Operational and Strategic Issues in Global Logistics

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Global logistics is the process of managing the flow of goods and services across international borders. It is a critical function for businesses operating in today’s globalized economy, enabling them to reach new markets and compete on a global scale. However, global logistics is a complex process that involves a range of operational and strategic issues that companies must navigate to ensure the smooth flow of goods and services.

Operational issues in global logistics include transportation and logistics infrastructure, customs and regulations, supply chain visibility, and risk management. Companies must ensure that they have access to reliable transportation and logistics infrastructure to move goods and services across borders. They must also be familiar with the customs regulations in different countries to ensure compliance with local regulations.

Supply chain visibility is critical to managing inventory levels, reducing lead times, and improving customer service, while risk management involves mitigating risks such as natural disasters, geopolitical instability, and supplier bankruptcy.

Several international, regional, local, political, and business issues affect global logistics and they also affect the manufacturing and delivery competencies. Some of these issues affect the operations and strategy of global logistics.

Operational and Strategic Issues in Global Logistics

Complex Taxation Laws

Logistics operations face differing laws related to taxes and customs in various countries. Organizations need to incorporate these variations in their planning.

Different Quality Standards

A product’s quality accepted in one region may be rejected in another. This can be a challenge for organizations to constantly adapt their quality levels.

Different Customer Expectations

The expectations of customers are increasing continually. They want more quality products and services at less cost. The huge expectation can sometimes be a challenge for organizations to meet.

Rapid Technological Changes

An increasing number of businesses incorporate the use of technology in their operations. Such the latest technologies create newer challenges, for instance, time to adapt, as well as ease of working.

Conflicts in Networking

Previously, organizations used to operate in their independent spheres. Now, there is increased interdependence between suppliers and customers which has created a network of business stakeholders who aim at integrating their services. Sometimes, this networking can create conflicts between them.

Limitations in Infrastructure

These include limited transportation options, poor roads, improper train schedules, etc. Such issues in one part of the supply chain can affect the entire logistics flow resulting in delivery delays.

Shortage of Talent

Untrained personnel, shortage of skilled manpower, and low competence in supply chain management can affect production, quality, and delivery schedules.

Nowadays, there are many institutes around the world, which have started courses in supply chain management. Besides, organizations are also analyzing potential delays in terms of how they may affect the production or promotion of goods and services. Many logistics organizations provide suppliers with Internet-based tools that help them.

  • Production status updates
  • Purchase order acceptance
  • Quality check results
  • Shipment routing
  • Barcoding of cartons and products
  • Radiofrequency identification (RFID) tags

Security Concerns in the Global Supply Chain

Security concerns related to the supply chain are increasing in day’s volatile political environment. The Customs-Trade Partnership Against Terrorism (CTPAT) is an initiative, which is aimed at increasing the security of goods entering the United States.

There is also high variability in international logistics. This has an impact on inventory and its movement. Global logistics leaders aim to minimize lead times for the delivery of products. They aim to enhance the performance of suppliers and service providers in the long term, in terms of timeliness, cycle times, accuracy, and quality. The overall aim is to reduce risk in the supply chain through suitable access to necessary information. There is easy access to information related to:

  • Cost
  • Carrier rates
  • Carrier capacities
  • Contract commitments
  • Shipment details
  • Movement schedules
  • In-transit status
  • Performance measures
  • Dynamic, real-time scheduling
Article Source
  • Slack, N., & Lewis, M. (2011). Operations Strategy (1st ed.). Harlow [u.a.]; Munich: Pearson.

  • Waters, C. (2006). Operations Strategy (1st ed.). London: Thomson.

  • Heizer, J. & Render, B. (2001). Operations Management (1st ed.). Upper Saddle River, N.J.: Prentice Hall.

  • Kale, S. (2013). Production and Operations Management (1st ed.). New Delhi: McGraw Hill Education (India).

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