Global trade management is essential to help navigate the current ‘new normal’ climate to capitalize on market instability

Over the last few decades, businesses have increasingly cultivated relationships with offshore third-party suppliers. The products produced in the factories are integral to global trade. Spreading through a robust and modern global supply chain that involves sourcing from multiple factories in multiple countries. Global procurement of raw materials and components and outsourcing manufacturing is the norm rather than an exception in the current supply chain scenarios.

This demand-driven exponential rise of global sourcing leads to new supply chain management challenges, changing continuously due to the dynamic nature of this industry.

They are activating manufacturing partners to anticipate shortages and demand spikes before they happen. It can scale down production tomorrow if consumer demand shifts in the market.  Proactively managing while building resilience is the major challenge in front of the suppliers, so supply chain leaders need to be aware of all the recent developments around the globe. 

Strategic and planned global sourcing and procurement leads to more innovation and working with supply redundancies while keeping costs down. Today’s supply chain leaders must ditch decade-old models and create an efficient and reliable procurement process that includes contingencies for logistics and raw material suppliers. In addition, Global procurement professional must create and test “what-if scenarios” and needs to prioritize and mitigate factor tariffs, embargoes, and trade wars in their global procurement plan.

Effective supply chain management accelerated the global commerce movement post-pandemic while adopting the best practices are integral to a sustainable supply chain.

It is a well-aware fact that supply chain leaders like Amazon, focusing on global procurement, provides a significant competitive advantage over companies that limit procurement to domestic production.

Procuring supply chain components from global sources

To meet the rising demand of end-consumers and accelerated shift in consumer-spending behavior, resulting in the diversification of large companies opting to optimize procurement strategies beyond domestic providers. 

A massive paradigm shift in consumer interest compels companies to source raw materials and products globally, facilitating boosts in supply and production, and it poses its risks.

When a trade barrier or natural disaster disrupts services taking a supplier offline, the agile supply chain manager can leverage the other supplier relationship to meet the demand. Supply chain managers must quantify the risks, manage them and develop a sourcing strategy that maximizes the benefits of global sourcing.

Companies exchanging huge volumes of components, raw materials, and commodities share strong relationships. Also, it boosts the country’s economy if a part of a country’s economy depends on trade. Moreover, a trade embargo can be avoided due to the volatile government action.

Cross-border supply chains and procuring products incentivize governments to maintain cordial alliances, reduce tensions, and strengthen their economies. Responsible global sourcing and solutions also allow procurement professionals to source the best quality raw material at the lowest price, creating the best value for the enterprise.  

Leveraging this type of global purchasing strategy and alliances with offshore suppliers has significant macroeconomic benefits and can give your company a competitive advantage. 

Trends in global supply chain procurement

The predominant trend in global supply chain management is that global markets witnessed significant volatility due to pandemic-induced partial and complete shutdowns. Therefore a robust procurement strategy should be in place. In addition, when one major economy moves, another may be completely shut down due to a coronavirus flare-up.

To address the pandemic-related realities of the current supply chain risk, researchers from the Global Supply Chain Institute at the University of Tennessee, Knoxville’s Haslam College of Business are cautioning supply chain leaders to expect disrupted transportation systems for the foreseeable future. Agile supply chains are new trends that can quickly adapt to emerging supply chain disruptions. 

Also, another supply chain trend that is unnoticeable is sustainable supply chains, which minimize the worse impact on the environment. 

Additionally, supply chain leaders prioritize incorporating ethical global procurement practices and leaving traditional ones behind.

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