Challenges in Logistics and Supply management

This article will look at how a popular mobile phone MOBI Company’s management has been affected by these concepts. Further, the logistic concepts such as increased information processing and increased costs will also be seen to cause challenges to the company. Finally, this study also reveals that there is a challenge that emerges due to supply chains such as the constant need to reduce costs and the constant changing markets. Main Concepts of Globalization that Challenge Business Management When a company moves from one region to another with the aim or desire to set up a business, there are always only two options that a company has, and that is to be a new business entirely or to use the headquarters in the mother country.

Using the PESTEL framework, there is a revelation that some political, social and economic factors of globalization come to play that then affect the international business management. As noted, the PESTEL framework is useful in assessing among others the economic factors of globalization. As such the second globalization factor is technology and innovation. Thomson and Strickland (2001) also explain that management of multinational companies is affected by technology and innovation as a concept of globalization. The negative effect that comes with this is that a company no matter how small it is will need to invest much more to ensure that they are up to standard with the technology and innovation. Johnson and Scholes (2002) explain that globalization has increased competition among companies.

Khan (2016) explains that political factors do not only mean the political stability of a nation but,t they also include the political decision such as decisions on taxes and payment for the employees in the given region. Challenges Arising from Supply Chain Management In the global market today, as already mentioned, globalization plays a very significant role. Therefore, in supply chain management the organization commonly is faced with globalization challenges. One of the major challenges that are affecting supply chain is the process of outsourcing. Outsourcing has a challenge because it extends the production process globally and further affects the organization’s procurement network. Customs authorities globally are slowly moving in the direction of electronic systems. Modernization is currently the priority for companies today.

With the new automated technology emerging rapidly, the company should be ready to provide the data that the customs authorities may need. Fast Changing Markets Once again, globalization comes into play when it comes to the changing markets. The present-day technology and globalization are constantly and rapidly changing the way in which consumers feel, perceive and even understand products. In other words, while companies are doing product forecasting, they are also facing the challenge of thinking about the eventuality of product changes that are likely to happen in the market about their product (Johnson & Scholes, 2002). As a result, enterprises should have an active supply chain that can be able to handle the spikes and the dips of the product needs by the consumers.

In the end, companies such as MOBI Company should be able to collect enough and necessary data that can be used to determine the changes in the rapidly changing market to make effective market plans. Finally, the mobile phone company should work towards having a consistency in the international supply chain operations. The consistency is necessary for instances where the company has moved and invested in a different jurisdiction where trade practices may be decentralized. Secondly, there are logistic factors such as licenses and the state of business operations in some countries. There are some countries where the governments are not strict on corruption. Therefore, in such cases sometimes business entrepreneurs are forced to operate their businesses but still have to pay bribes to the local authorities.

Such kind of factors makes business operations more expensive and complicated at the same time (Gulati, Nohria & Zaheer, 2000). With such challenges, the logistics for operating the business is made stiffer hence posing a challenge to businesses that have invested abroad. Export control systems may take longer processes and the need for compliance may be costly. Finally, studies have revealed that increasing mergers and acquisitions that have been facilitated by globalization is another cause for a challenge for international businesses (Gulati, Nohria & Zaheer, 2000). New entrants into the business are therefore required to have a lot of capital to compete against much bigger companies that have engaged in the acquisition and are putting up the very stiff competition. Such factors cause challenges in logistical approach to business.

Supply Chain The supply chain has an effect on international business even as Thomson and Strickland (2001) explain that most executives are always uncertain about what to expect and the effect of this. Therefore, in case a company desire to reroute a container shipment and the container becomes invisible, this can affect a very significant decision that is connected to the entire shipment (Gabrielsson & Gabrielsson, 2003). From one port to another port the shipment can turn into a problem that cuts across the entire supply chain, and the result would be increased costs and inefficiency. Therefore, companies are now forced to face a scenario whereas they expand, their logistics also needs to expand and must be able to project scenarios regarding the costs and the service implications of all the decisions made by the company.

Businesses are also forced to redesign their supply chain to make them even better because the need to increase profitability globally is now affected by the fact that product innovation is currently very high and is constantly changing. Logistic leaders are on the other hand faced with further stronger and more significant challenges. Secondly, this has been found to pause more challenges when it comes to recruitment since balancing recruitment between one country to another is a problem. Furthermore, the company is going to have to ensure that there is coordination between the local personnel since the new team might not be able to know the objectives of the company. Finally, the study has also looked into the logistic issues that are affecting global businesses.