Global Supply Chain - What Benefits Does It Bring?

A distributed supply chain helps improve production and reduce costs across different territories. However, the COVID-19 pandemic exposed weaknesses that companies are still trying to address. It's essential to have a software system that leverages management with information and flexibility.

Supply chain management is the process of transforming raw materials into finished products available to consumers. It is a vast process that includes design, sourcing, production, warehousing, shipping, and distribution, to name a few instances of a standard supply chain.

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When the organization of these activities transcends the borders of a territory, we are faced with a global supply chain, which includes foreign direct investment operations by multinational companies, both in wholly owned subsidiaries and in joint ventures.

The significance of the supply chain

The goal of global supply chain management is to improve key areas. These areas include efficiency, costs, quality, productivity, and customer satisfaction. All of this is achieved through the use of strategic insights and information. It begins with understanding market trends and consumer feedback and then improves management operations, which include point of origin, sourcing, innovation, the production process and last-mile logistics, product delivery, and customer service.

Among the processes involved in a global supply chain, the following stand out:

1. Anticipating product demand and coordinating the links in the supply chain for the manufacturing and delivery of a product or service. It also includes planning material needs, production, sales, and operations, among other phases.
2. Managing a product from its conception, engineering, and design to manufacturing, service, and end-of-life or recycling. Today, we have software systems that unify these stages and facilitate collaboration across the entire company and its business partners.
3. Acquiring materials, goods, and services to meet business needs, ensuring their quality, fair price, and value. A major challenge is anticipating precise order volumes, as both shortages and surpluses can be detrimental to the business.
4. Transporting and storing merchandise from the beginning of the supply chain with raw materials and manufacturing to the delivery of finished products to stores or customers.
5. Monitoring, documenting, and controlling the production process. Current systems use data collected with Artificial Intelligence (AI) and the Industrial Internet of Things (IoT) to optimize and automate manufacturing processes. Companies can use on-demand 3D printing to eliminate shortages and surpluses.
6. Manage physical assets distributed across different territories, from sales offices and factories to delivery fleets. Remote technology applied to production, such as IoT sensors and machine-to-machine connectivity, is transforming efficiency, uptime, safety, and predictive and preventive maintenance, regardless of the asset location.
7. Adapt the supply chain to the legislation of different territories and ensure the latest regulatory and compliance practices are applied.

Por su complejidad y extensión territorial, la gestión de una cadena de suministro global necesita apalancarse en un sistema poderoso y flexible, que se adapte a las necesidades y capacidades de la organización. Actualmente el mercado cuenta con varias alternativas recomendables. Entre ellas, SAP Business One permite integrar todos los procesos y operaciones de la cadena, para lograr una gestión adecuada, desde el principio hasta el final.

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In this way, the system improves order tracking to ensure their timely arrival and subsequent fulfillment of the customer's order. It also enables automation in the sales order generation process and strengthens production planning according to pre-established inventory levels.

Supply chain: examples and challenges a company faces

The 2020 crisis has driven the digitalization of end-to-end management processes due to the increased interest in advanced analytics. Most companies spent more than expected on digital procurement technologies.

These technologies include performance management systems and planning tools. They were used both for specific aspects such as logistics and for general planning systems.

Companies are taking firm action to fully adjust supply chain management based on the vulnerabilities identified during the 2020 global health emergency. Modernizing technology and developing new capabilities are two priority objectives in the strategies the function is outlining to strengthen organizations against new shocks and disruptions.