Global Supply Chains and Analytical Frameworks

Introduction

Many organizations have been challenged by various government regulations to produce goods that are worth to customers (Palpacuer, 2008). Governments have come with approaches to ensure uniformity in the production and distribution of manufactured goods to customers. Arguably, each firm should strategize to win consumers in the market. Many approaches have been designed to promote the production of high-quality goods at lower costs (Palpacuer, 2008).

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Activists of global supply chains have emphasized the significance of utilizing global supply chains (Palpacuer, 2008). Due to high levels of competition in markets across the world, companies should employ modern expertise and machinery to maintain their positions in the market (Storey, et al., 2006). Supply chain management and global commodity chains guarantee high-quality products, while global production networks ensure that commodities are distributed conveniently (Storey, et al., 2006). Thus, if they are appropriately used, firms would satisfy customers’ demands. This paper concentrates on evaluating the strengths and weaknesses of supply chain management, global commodity chain, and global production networks.

Strengths of Global commodity chain

Promoters of GCC have differentiated between a commodity chain and GCC (Milberg, 2008). Milberg (2008) has defined GCC as an investigation, which deems social and cultural dimensions of production develop theoretical firmness. About the production of goods, it focuses on the costs of production that should be affordable (Jacoby, 2009). This is the case in the publication of Jacoby (2009), where he argues that GCC is based on different rules that allow various distributions among business establishments.

Besides, advocates of GCC, such as Jackson, Ward, and Rusell (2006), have shown that GCC promotes specialization, especially where different companies are tasked with the responsibility of producing different commodities. This is advantageous because it is easier for firms to monitor work processes (Jackson, et al., 2006). Trust has developed among companies through GCC, resulting in better methods of solving issues. As evidenced in the works of Gerrefi (1994), to the buyer-driven commodity chain, the attention is focused on the needs of customers. This implies that what would be produced is of high quality (Gerrefi, 1999; Gerrefi, Humphrey, and Sturgeon, 2005).

Firms that use this approach manage the creation of goods and incorporation of products. For example, Nike and Reebok shoe companies, and The Limited and The gap clothe firms (Gerrefi, 1994; Gerrefi, Humphrey and Sturgeon, 2005). Moreover, there is the standardization of commodities (Hernderson, et al., 2002). This is the case because of specialization, where companies focus on developing one product. Proponents of the buyer-driven approach in GCC indicate that trading companies have emerged, a fact that has led to collective bargaining of products (Hernderson, et al., 2002). According to Gerrefi, Humphrey, and Sturgeon (2005), GCC is a set of networks that surround products.

Also, there has been consolidation in the purchasing power of retailers’ chain. This shows that GCC is typified by low labor cost, resulting in competitive advantage (Gereffi, 1994). GPNs framework leads to greater complexity and geographical differentiation among manufacturers and consumers compared with GCC (Hernderson, et al., 2002).

Weaknesses of the global commodity chain

Despite the many advantages of the GCC framework, many activists have criticized it. In his work on power, rents, and critical asset, Cox (1999) has cited that GCC is characterized by political influences. Production practices are typified by high costs to maintain control of chains (Cox, 1999; Henderson, et al. 2002). A study was conducted by Strage and Newton (2006) to investigate whether there is a relationship between poverty and the creation of goods.

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The researchers found that wealthy nations have high technologies that enable them to play leading roles in branding commodities (Strage and Newton, 2006). The researchers concluded that developed countries reap more benefits than developing nations (Strage and Newton, 2006). Therefore, critics argue that it favors developed and economically stable states, ignoring the poor states because of modern technology in developed states.

Antagonists challenge GCC and argue that it is difficult for organizations to synchronize changes in many firms (Selwyn, 2000). GCC has been criticized for not attempting to understand the importance of companies’ ownership, including their nations of origin (Selwyn, 2000). For example, few developing countries have managed to generate the backward-forward connections, expertise, infrastructure, and local value-added in East Asian NICs compared with a developed nation (Selwyn, 2000). Another problem of the GCC framework is that the commodity chain does not only link different firms but also social and institutional contexts nationally (Andersen and Skjoett-Larsen, 2009)

Strengths global production networks

To understand the strengths of global production networks, it is important to understand the idea of a network. It describes a system of agents that produce and distribute goods and services to satisfy the final products (Athukorala, 2011). It would be important to indicate that global production networks are critical in linking nations and sub-nations (Athukorala, 2011). A study was carried out by Crang, et al. (2013) to examine the importance of global production networks.

