwork to ensure smooth operations overall (Friemann and Schonsleben 2014).
The global supply chain process is one that is characterized by four main aspects or dimensions, namely, supply management, operations management, logistics and marketing. The successful and adequate management of global supply chains is something that requires compliance with all the international trade and labor regulations that have been set in place for this purpose (Coyle et al. 2016). For instance, the United Nations has established a number of guidelines that are to be followed when engaging in global supply chain activities on a large scale. There are many actors, particularly those who impose policies, who can impact various dimensions of the global supply chain management process. Non governmental organizations as well as international governmental organizations have a vital role to play in this respect as they establish as well as implement all the regulation laws that global supply chain companies need to abide by. Such regulatory policies more often than not, regulate all the social issues that tend to be impacted by a considerable extent owing to the operation or implementation of global supply chain activities, such as the environment, labor, etc (Jacobs et al. 2014). Owing to the existence of these regulatory policies, companies are compelled to abide by important rules and guidelines that at times end up impacting the profit levels of these companies (Diabat and Al-Salem 2015). Managing and operating global supply chains is also a process that is associated with a number of risks. Such risks can be divided into two main categories, namely, supply side risks and demand side risks. The demand side risks are the risks that are associated with regard to the availability of specific products in the global supply chain process while the supply side risks refers to the unavailability or dearth of raw materials that are needed for global supply chain activities to be carried out. Based on the specific nature of the global supply chain, a manager can decide to go ahead and combat these risks or to minimize these risks as much as it is possible for him to do so. Successful management of the global supply chain management process is one that takes place with the right framework of concentration is adopted and implementation, when international regulations and rules pertaining to the global supply chain management process are adhered to, and when the risks that are associated with minimizing waste and maximizing profit are those that are adequately recognized as well as handled (Heckmann et al. 2015).
Efficiency and Effectiveness of Warehousing in the Global Supply Chain Process
Warehousing activities are those that have a very important role to play as in the entire supply chain process. The continuing globalization challenges or changes that are taking place in areas such as environmental sustainability, reverse logistics, information technology as well as in the overall process of supply chain integration are gradually evolving all the strategies, the responsibilities and the roles of warehouses (Mangan et al. 2016). The term distribution center is one that may be regarded to be quite appropriate when it comes to representing the wide range of activities that are seen to take place in all the modern day warehouses that progress far beyond just meeting the basic needs and requirements of customers to the provision of various types of value added services.
The location of the warehouse in the global supply chain process is one that is determined, not only on the basis of transportation costs, but also supply point locations, volumes of products that are moved to as well as from all these supply points as well as customers, service levels required, product characteristics and transportation rates (Manners-Bell 2017). Local conditions, such as the cost of labor, government polices, infrastructure and transportation also have an important role to play when it comes to determining the location of a warehouse in the global supply chain process, in addition to factors such as government policies and IT or communications infrastructure.
The product that is being distributed as a part of the global supply chain process, the manner in which this product is received, the nature as well as the type of the customer orders that are being placed, the service levels as well as the transportation mode, are all factors that have a very vital say when it comes to setting the design and the operations of a warehouse or distribution center (Monczska et al. 2015). The product characteristics include shelf life, dimensions and weight, packaging, hazardous material requirements, control requirements and temperature. The way in which a particular product is received, known to be critical for the efficiency of inbound operations as well as outbound operations.
For the purpose of enhancing efficiency when it comes to the inbound operations that form an integral part of the global warehousing process, it is necessary to receive materials in immediately storable conveyances, such as in a box, case or in a pallet. The volumes as well as the types of orders which are processed and the total number of all the stock keeping units in the warehouse are some of the important considerations that have to be made when it comes to things such as equipment selection, business process requirement and determining layout (Mota et al. 2015). When it comes to storage equipment selection in particular, this is something that needs to be matched with the product characteristics and volume, as well as additional unique requirements that need to be looked into such as lot control, temperature control and security (Ravindran and Warsing 2016).
