International Trade and Global Supply Chain

Questions to think about:

Why supply chain matters in the 21st century global economy?

What benefits a global supply chain can bring to us?

 What unique risks are involved in a global supply chain?

What role the government and policies can play in facilitating the global supply chain?

Are you prepared to embrace the concept of “made in the world”?

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Author: Sheng Lu

Professor @ University of Delaware

15 thoughts on “International Trade and Global Supply Chain”

  1. It was really interesting to see the all the different countries (both rich and poor) and how they were a curcial part of the supply chain.

  2. I found this video to be very helpful in understanding trade agreements and how the supply chain works. I didn’t realize that there were so many different countries that contribute to the production of one particular good. Overall I found this video fascinating.

  3. I definitely think that the supply chain is becoming such a vital tool for businesses due to the ease and decreased price of communication. Since we are able to have instantaneous connections in almost all aspects of business, every country, company and individual affects the global economy and supply chain. I believe that if every country is able to use their individual resources to produce a final product it will benefit the global economy as a whole. This gives many different countries an opportunity to produce/make or create products for which they have a comparative advantage .

    Although specialization has positive affects on the economy and supply chain there are inherent risks. If there is an international disaster in an area connected to the global supply chain, the whole system would be in shambles. That could potentially cause a spike in prices. Another potential problem is having interconnected businesses in countries with fundamentally different policies. The rules of bureaucracy can have negative affects on lead times, as well as hoops companies have to jump through for health and safety regulations. Without a standardized set of policies for international trading it can be difficult to work within this global supply chain.

    I do feel that the positives outweigh the potential negatives associated with the emerging global supply chain. The bigger the risk the bigger reward, and hopefully they can cut some of this red tape and make it easier for everyone to trade and make profits.

    1. Good thoughts. One reminder from the video is that globalization changes the way the business is done. Globalization requires company (as well as individual like us) to think about how to best possibly take advantage of the resources around the world. Global-based business also posts new challenges for policy makers. for example, in the old days the government might want to restrict imports so as to protect the domestic industry. However, in the 21st century when companies rely on the global supply chain to compete, we need to rethink about whether trade restriction (such as high tariffs or complicated customs procedures) really work or not. So globalization is related to all of us, individual, company and the government.

  4. I thought this video was very interesting. I have always known that a lot of different hands go into the making of one product but I did not realize the amount of labor that comes together from different countries. Even though there are potential negatives that go into implementing a supply chain this big, there are risks in everything. Not only is this good for us fiscally wise, but it is mostly good for these countries as this is what is stimulating their economy.

  5. Agreeing with most of the other comments, I thought this video was interesting. Seeing how so many countries are apart of one single production. It really makes you notice how important our supply chain is and how globalization will always be a factor in the fashion industry. I thought it was interesting what Michael said and I agree with him that if certain countries used more of their individual resources to produce the product they are making, it could benefit the global economy more so.

  6. Hearing so much about globalization throughout this course this semester has made me more and more interested about the topic. I always knew there was offshore production, thanks to labels telling me where my product came from, but I did not know the extent of it. I was never fully aware about what was mentioned in this video above. This video showing the positive aspects of globalization but also some risks, now has me thinking in different ways about globalization. I feel that having production centers for different parts of a product is a smart idea, and probably makes for a faster production process, but I never considered the thought of a natural disaster. The idea that one country cannot get something done preventing the products from being distributed and completed, poses a problem. Globalization should stay as is because it does seem very effective how it has been. There is no way to predict what disaster will occur where, but you just have to wait and see what happens. A solution could potentially be having multiple production factories in countries, but for different parts of a product so that if one country making that part is unable too, the product is not left unfinished, instead it is being handled in another factory somewhere else.

  7. Agreeing with the other comments, I also never fully realized the number of countries a single product might have come from before being sold. Globalization is important for the world economy, but as we saw in the third case study varying trade policies can make it difficult. When foreign countries impose tariffs or unnecessary blocks on imports or exports, it impedes the global supply chain. Governments need to work together to keep free trade and the global supply chain flowing. Consumers, manufacturers, and corporations can all benefit from this because it helps to keep costs down.

  8. The global supply chain matters because it helps manufacturers reduce price. But a risk can mean any delay in production in one country delays the entire production. Another risk is when safety regulations are not followed in certain countries it can be hazardous to workers. Trade barriers are a big hinderance to supply chains, if the government wants to facilitate a global supply chain they need to create a system conducive to free trade and a global supply chain.
    I also that this video touches on the auto industry and how it is global like textile and apparel production. Personally, I am willing to embrace ‘world made’ goods and think there is no avoiding it but I have a special fondness for Made in the USA goods and will pay a higher price for them.

  9. I found this video to be very interesting and I think that supply chain management is very vital to the production process. The international supply chain allows stages of production to made in several different countries, which is the reason why global trade has grown so fast. Supply chain allows poor countries to start manufacturing their goods for the global market at a reasonable cost which is very beneficial for them. By locating activities in countries where lower costs of living that means labor costs are low or in countries where raw materials are located the total cost of production can then be reduced. This helps companies create new or better products without raising the price paid by consumers. Although there are some great benefits from this there are also some risks which are if there are countries that are a part of the supply chain experiences a natural disaster then a delay in production in that country affects activities further down the supply chain. It doesn’t only effect the production of the product but the immediate goods as well. This process is important because it involves the production and distribution of a product, although it will help with trade it is also risky at the same time because all these sectors relate to one another and if their is a problem with one whether it is the manufacturer or another part then it will mess up the rest of the process. I feel that the economy benefits globally from the supply chain because it overall helps to reduce the production cost of goods which is always something beneficial because your saving a lot of money.

    1. ok, so if “made in the world” is a popular business model in the 21st century, is rules of origin (such as the yarn-forward) still needed? Why or why not?

  10. I found this video to be very interesting. When looking at the automotive business of the video, the supply chain is so intricate and dependent on numerous countries of the construction of a vehicle. I knew different countries manufactured different parts of cars and they were assembled in one place, but I had no idea it was to this extent. As mentioned in the video, if a country suffered from a natural disaster which leads to production of parts coming to a halt, risks become high when it comes to production and assembly. Although there are many great benefits from the process of parts being made in different countries, the risks outweigh them. In the end, consumers will not be able to get the products they desire. In my opinion, I feel that vehicle parts should be produced and assembled in a few countries rather than a vast amount to reduce the risk of this happening.

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