Researchers cited that GPNs have helped to create value by converting resources into usable products and services. They concluded that there is linearity between the links in GPNs (Crang, et al., 2013). Also, organizations have been able to prepare in advance for it discloses multifaceted flow of investments, information, and people in the production process (Crang, et al., 2013). GPNs concentrate on the interrelationships within the manufacturing industry. This view has been supported by Hobbs (1996) where he states that it is vital in social, cultural, and political dimensions. GPNs allow flexibility to specialized suppliers at lower levels. Also, it allows for valuable types of industrial organization, a theory that has come up as a result of globalization (Hobbs, 1996).

Weaknesses of global production networks

Opponents of GPNs have portrayed it as ignoring the role of key companies’ flag bearers at the expense of network suppliers that are more than one stage being extracted from the flagship. However, this concept has been challenged by Glassman (2011) where he emphasizes that networks are more crucial than firms. It is also clear that studies do not focus on a wide range of service functions that are vital for the reliability of GPNs.

Strengths of supply chain management

The concept of the chain has been applied by many scholars to connote a way of thinking that aims at finding out tools and methods to improve effectiveness and efficiency in firms through delivery means, which could be externally and internally (Christopher, 2011; Cox, 1999). The chain management approach has proved to strive for perfection as indicated by Cox (1999). It prioritizes cost advantage where companies produce larger volumes at lower costs. The second priority is given to competitive advantage (Christopher, 2011). Here, firms are expected to watch over others to cater to consumer preference, Activists of SCM argue that it has reduced waste in all processes that result from the circulatory processes.

A study carried out by Mollenkopf, et al. (2010) to explore how consumers and producers relate using SCM demonstrated that networks of traders build comprehension, and learn how to reduce waste and increase efficiency and effectiveness for convenient distribution and delivery of substances. Moreover, it minimizes the number of distributors and work but aims at producing goods of high quality (Mollenkopf, et al., 2010). According to this approach, business is about appropriating value for oneself, and not about passing values to the buyer unless circumstances demand (Christopher, 2011).

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Weaknesses of supply chain management

Proponents of SCM have faced criticism from various antagonists. Some scholars argue that there are serious omissions in this approach, and what has been incorporated in the SCM strategy is common (Marchi, Maria, and Micelli, 2013). This is supported by Laseter and Oliver (2003), who advises business managers to be keen when using the framework. They argue that disabling one part of the chain would affect the entire delivery process. The opponent demonstrates that traders should be consulted because the failure to inform the company’s activities would be disrupted. Problems that could emerge include ordering, accounting, and marketing.

This would be the case because of the numerous parts of the supply system (Lambert and Cooper, 2000). The framework leaves sellers vulnerable because of uneven bargaining situations among traders and buyers. The approach is very tempting in that dealers break organizations’ rules to meet consumers’ needs. If firms do not respect and promote human rights, their names could be blackmailed (Lambert, and Cooper, 2000).

Conclusion

In conclusion, analytical frameworks to supply chains are vital, and if they are well utilized, business establishments would reap more benefits than when they are not used. Many scholars have done the research and have demonstrated their strengths and weaknesses as aforementioned in the study. For example, global production networks are essential in creating value by converting materials and non-materials into usable goods, the global commodity chain is crucial in ensuring that goods that are produced are of high quality, and the supply management chain monitors the procedures that are involved in the circulatory process.

References

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Cox, A. 1999. Power, value, and supply chain management, supply chain management. An international journal, 4(4), pp. 165-175.

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Crang, M., Hughes, A., Gregson, N., Norris, L., and Ahamed, F., 2013. Rethinking governance and value in commodity chains through global recycling networks. Transactions of the Institute of British Geographers, 38(1), pp.12-24.

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