Understanding the Importance of Warehouse Location in the Global Supply Chain Process
Information tends to be a critical driver when it comes to successful warehousing operations in the global supply chain process. The short term forecasts always provide the information that is needed for determining space and labor requirements for short term operations (Snyder et al. 2016). The long term forecasts are those that are used for the purpose of capacity planning, such as, equipment requirements, workforce and the size of the distribution center or warehouse. Information technology particularly, is something that is quite critical for achieving a high degree of efficiency in global warehousing operations. There are warehouse management systems that are put in place as a part of the global supply chain management process that direct where exactly it is that all the products are to be stored, provide all necessary functionalities that go into optimizing and completing the receiving and storing of products as well as shipment operations. It is important to note in this respect that additional functionalities may at times, permit the use of bar coding and hand held devices for optimizing efficiency as well as for the reduction of errors (Vanov et al. 2017). The majority of the global warehouse management systems are those that include all the inventory management functionalities that permit warehouses or distribution centers to obtain the real time information which is needed for assessing the inventory status of all items which are stored and kept away in the warehouse (Wallace et al. 2018).
Most of the objectives of the warehousing system in the global supply chain process, are those that include the provision of the right products at the right times and at all the right places in a damage free way and at the most competitive costs (Waters and Rinsler 2014). Some of the well known global warehousing performance measures include space utilization, damage, accuracy, inventory, service cost, and the handling of productivity. The process of handling productivity is something that is measured on the basis of lines or units that are picked on an hourly basis, or based on the total handling of costs per unit. On the other hand, space utilization in the global warehouse management system, is one that is evaluated based on the percentage of the total amount of space that is made available for storage, the percentage of the storage space that can actually be used for the purpose of storage, as well as the storage costs per product unit.
Design and Operations of Warehousing in the Global Supply Chain
Accuracy involves measuring locations as well as recording accuracy, the percentage of all the orders that have been picked correctly as well as the percentage of all the items that have been picked correctly (Vanov et al. 2017). The damage measurements are those that include percentage of all the items which are picked that remain undamaged at the time of being received by customers as well as the percentage of all the orders that are picked up without any damage being made to the quality of the merchandize that is being handled. The service measures in particular are inclusive of fill rates, which in turn are based on the numbers of all the orders that have been filled out with accuracy.
Cycle time is a critical measure that goes a long way in understanding the efficiency of warehousing systems in the global supply chain process. Cycle time determines both service as well as efficiency (Wisner et al. 2014). The cycle time from dock to stock is an important measure of the time that is needed in order to make materials available followed by the receipt of such materials. Order cycle time is something that measures the time that elapses from the receipt of an order right until the shipment of the order. The order cycle time of warehousing operations in the global supply chain process is also one that can be inclusive of transportation, in order to measure the total amount of time that has elapsed from the product being dispatched to the time at which the product is received by the customer. Inventory and cost performance measures are those that are inclusive of distribution center costs as percentage of sales, inventory turnover and the total distribution center costs per the units handled.
Conclusion
Thus, there are many important factors that go into the effective functioning and efficiency of warehousing operations in the global supply chain process. The global supply chain management process is quite an extensive and elaborate one, and there are plenty of rules and regulations to be followed, and risks to be undertaken or minimized if the global supply chain activities are to be pulled off with success. Warehouses or distribution centers have a vital role to play in this global supply chain process and the different dimensions of warehouse operations are all interconnected with one another to make sure that global supply chain activities are pulled off efficiently without causing any inconvenience to the customers. The efficiency and effectiveness of warehousing operations in global supply chain activities is something that needs to be evaluated and monitored on a regular basis, especially as far as accuracy is concerned. The time that is allowed to elapse between the production and distribution of a product to the time at which it is received by the customer should be kept as minimum as possible so that customers receive their goods and services on time, and the profit levels are high for those who engage in global supply chain activities in the first place.
References
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