Logistics Management for International Businesses

The Importance of Logistics Management for International Businesses

In this interconnected and integrated world, managing the logistics of the global supply chains is very important for international businesses. The global corporations often design their products in one country, manufacture them in another country, assemble them in a third country, and finally, market them all over the world. This means that the global supply chain would have to incorporate all the different countries and the components of the process into one integrated whole that can be monitored and tracked in real time.

In other words, the design must reach the manufacturer in time, the manufacturer must ship the products to reach the assemblers before schedule, and the assembler must similarly ship the finished product with the time to market being met.

The time to market is the time that a product takes from inception and conceptualization to the finished product in the hands of the consumer. As the examples discussed subsequently show, the reduced time to market that global brands face because of intense competition means that the logistics for managing the global supply chains must be perfect. This is the key challenge that operations managers in global firms face when they design the supply chains to minimize costs and maximize profits.

A Case Study of Apple

The world’s leading Smartphone and Tablet Computer maker, Apple has a global supply chain that integrates the design in the US, manufacture in China, assembling in many countries, and marketing in these countries.

As the intense competition in the market for Smartphones and Tablets means that unless Apple reduces the lead-time in the entire process, its rivals are likely to launch their products faster. This is the reason why Apple’s Tim Cook who was the operations in charge under the Late Steve Jobs designed a logistics system that would ensure availability of Apple’s iPhones to all consumers and avoid the chaos that ensued in the first few releases of the iPhone.

The system has been perfected so much that the latest release of the iPhone 5s and the 5c were so flawless and smooth that stores all over the world did not run out of stocks and ensured that there was no panic and disorder this time around. This example shows how an integrated and interconnected global supply chain can be efficiently leveraged to ensure that global corporations retain their edge over rivals.

Indeed, logistics management has become integral to the success of global firms and is now considered as a source of sustainable competitive advantage in the same way a game changing idea or an innovation is for the global companies.

Global Supply Chains and Continuity of Business

The other aspect about logistics management in global supply chains is that the operations managers must factor in the delays and the disruptions caused by calamities, manmade disasters, and other unforeseen situations.

For instance, if there is a possibility of a hurricane or an earthquake in one country of the global supply chain, it usually affects the shipment of goods. This means that the operations managers must have a Plan B that would ensure continuity of business and rollover of the logistics.

Further, if the shipments get delayed because of manmade disasters, the operations managers must accordingly have a backup plan in place to mitigate such delays.

For instance, the global electronics industry faced an acute shortage of chips and other components as well as spare parts in the aftermath of the Fukushima Earthquake. This resulted in many products getting delayed in terms of reaching the consumers.

The key lesson for global operations managers is that in this uncertain world, anything can happen anytime and anywhere and hence, the global supply chain must operate like a well oiled machine where even if one part suffers a breakdown, it can be replaced immediately and the show continues to go on.

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International Business