International Logistics, Part 1: Supply Chain Management

Supply chain management encompasses the planning and mangement of all activities involved in sourcing and procurement, conversion, and logistics. It also includes coordination and collaboration with channel partners, which can be suppliers, intermediaries, third party serivice providers, and customers. In essence, supply chain management integrates supply and demand management within and across companies.

Advances in information technology have been crucial to progress in supply chain management. Consider the example of Gestamp (Spain’s leading supplier of metal components for car manufacturers), which used electronic data interchange technology to many reports increased manufacturing productivity, reduced investment needs, increased efficiency of the billing process, and led to a lower rate of logistic errors across the supply process after implementing a supply chain system. Globalization has opened up supplier’s ability to provide satisfying goods and services will play the most critical role in securing long-term contracts. In addition, the physical delivery of goods often can be old-fashioned and slow. Nevertheless, the use of such strategic tools will be crucial for international managers to develop and maintain key competitive advantages. An overview of the international supply chain is shown below:

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