The Supply Chaining of Technological Innovations - Term Paper Example

Effects of Globalization on Business Marketing Introduction Globalization is a phenomenon that is permeating all corners of the globe. It has made the world smaller and more accessible to most people everywhere and anywhere. The introduction of the World Wide Web and the internet has helped this phenomenon grow even bigger and more encompassing. What used to be a plane ride away, crossing thousands of miles, has now become just a mouse click away. The business world has been the industry most affected by globalization. Business and marketing transactions have now been made easier and cheaper because of globalization. The world has also become more permissive to the globalization of products and such globalization has become manifest in almost all the products we use in our daily lives, from our cars to our foods, and our office supplies. This paper shall discuss how my preferred career – business marketing – has been affected by globalization. More specifically, it shall discuss how the supply end of the market has been affected by globalization. This paper shall then specifically discuss supply chaining and how its practice has been affected by globalization. Discussion Globalization has affected business marketing in terms of how supplies are marketed, used and acquired. In the practice known as supply-chaining, Friedman discusses how globalization has made the world flat. He discusses that supply chaining is a “method of collaborating horizontally – among suppliers, retailers, and customers – to create value” (Friedman, p. 152). He explains how supply chaining has been enabled by the flattening of the world and how it has easily been carried out by the fact that the world is flat. He also cites the example of Wal-Mart, and how the world’s biggest retail company which practically makes “nothing,” has managed to become a very efficient supply chain. In the Christmas season, Hewlett-Packard usually sells about 400,000 computers daily in these Wal-Mart stores (Friedman, p. 152). And supply chaining has become very much beneficial for buyers because they can buy products at the best quality and at low cost; and retailers can afford to sell their products at the lowest possible cost because of cheaper production costs (Friedman, pp. 155-158). All in all, most people – from the suppliers to the end consumers – benefit from the global supply chain. In Sun Microsystems, Inc., they have managed to introduce the technological innovation known as ‘one-touch supply chain’ where the company was able to restructure the manufacturing process. The ‘one-touch supply chain’ is a software which “spans all aspects of the fulfillment supply chain, from order entry to customer acceptance” (McCabe, p. 1). The configuration process is automated, making this technology an even more innovative tool. Since supply chaining has been introduced into the market as a viable way for manufacturers, suppliers, and businessmen to interact with each other, technological efforts have been made to make this system even faster and more efficient for different supply chain stores. Since its introduction, efforts were also made to introduce technology in the supply chain management process which would allow customers to select the products through the Internet. Through this innovation, they have also managed to make a direct transaction and delivery from ship to the customer possible. As noted by Wailgum (“Article”) technological innovations on the tracking of shipments throughout the world have gotten better in the current era of globalization. And these innovations are being introduced faster in these times where many companies are pressured to come up with the ‘next big thing.’ And although these innovations are still very much expensive, the trend for the globalized market in decreasing costs of technology is a trend which will eventually apply to these tracking systems. With the advancement of developing countries like India and China, this supply chaining has, in some instances, been reversed. Coupled with the fact that many of the primary Western economies have been experiencing economic difficulties these past few years, supply chaining has somehow benefited emerging economies as well. Globalization has resulted in a major part of the supply chain being established in emerging economies such as China and India. “Increasingly, these emerging economies also form the endmarkets of a lot of industrial and consumer products” (Lee & Chung-Yee, p. 1). The knowledge and experience in the operations and management of supply chains involving emerging economies is actually limited. But the fact remains that it has become a phenomenon which continues to thrive in this globalized world. The emerging economies of China, Hungary, India, Vietnam, Costa Rica, Mexico, and Brazil are all in the very midst of major supply chains. Brazil, Russia, India, and China (BRIC countries) constitute the economic contributions of the G6 and are even expected to surpass the G6 in 40 years time (Lee & Chung-Yee, p. 2). The other barriers that seem to hinder the developed nations in their supply chaining are not as complicated to handle for these emerging economies as they are also playing roles of suppliers and designers. The developed nations have to deal with problems which come with importing raw materials and semi-processed goods. But the reversal of supply chain management has become more favorable for these economies as compared to the global supply chaining in the developed countries. These developments in supply chaining are likely to put more pressure on myself and on the economies in the developed world to consider how these emerging economies can become major markets for consumer goods. This will help me and my company in gaining a foot in such emerging economies and to adopt the most applicable innovations from these emerging economies to our own business ventures. Supply chain management (SCM) as a career involves the “identification, acquisition, access, positioning and management of resources an organization requires, or anticipates they will in order to meet strategic goals” (World Wide Learn “Business”). The educational attainment required from a supply chain manager is a business degree in supply chain management in universities offering and carrying such courses. Minimum coursework for such a degree involves the following areas: transportation and logistics; inventory and forecasting; sourcing and supplier management; reverse logistics and green issues; facility location; outsourcing and strategic alliances; global supply chain issues; and product design and new product introduction (Careers in Supply Chain Management “Coursework SCM”). A full listing of universities and colleges offering the degree is available in the Careers in Supply Management website. This course is attainable. The course is available in community colleges, universities, and specialized schools. Some schools even offer a few courses pertinent to supply chain management and for those interested in a deeper understanding of SCM, four year degrees are also