Decision Support Systems Introduction, Categorization and Development
When it comes to good decision making, relying too heavily on automatic decisions stemming from perception or depending too much on conventions when information is bombarded on to us from all sides can be dangerous. Sometimes, you fail to either notice or seek out crucial information that supports decision making. This may be because of […]
How Big Data and Algorithms along with Platform Capitalism Rule Our World
The Elements of the Digital Economy If you have ever transacted on an eCommerce site or have used your Smartphone or Mobile for commercial purposes as well as have taken a ride in the digital aggregator cab services such as Uber or have ever used Mobile Wallets and other forms of digital payments, chances are […]
The New Economics of the Music Industry
The economics of the music industry has been radically changed in the past two decades or so. Ever since the internet became a reality, music could be shared for free. The entire industry faced the onslaught of the latest developments in web technology. Companies like Napster encouraged piracy and allowed users to download and share […]
Next Wave of International Business Investing: Emerging Market Cities
Emerging Market Cities and their Growth Potential Studies have shown that the number of cities in emerging markets is growing. Now, there are nearly 700 emerging market cities with populations of more than half a million and this number is expected to grow in the years ahead. The proliferation of Tier II cities alongside the […]
Is India on the Brink of a Serious Economic Crisis?
Widening Current Account Deficit The first and most important problem facing the Indian economy is the widening current account deficit or the CAD. The CAD refers to the difference between the exports and the imports, which is always a deficit for countries like India that are dependent on imports of oil for their economy. However, […]
We have discussed how the globalization of the world economy has made the globe more integrated and interconnected. While this has both positive and negative effects on the way global trade and commerce takes place, there is one critical aspect that needs our attention. That is to do with the globalization of the supply chains that link world trade and commerce. Before launching into a full-fledged discussion, it is useful to consider what supply chains are and what globalization has done to them.
Supply chains are the networks of buyers, sellers, intermediaries, and vendors involved in the production and distribution of goods and services. The interlinking transport and communication that facilitates the trade and commerce is also part of the supply chain.
The globalization of the supply chains means that goods produced in one part of the globe can be transported to another part of the globe and indeed, each component of the goods thus produced can be made in different countries. For instance, if we take the Apple iPhones, different parts are made in different countries including China and the finished product is shipped to the United States and Europe where it is sold.
The implications of the globalization of supply chains is that in case of a breakdown in one part of the globe of the supply chain, the whole network is impacted leading to delays and disruptions in the transport and movement of goods. This means that any disturbance in one country in the supply chain impacts the entire supply chain leading to chaos and confusion. This is definitely one of the negative impacts that the globalization of the supply chains has for manufacturers in the global economy.
For instance, because of the Fukushima Earthquake in Japan, the delivery of components in the electronics industry was impacted leading to all round disruptions and delays in the supply chain.
Similarly, in recent years, disturbances in India have meant that the supply chains for services have been disrupted which has impacted the BPO and the IT sector to a great extent.
The remedial measures for such a negative impact would be to have backup suppliers and have backup sites for the suppliers themselves so that they do not let the buyers down because of any disruptions.
Globalization has many advantages and disadvantages. In a similar manner to globalization creating prosperity, the fact remains that globalization of the supply chains creates problems as well. Hence, the implications for this are that each of the party in the supply chain takes precautions and ensures that the network is not disrupted in case of any disruptions to the place of operations or in the transport and communication links.
We cannot rule out globalization completely and hence, we must take appropriate measures to safeguard against the perils of the process. This is where contingency planning and business continuity planning come into the picture and this is where the capabilities of the stakeholders determine the success or otherwise of the supply chain.
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What the Current Wave of Protectionism and Populism mean for the Future of Globalization and Free Trade
February 12, 2025
