SCM: A Tale of Two Continents

Supply chain management is essential to the smooth and efficient functioning of businesses. It covers a significant proportion of the total costs incurred by a firm. And its importance will only increase with the reinvigorated focus on resilient global supply chains.

Developed economies provide access to high quality logistics infrastructure, proficient third- and fourth-party logistics service providers and advanced information and communication technology infrastructure to the firms operating in those countries. This enables firms to develop sophisticated supply chain management systems which bring down overall costs, time spent on transportation and inspection and allows them to increase customer value and satisfaction. But in today’s world, political instability and systematic risks can lead to severe disruptions, which calls for more resilient supply chains.
One effective way of achieving this is to spread operations across multiple regions, thus reducing exposure to geo-political risks and providing access to new markets and cheaper means of production. Asia serves as an ideal hub achieving these goals, as the developing countries offer rising consumer demand and economic production and distribution opportunities.
But this region is affected by a series of supply chain issues, which make the logistics environment less suitable for employing modern supply chain practices. Yet, by carefully assessing the various countries in the region to make an educated choice of location and by researching the selected region’s benefits and shortcomings, companies can avoid logistical pitfalls and maximise the benefits provided by the region.

Shivam Vashisht