Global Logistics and Supply Chain Risk Management
INTRODUCTIONAs supply chain is becoming more global, and organizations are exploring markets in Africa, China, and Asia, the logistics of bringing demand and supply closer to each other are becoming more challenging and it raises some structural and security issues within global environment. These structural changes are constantly facing pressure to do more with less and often they are associated with geopolitical, socio economic, technological and other risks, which require different mitigation approaches for organization to operate globally. These challenges require seeking more innovative solutions, which coupled with rising consumer expectations, can and possibly would stress traditional supply chains to near breaking points. Obviously, global supply chains' disruption and breakage can prove costly, as the supply chains are the backbone of the global economy, fueling trade, consumption, and economic growth. Therefore, as the uncertainties and risk increase in the global economy and the supply and demand imbalances become a key challenge for the companies to mitigate, the crucial role of supply chains to manage demand and supply becomes of paramount concern. Consequently, the aforementioned changes, due to globalization, require different logistics and supply chain strategies for organizations to succeed in the global markets.This study will explore the above concerns, and it is aimed at studying the most critical issues in global logistics and supply chains through an in depth study of organizational risk management and their strategic objectives. It is expected that the results will provide better approaches and directions for organizations to mitigate risks associated with globalizations to reduce cost and to increase responsiveness.DEMAND AND SUPPLY MANAGEMENT IN GLOBAL ENVIRONMENTToday, supply chains are becoming the backbone of the global economy and many governments and businesses are becoming increasingly concerned about supply chain disruptions and managing its risk mitigation. In other words, they are seeking to build and to create supply chains resiliencies through better understanding of demand and supply globally. According to the 2015 IMH industry survey (Castiglia, 2014) the demand pressure for lower prices and faster responses will be one of the major challenges for industries in the next decade. The report also highlights the need for investing in advanced technologies to support their supply chain network to satisfy the diverse global demands of constantly changing marketplaces. Moreover, the report shows that the management of this ever divers and changing market demands becomes more uncertain and complicated when the supply side of industries' supply chains are frequently and increasingly disrupted and are becoming difficult to manage. Noteworthy to know that many worldwide supply disruptions are driven by natural disasters, political unrest, labor stoppages, changing economic and political regulatory restrictions, etc. and industries should include those possibilities and their mitigation approaches into their strategic planning. Understandingly, companies that can respond to supply disruptions better and faster they would have a more competitive edge over their competitors.Interestingly to know that although organizations can influence their global demand through pricing, advertising and other forms of promotions, but they can better manage supply strategically within their supply chains. Moreover, according to Bill Michels of Airpark consulting (Michels, 2014) the future supply chains are moving away from being cost focused to more of a focus on value. He emphasizes that the value can be created through the degree to which the suppliers can have speed to the market, new product development and innovation, integration and transparency. And, at some points industries need to emphasize on sustainability, corporate and social responsibility which customers are demanding.