offered. These degrees require students to finish general coursework in accounting and management. There is a high likelihood that supply chain management will be outsourced, digitized, and automated. About 80% of executives indicate that their collaboration with third parties have been increased by globalization. “And an ever broader range of activities is being outsourced: between 2007 and 2010, R & D outsourcing is forecast to increase by 65%, and engineering services and product-design projects by more than 80 percent” (Moffat, p. 12). The outsourcing in SCM is actually the cheaper option for many executives because there is cheaper labor and raw materials in many developing countries which can be taken advantage of by companies in order to achieve lower costs in production. Following the trends in outsourcing, supply chaining has also become digitized and automated. One good example of the automation in supply chaining is the practice of Wal-Mart where the simple reading of the product’s bar code will immediately notify the stores’ central warehouse that they have one less of the purchased product (Friedman, p. 153). The raw materials suppliers are also informed that the manufacturers need more raw materials for the product purchased. This automation has made the process of supply chaining even more expeditious. Companies in the field are having a difficult time coping with globalization. Nevertheless, with many adjustments, they are managing to eventually cope well with the demands of the globalized economy. Globalization means almost a 24/7 work process and solutions to problems are required almost immediately. Executives are quick to point out that “globalization is increasing the need for planning and supply chain visibility…to do this, they require richer functionality for sales and operations planning as well as improved supply-chain visibility” (Krivda, p. 1). For companies who do not improve their serviceability and reliability in the supply chain, they usually encounter serious problems and consequently, they also face enormous financial losses in the process. Globalization has affected the social, political, environmental and ethical issues in supply chaining. Buyers in home countries facing public relations issues are often looking for competitive leverage. They are then focusing on supplier employee working conditions and human rights, and environmental issues in relation to reduced emissions and packaging waste (The Aspen Institute, p. 1). These issues have to be settled in home countries before supply chaining can even be set-up in these countries. Globalization has not assured that social responsibility in corporate management can be applied by all companies engaged in supply chaining (Graebel Global Supply, p. 3). The applicable laws in place from the source of supplies may not be as restrictive for the home countries of manufacturing companies. These conditions are not favorable for the developing countries that may not have any choice but to earn their living and be gainfully employed. Conclusion Supply chaining in the current age of globalization has taken on an even more permeating nature. The world has indeed become ‘flat’ and this ‘flattening’ is due to mechanisms such as supply chaining. Supply chaining is the horizontal collaboration among the suppliers, the manufacturers, and down to the retailers to create and eventually market a product. Technological innovations have managed to make global supply chaining an even more convenient process to carry out. These innovations have made the tracking and communication between suppliers and manufacturers faster and more convenient. And in the current age which has manifested the emerging markets of China and India, supply chaining has been somehow reversed, with these suppliers and manufacturers somehow ending up as user markets. Supply chain management is a course subject in colleges and universities; in some schools, it is a four-year degree and it covers a range of course subjects from reverse logistics to global supply issues. It can be easily attained and availed of in different colleges and universities. It is also a career which has a high probability of being outsourced and automated. Outsourcing is the cheaper alternative for many companies and automation is also the more convenient and faster means of monitoring the supply chain. Some companies are having a difficult time coping with the demands of this global supply chain because of the major adjustments in their business activities which have to be made. Nevertheless, these companies are eventually making and adjusting well to the demands of globalization and the global supply chain. The complexity of the global economy has become also a difficult process in the social, political, environment, and ethical areas of the global supply chain. Tracking social responsibility among corporations has become easier to circumvent. Nevertheless, with all its advantages and disadvantages, supply chaining has become has undoubtedly become the future of marketing. Works Cited “A Closer Look at Business Education: Supply Chain Management”. p. 1. February 2008. The Aspen Institute. 30 April 2010 from http://www.aspencbe.org/documents/SCMmass.pdf Friedman, W. “The World is Flat”. pp. 151-166. 2007. New York: Farrar, Straus, & Giroux Publishers “Globalization adds complexity to supply chain management”. p. 3. 2009. Graebel Global Supply. 30 April 2010 from http://www.graebel.com/NR/rdonlyres/AE4B0867-9788-4867-848F-563C4335D8D5/116/GraebelGlobalSupplyManagementwhitepaper.pdf “Guide to College Majors in Supply Chain Management”. Business. 2010. Worldwide Learn. 30 April 2010 from http://www.worldwidelearn.com/online-education-guide/business/supply-chain-management-major.htm Krivda, C. “The Global Supply Chain: Discovering New Opportunity Across the “Flat World””. pp. 1-2. 2005. Business Week. 30 April 2010 from http://www.businessweek.com/adsections/2005/pdf/0535_supplychain.pdf Lee, H. Chung-Yee Lee. “Preface”. pp. 1-7. 2006. Global Production. 30 April 2010 from http://www.global-production.com/scoreboard/resources/lee_2007_building-supply-chain-excellence.pdf McCabe, E. “Viewpoint -- Technology Enables Supply Chain Innovation At Sun Sun uses a "one-touch" supply chain”. p. 1. 1 January 2007. Industry Week. 30 April 2010 from http://www.industryweek.com/articles/viewpoint_-_technology_enables_supply_chain_innovation_at_sun_13220.aspx?Page=2 Moffat, R. “The Smarter Supply Chain of the Future”. pp. 1-69. 2009. European Supply Chain Institute. 30 April 2010 from http://www.escinst.org/pdf/CSCO_study.pdf “The Value of a University Education”. Coursework SCM. Coursework SCM. Careers in Supply Chain Management. 30 April 2010 from http://www.careersinsupplychain.org/building-expertise/univedu.asp Wailgum, T. “Supply Chain Management Definition and Solutions Supply Chain Management (SCM) topics covering definition, objectives, solutions and the impact of globalization”. Article. 2010. CIO Business Technology Leadership. 30 April 2010 from http://www.cio.com/article/40940/Supply_Chain_Management_Definition_and_Solutions?page=4#scm_globalization Read More