Introduction
The global supply chain is a complex network of entities, processes, and activities that involve the movement of goods, services, and information from the source of production to the final destination. With the globalization of markets and the rise of multinational corporations, the concentration of the global supply chain has become more apparent. In this report, we will examine where the supply chain is mainly concentrated and provide some guidance on how to find better supplier resources.
Global Supply Chain Concentration
The concentration of the global supply chain is primarily driven by factors such as the cost of labor, access to raw materials, and transportation infrastructure. According to a report by the United Nations Conference on Trade and Development (UNCTAD), the top five economies in terms of merchandise trade, namely China, the United States, Germany, Japan, and the Netherlands, account for over 50% of global merchandise trade. This concentration is due to the competitive advantages of these countries in various industries, such as China’s manufacturing industry, the US’s technology and innovation, and Germany’s automobile industry.
In addition to the concentration of the supply chain in certain countries, the supply chain is also concentrated in certain regions within these countries. For example, China’s manufacturing industry is primarily located in the Pearl River Delta and the Yangtze River Delta regions, while the automobile industry in Germany is concentrated in the states of Baden-Württemberg and Bavaria.
Finding Better Supplier Resources
To find better supplier resources, businesses need to take a strategic approach to supplier management. This involves identifying the suppliers’ criticality to the business, assessing their performance, and developing a risk management plan. Here are some strategies to find better supplier resources:
- Diversify your supplier base: Relying on a single supplier can expose your business to supply chain disruptions. By diversifying your supplier base, you can reduce the risk of supply chain disruptions and increase your negotiating power.
- Conduct a supplier audit: A supplier audit is a systematic review of a supplier’s operations to assess their compliance with legal, environmental, and social requirements. By conducting a supplier audit, you can ensure that your suppliers meet your business’s standards and requirements.
- Use technology to improve supply chain visibility: Supply chain visibility is the ability to track the movement of goods, services, and information throughout the supply chain. By using technology, such as radio-frequency identification (RFID) and blockchain, businesses can improve supply chain visibility, increase transparency, and reduce the risk of fraud.
Conclusion
The concentration of the global supply chain is mainly in a few countries and regions, driven by various factors such as labor costs, access to raw materials, and transportation infrastructure. To find better supplier resources, businesses need to take a strategic approach to supplier management, such as diversifying their supplier base, conducting supplier audits, and using technology to improve supply chain visibility. By adopting these strategies, businesses can reduce the risk of supply chain disruptions and improve their overall supply chain performance.
