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Global Supply Chains

Definition

A global supply chain refers to the network of individuals, organizations, resources, activities and technology involved in the production and sale of a product worldwide. It involves steps from sourcing raw materials to delivering the final product to consumers.

Analogy

Think of a global supply chain as an international relay race. Each country is like a runner who specializes in one part of the race (or one step in creating a product). The baton (or goods) passes from one country to another until it reaches the finish line (the consumer).

Related terms

Supply Chain Management: This is the oversight of materials, information, and finances as they move from supplier to manufacturer to wholesaler to retailer to consumer within this 'relay race'.

Outsourcing: This is when companies delegate some parts of their processes or services (like manufacturing or customer service) to other companies, often overseas. It's like if a runner in our relay race outsources his running segment to someone else who can run that part faster or cheaper.

Trade Barriers: These are government-imposed restrictions on trade between nations - imagine hurdles placed on our relay track that make passing the baton more difficult.