How to Build the Best IT Global Supply Chain
July 21, 2017
Building Your Competitive Advantage as a Global SMB
Any IT firm company that wants to benefit from future global growth must have a predictable, profitable and punctual global IT supply chain. With careful attention to detail, it’s possible to build cost-competitive, in-demand, IT products all over the world. But global supply chains can come with kinks and knots that can keep things from getting done reliably, or predictably. From sophisticated inventory control to global payment methods, IT firms must carefully invest in process optimization and technology in order to gain – and keep – competitive advantage.
IT global supply chain challenges and advantages
Quality control is one of supply chain management’s main goals and it certainly applies to the IT global supply chain. Quality control can be inconsistent because of language barriers or unreliable suppliers. Time zones factor in, 24/7 service response is not always available, and supply chain delays happen. Avoiding, easing, or eliminating these factors leads to higher profit margins for international SMBs. Success in this area can also mean lower prices for customers. Importantly, success in managing a global supply chain makes IT firms more stable in the face of volatile local economies.
Why global supply chains matter for IT
The idea of returning to a domestic IT supply chain is a popular idea. But domestic-only supply chains are unrealistic today and fraught with more problems than global supply chains. They simply are less competitive. There’s more maneuverability, which means less risk, in managing a global supply chain than in managing a domestic one.
Moving between domestic suppliers is difficult while finding suppliers around the globe gets easier every day. There are more firms around the world to choose from than there ever will be at home – no matter where home is. As of 2013, 50% of all revenues to US companies on the S&P 500 came from overseas. Global sourcing makes IT firms a part of an international trade community. Opportunities for sales can open up even within the countries where manufacturing is taking place.
Managing a global supply chain requires investment. It forces a company to be on top of an array of international issues and changes. Suppliers in India are different from suppliers in Mexico who are different from EU suppliers, for instance. But global supply chains are crucial for today’s IT firms. They allow these firms remain competitive.
Here are 5 must-haves for building the best IT global supply chain:
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Quality control agreements
Buyer/manufacturer quality control agreements need extra attention when parties sit at opposite ends of the globe. What one party defines as a defect may differ from the other party’s definition. Specific, mutual expectations should be set by adding quality assurance plans into supplier contracts.
A seasoned pro of international trade will be able to visualize the time of day anywhere in the world. But it takes some time to get there. Being ready any time of day or night is important when communicating across the international date line. An international business person has no reasonable expectation of regular hours. Every tick of the clock can bring a phone call or text needing attention.
Know your source
Nothing can kill a brand like a story about child labor being used to make its products. Even if a company is secretive, detractors or competitors will discover its supply sources. All potential suppliers should be inspected to ensure social compliance, and not just to avoid publicity. Supply could be interrupted by legal actions against suppliers at any time.
Getting creative is the best practice for dealing with delays. Every manufacturer will run into delays. Anticipating where and when delays may occur is a much-needed talent. A number of software options such as Aegis are available to help manage and even anticipate delays.
Simplify moving money
Banking system most businesses have been using to send money around the world are getting antiquated. It’s inefficient, problems occur, and it’s hard to figure out how to fix them when they do. Veem have grown up around the need for small businesses to send international wire transfers with the ease of a large business. They don’t rely on banking systems and move money around the world using several networks. They also pay in local currency, making receiving payments potentially easier on the supplier.