Tuesday, 12 March 2013

Supply Chains Connect Everywhere and Impact our Entire Globe

Authored by Shayda Sharfaei

Sometimes in our own little corner of the world we forget about the rest of the world. Other than a news source we might not plug into the fact that our world is interconnected and the problems we have might just be the same somewhere else in the world. Two completely different corners of the globe bring this to mind with their recent supply chain issues.

In November 2012, the Brazilian consulates world-wide faced delays and in some cases a complete stoppage in the issuance of new visas because of a supply chain shortage. The microchips used for seals, foils and Brazilian passports were in short to non-existent supply. In just three weeks the supply chain received its microchips and visa processing returned to normal.

And in India, according to the
Economic Times, the consumer price index (CPI) is over three percentage points more than the increase in the wholesale price index (WPI) because of price increases in the food and beverage category (mainly vegetables, oils and fat, cereals and sugars.) The government is creating the shortage by hoarding food grain and increasing the prices. According the Economic Times, the supply chain allows any minor shortage in relation to demand to translate into speculative gains for trade. Shifting the policy to building an efficient supply chain between the retail markets and the farmer could significantly alter the issues; farmers gaining from higher prices of farm produce will start producing more products to meet the retail demand.

At the end of the day, supply and demand are at the crux of every supply chain issue. It is only our location and perspective that changes our view of its importance.

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