Understanding Global Supply Chain Management

The world of modern business is interconnected in many ways. From the technology that companies use to the skilled professionals who oversee the delivery of goods and services to consumers around the globe, the successes and failures of global supply chain management can have far-reaching and long-lasting consequences.

In today’s marketplace, customers expect products to be delivered to their doorstep within days from anywhere around the world, thereby putting an immense amount of pressure on businesses to streamline their processes. With a strong foundation such as a bachelor’s degree in supply chain management, graduates can build the skills they need to help organizations meet their customers’ demands, helping them improve their systems and succeed in an ever-changing market.

What Is Global Supply Chain Management?

Global supply chain management plays an instrumental role in the success of businesses both large and small, internationally and nationally. At its core, supply chain management is the combination of processes that take a product or service from an idea to a completed entity delivered to customers.

Beginning with an idea or business plan, the supply chain encompasses five key phases in a product’s life cycle. These main phases are as follows:

Planning: The planning aspect of global supply chain management encompasses both setting a company’s overall business strategy and adapting according to customer demand. Forecasting how much inventory a company will need can greatly affect its bottom line, making the planning phase integral to product success.
Sourcing: Sourcing is as much about relationships as it is about managing inventory. Global supply chain managers tasked with sourcing products, raw materials and components decide which market best suits their needs, factoring in trade negotiations, pricing, availability and shipping.
Production: The production phase of global supply chain management encompasses a product’s design, assembly and manufacturing.
Distribution: Distribution involves the logistics of transportation, warehousing, order fulfillment and delivery of a product.
Returns: Companies need to have processes in place to accept the efficient return of products that do not meet customer satisfaction, are defective or are at the end of their life cycle.

Depending on the business, the complexity of a supply chain can vary. From the transport of raw goods to products that require multiple materials for assembly prior to distribution, global supply chain managers must adapt their systems to the optimization needs of businesses on a case-by-case basis.

What differentiates global supply chain management from local supply chain management is the scale of the systems. Local supply chains are those that source, manufacture and deliver their products within a small geographical area. By contrast, global supply chain management performs the same functions but on an international scale. While the entire supply chain does not have to operate internationally, at least part of the system is based or sourced from outside the country.

Why Is Global Supply Chain Management Important?

Global supply chain management can open up many doors for companies. What may have been prohibitively expensive for a company in the past is now much more affordable with innovations in technology, manufacturing, shipping and distribution. It allows companies to look at the international market as one connected ecosystem, where businesses can access raw materials grown or sourced from other parts of the world and collaborate with manufacturers for a fraction of the local cost.

Some advantages of global supply chain management include the following:

Cost reduction: While it may seem counterintuitive, expanding to the international market can reduce costs for many organizations, allowing them to spend less on sourcing materials, manufacturing and labor and shipping or freight expenses.
Diversification: Global supply chain management allows companies to build quality relationships with other suppliers or companies around the world. These relationships can help businesses reach a wider market, serve more customers, maintain higher levels of inventory and provide options when choosing business partners.
Promote innovation: Working with partners around the globe can introduce businesses to emerging technologies and more efficient ways of operating. With customers gaining increased access to products and services from around the world, global supply chain management can force organizations to develop better ways of reaching a wider customer base, speed up their distribution processes and find new ways to approach customer service.
Stability: When businesses rely on a small or local market for their entire supply chain, they can be vulnerable to changes in the local economy or levels of supply and access to goods. Global supply chain management can make a business more resilient to market changes, as they may have multiple sources for their product or, with different phases of their supply chain in various locations, they may be able to isolate issues and respond without disrupting the entire system.

By investing in global supply chain management, companies can not only reach a wider customer base but also improve how they serve their current customers.

For example, many people rely on cell phones every day, but without global supply chain management, these phones would be wildly expensive for the average consumer. While Apple Inc.’s headquarters may be in California, the company relies on over 300 suppliers in over 50 countries to source their materials and manufacture their products affordably — a task that would be nearly impossible to do relying on domestic resources alone.

Working in Global Supply Chain Management

Organizations of all sizes benefit from effective management, and skilled graduates can find opportunities to pursue a variety of supply chain management careers. These jobs may focus on a particular phase of the supply chain or, for applicants with proper education, accreditation and experience, they may be senior or supervisory roles that involve overseeing a company’s supply chain.

For those entering the field, a well-rounded education and industry certifications can be instrumental in pursuing their preferred area of supply chain management. This can involve choosing a program that has Association to Advance Collegiate Schools of Business (AACSB) accreditation, demonstrating to employers that a graduate’s education meets industry standards and that they have the knowledge they need to succeed.

**Global Supply Chain Management Career Outlook

As the field of global supply chain management evolves, the industry as a whole is facing a supply chain talent shortage, with more organizations looking to hire skilled managers than are available. This demand for educated and experienced supply chain managers presents a challenge to businesses, but it can create a promising scenario for new professionals looking for employment upon graduation.

According to the U.S. Bureau of Labor Statistics (BLS), the median annual salary for logisticians was $79,400 as of May 2023, with overall employment projected to grow 19% between 2023 and 2033. By comparison, Payscale reported that the approximate average annual salary for global supply chain managers was around $97,120 as of September 2024.

Build a Fulfilling Career in Global Supply Chain Management

Skilled global supply chain management can help businesses and organizations of all sizes improve their daily operations and better serve their customers. Whether helping a small business expand its customer base or making a large organization more efficient, supply chain managers can be instrumental in helping businesses reach their goals.

By completing a degree such as the online Bachelor of Science in Business Administration (BSBA) in Supply Chain Management from Appalachian State University, graduates can build the foundation they need to enter the workforce with confidence. App State Online’s flexible program offers a global emphasis geared toward continuous professional development, preparing graduates for the demands of an ever-changing global market.

Find out how you can begin a fulfilling career in global supply chain management.

Recommended Readings

Sustainable Practices That Support the Global Supply Chain

What Is a Logistics Coordinator?

What Is the Supply Chain Talent Shortage?

Sources:

Apple, 2024 Progress Report “People and Environment in Our Supply Chain”

IBM, “What Is Supply Chain Management?”

Indeed, Global Supply Chain Definition (Plus Benefits and Tips)

Indeed, What Does a Supply Chain Manager Do? (Plus How To Become One)

Investopedia, “The Supply Chain: From Raw Materials to Order Fulfillment”

Payscale, Average Global Supply Chain Manager Salary