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Companies expanding their footprint globally are faced with many challenges. Some of the challenges emanate from the sheer increased trade partners and destinations which make the logistical processes complex by the day. Other challenges originate from the unique characteristics of the host countries which act as hindrances to free flow of the processes. This being the case, it is imperative that such companies find feasible solutions to ensure that the challenges do not significantly water down the gains expected from the global expansions. This paper discusses the challenges faced by multinational companies in expanding globally and maintaining their promise of serving their customers despite the distance and diversity they face.
Depending on whether the company operates on inbound logistics or incorporates third party logistics, the challenges may vary. In a case where 3pls are involved, the most important challenge has to do with quality. Quality in this sense is defined in terms of the ability of the logistics company to be free of errors. In modern business practices which incorporate systems such as the Just In Time (JIT), there is minimal room for any errors. The suitable logistical provider has to be highly flexible to ensure that they avail quality and reliable qualities. There are about two basic considerations in determining whether the provider can be relied upon. First there is a need to confirm how quickly the provider adjust to meet customer’s needs. Secondly, there is need to establish how well the provider can develop synchronization and manage several parties at the same time (Global Supply Chain Trend, 2008, par5).
In addition, there is need to ensure that the provider fully understands the business carried out by the business in order to help in the development of feasible solutions as well as build a relationship which helps them relate closely.
Ensuring reliable delivery is paramount for any committed company. There are some important steps which help with securing reliable delivery from the provider. First, there is need to ensure that an order is accurate and that nothing has altered its form. There is also need to ensure that the consignee is available and alert in order to receive the consignment in good time (Manufacturing & Logistics IT, 2010, par7).
One increasingly significant challenge in international deliveries involving shipping vessels is the risk of experiencing delays at the ports. Many nations have inefficient clearing procedures at their ports and there are great variations in the amount of time taken to clear cargo from different ports. Sometimes the delays may be inevitable as they may result from the inefficiency of the systems but there is need to ensure that no delays can be attributed to the firm’s inefficiency.
There are some important activities with the potential to significantly reduce delays. The most important and seemingly obvious strategy is ensuring complete documentation required for clearing. Prior to the clearing process it is vital that all requisite documentation is available so as to facilitate clearance as well as avoid fines and unnecessary audits which may have implications on costs. Another important consideration is conducting pre-clearance activities. This may be available for some ports which have automated clearance systems (Medina, 2010, par3).
Warehousing is another important challenge for multinationals. Capacity for warehousing may vary depending on the nature of the products and the market trends. The result is that there is either too much inventory as well as finished products pushing up holding costs for the company. Technology comes in handy to solve such problems. By having technology with capabilities to analyze inventories on a real time basis, it becomes possible to reduce the piling up of raw materials as well as shortages in the expanding markets.
One emerging concept in managing the supply chain is that more emphasis should be on managing the network as whole rather than managing individual units such as transportation and warehousing. The separation of the management for such closely linked facilities is a source of major inconsistencies which result in disjointed approach. It is important to ensure that the team responsible for each of the units has close communication aimed at ensuring a smooth flow of goods (Perry, 2006, par6).
Clearly, there are important challenges for firms operating on a global scale. The challenges are compounded by the uniqueness of the different economies in which they operate. However, some simplified but practical approach to the management of supply chains can be implemented successfully to improve efficiency. Critically, the solutions to the challenges must be cost effective in order not to erode the competitiveness of the company in the global market. In cases where 3plcs are incorporated, the vetting process has to be taken extremely serious because, they are effectively in charge and their incompetence would appear to be the incompetence of the company. On the other hand in the case of inbound logistics, it is important to have adequate integration as well as a management structure which seeks to eliminate the boundaries between the different but closely related units.
References
Global Supply Chain Trends. (2008). Driving global supply chain flexibility through innovation. Web.
Manufacturing & Logistics IT. (2010). Logisticstit. Web.
Medina, M. (2010). Global Recycling Supply Chains and Waste Picking in Developing Countries. Web.
Perry, M. (2006). Addressing Australian cereal product supply chain challenges. Monash University. Australia.
Do you need this or any other assignment done for you from scratch?
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