SCM & Economic advancement...

A couple of days earlier, when going through an article on a financial daily website, I came across the case of an Indian company which forayed into other businesses since it had an access to the supply Chain. There was much emphasis on the advantage an existing supply chain network when a new product category was contemplated by the company. What the heck!! I’m talking of ITC’s foray into packaged foods like wafers & biscuits with the successful launch of Bingo & Sunfeast brands respectively.

This led me to further link (probably discover) the strong association of Supply Chain with one of the buzz words of last decade – Globalization. I recollect coming across this term in a seminar which narrated these terms as a potential threat to the Indian industry in form of an LPG bomb – expanded as Liberalization, Privatization, and Globalization. Can’t remember if that was a seminar on Communism?

Anyways, coming to think of it as a Supply chain Analyst, I learnt that the major push behind globalization has been supply chain indeed. Considering the broad level definition of supply chain – The Coordinated Movement & Manufacture of Goods & Information, with the objective to have the right product at right time at the right price with minimal cost. Voila! This has boosted cheap labor countries like China to become the worlds’ manufacturing hub.



Hence, its supply chain objectives which have urged the developing nations like India to remove trade barriers. Moreover, simple supply chain decisions like those of “Make or Buy”, have indeed increased the imports in to US, & thereby increased level of exports from developing nations like China & now, India too.

Hence, in the present scenario, there are branded product manufacturers like Mattel (Barbie Doll manufacturers) who have successfully set up manufacturing operations in China. & Finally, for all the companies now contemplating setting up (& expanding) off-shore manufacturing shops like Volvo & Renault, the ease of supply chain execution is the predominant starting point for finalizing locations. My take: the ease of availability of labor, access to an efficiently managed port (for import / export of components / finished goods), trade regulations & the local environment vis-à-vis the ease of setting up an establishment are the further detailed level viewpoints these companies consider when choosing a location to set up an off-shore manufacturing shop.