The critical issues in global chain management include quality and compliance of products the growth and change of markets and also globalization.The critical issues are contributed by customer's demand, competition from other companies dealing with the same products as you are. For example, ECCO faced a lot of competition from companies like Timberland, Nike, Geox, and Clarks. Some factors that contributed to this competition was that the customers were demanding more innovative products at a time and at a reasonable purchase and this was a challenge to the company because the response from the company and also the effective cost was difficult for the company.
Geox was a threat too because it produced casual footwear same as ECCO'S. Geox was a more advantageous position since it had its production sites in Slovakia and Romania which outsourced the China manufacturers. The timberland production technology was uplifted its company when they introduced waterproof shoots and also designed casual boots and boat shoes and these greatly outdid the ECCO'S production.
Other challenging issues in supply chain management are globalization, the growth of market and customer demands. Globalization is the biggest challenge that companies encounter since they have to reduce their cost in supply chain management. Companies receive great pressure from customers when a new product is designed by other commentating companies and the customers demand more innovative wear from its company.
This becomes a challenge to the company since they have to redesign the network in supply so as to meet the customer's demand. Companies prefer relocating in low-cost production countries so as to minimize taxes and to reduce their direct and indirect costs. The manufacturing companies have to meet the standards of local and international regulations that are required in packaging in and shipping of the manufactured products.
In order to deal with challenges facing supply chain management, first, you have to make sure there is an availability of raw materials and when the stock is available to supply chain becomes easy. On understanding the lines used in global trading on how they affect the company's product, it helps you to take advantage of upcoming opportunities and the skills when to expand the company to new markets.
Choosing the right suppliers and supply partners will comply with the rules and regulations applied in the market that you work on is important because they make the supply chain easier for the company. In order to maintain an effective supply chain management with fewer problems, you have to introduce techniques for reducing risk management skills. These skills include; efficient contracting management and innovation, financial stability and visibility of the supplier, Optimization of the provider, insurance requirements for the supplier and liability limitations.
For a company to have high-quality products, it has to choose correct raw materials, test and approve that they meet the qualities required by of international standard rules. The company has to shorten its production cycle and increase its manufacturing productivity in order to meet the customer and market demands a company has to keep itself updated with new technology with help of engineers employed in the firm to make sure that they come up with new production skills that are more productive safe and durable.
(Gereffi, Gary, John, Timothy. The governance of global value chains 2005)
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