Postgraduate Transfer Credit

Global Supply Chain

Student:
Draghiciu Mihaela

Rennes 2016
 1. What is Globalization?

Globalization represents the process through which national and regional economies, societies
and cultures are integrated through the global network of trade, communication, immigration and
transportation. (source: Financial Times)
There are many definitions of globalization, but the reason why I have selected this one is because
I believe that this express the best the implications of today subject in a simplistic way and in order
that everybody could understand specifically what is about in this phenomenon.
2. Which are the major forces behind Globalization?
In the worldwide thinking Globalization has represented often a vague subject and people were
starting to overuse this term for every transformation, innovation or discovery that have been made
in the recent years. For this reason, I have found four major forces which are driving before
globalization in order to understand more deeply this subject.
Science and Technology
The first major driving force behind the globalization is given by the progress of Science and
Technology. The fact that in the last past years since especially since the Internet has been
introduced in the daily life of people, the speed to which the evolution of new thing and technology
was changing has reached unimaginable scales.
The development of communication and information technologies has led to an intense
collaboration and relation between people all over the world through satellite communication,
mobile phones, faxes and especially the internet has driven to the development of globalization.
Also, with the information flowing and interconnected relations worldwide, had brought a great
awareness over different cultures and influences from all over the world.
Moreover, the impact of Science and Technology over the quality standards of human lifes made
the world more comfortable and easier for us along with a better life expectancy and preventing
diseases. Still, this overrun from the last years of technology brought also negative impacts like
highly toxic wastes, pollution and destruction of the natural environment.
Political changes and impacts
Political changes especially after the 2nd World War represented an important factor for
globalization to develop more and more worldwide. The rapid growth of international
organizations has helped at the development of the commerce and trade and also for technological
innovation on a global scale which led to a rapid growth of economies.
In fact, the way that political party has on Globalization is reflected in the regional types of
government. The collapse of the communism has opened the process of globalization, and for the
countries which still have a strict political regime, globalization managed to widen their horizons
and to become more integrated with the world (for example China).
Also, the political policies that every and each country has, can influence the development of
Globalization alongside influences over the migration of labor. The social layer gap between rich
and poor people worldwide, have led to an accelerated migration which brought a wide cultural
diversity among states that at the end could lead to national identity conflicts, like for example the
European refugees crisis.

Trade and commerce

Trade and Commerce represents another important driving force behind globalization.
Trade represents a key tool for the movement of the goods and services worldwide and for
technological transfer, which connects domestic market to the international market.
Trade and commerce impacted Globalization due to the fact that regular exchange of goods and
services were worldwide internationally, and also, trade removed several barriers regarding the
cost and protection of the trade. In this way, foreign goods and services can compete with the
domestic ones, companies can have access to a broader range of suppliers, retailers, consumers
and labor force, so it increased the competitively of the firms and offered them ways of reaching
economies of scale. The negative part of this situation is that, the general competitivity increases,
so the firms must be able to gain a competitive advantage or to find a way of keeping pace with
the world.
Trade has also impact on the people life, giving them access to a wide range of diversified products
from all over the world, and to create a complex economic and social link between people around
the world.
Moreover, trade does not have the same effect all over the world. For example, the less developed
countries are becoming dependent of some products sold on world market, which means that they
have a high rate of vulnerability in prices shifting and technological changes.
Social impact
Without doubt an important driving force of the Globalization is the social progress and awareness.
People starting at a certain point to have access to education more easily, and became particularly
interested of other cultures once with the expansion of the technology. The fact that people were
not only able but willing to travel all over the world has changed the patterns and the movement
of people influenced greatly the concept of Globalization.
Moreover, the need of people to communicate at a global scale not only that improved the lifestyle
of people, but also affected businesses. Where in other times partners from different countries
never know about each other, once with the migration of people, business partnerships were
starting to build up.
 3. What are the consequences for SC organization?
Globalization have forced companies to become more efficient by creating infrastructure and
building competitive advantage.
For a SC organization, Globalization came both with advantages and disadvantages.
First, the companies can take advantage of the lower or no tariffs areas, rules and regulation
alongside with standards and procedures for new trade zones. Also, the fact that almost everything
became global today, companies can also find cheap ways of transportation when is the case (for
example using a mix of ways of transportation for a better profit margin).
Another advantage for a SC company is given by the access to newer technology which can allow
them to work more efficient thanks to certain software programs which keep pace with the
inventory or which can calculate the fastest and cheapest way of distribution.
In what regards the disadvantages, an important consequence of globalization over the SC
organizations is given by the fact that those organizations have to become more flexible and more
adaptable for taking a high volume of work because nowadays, in this globalization context,
multinational customers are looking to consolidate the logistic suppliers down to just a few
partners that might have local expertize and that can coincide with their type of business. Also,
these companies want to have logistic partners that have international expertize in all facets,
starting from the plant until the end customers.
Moreover, as a SC organization, being able to keep pace with all the customers requirements
means that the talent acquisition and retention of the right employees represents the best smart
thing to do for the organization. Employees must have the ability to relate to interpersonal
relationships and to cultural differences, apart from their skills. The fact that globalization has open
borders for the movement of the people also, means that specialized employees are hard to keep
inside the company.

Even though Globalization has brought a substantial opportunity for business development in an
SC organization, on the other hand, those consequences also forced them to adapt and diversify,
so as to keep pace with the requirements of the customer, in the context to which, the right
employees for the right job is hard to keep in the company.