Global supply chain optimization

Abstract

Globalization has been widely acknowledged as the quintessential phenomenon describing the present generation. With the opening of markets across the world, the classical dilemma of ‘(producing) the right products in the right quantities (at the right place) at the right moment at minimal cost’ attains high importance. While, a lot of companies fail in the global arena because of inability to achieve globally-acceptable standards, a number of companies also fail because of inability to configure global manufacturing plants and markets. This has forced companies to develop competitive strategies to gain a sustainable advantage in the global arena. Global supply chain management, based on enhanced integration of suppliers and customers as well as increased co-ordination across multiple value-adding processes within the firm (MacCormack et al., 1994; Ohmae, 1995), has emerged as one such strategy. The following study is aimed at creating an optimization model for the global supply chain of a multinational enterprise. The model was created using supporting data from John Deere, which also helped in enhancing our understanding of the entire problem. Further, the model also incorporates a forward-looking analysis to mitigate the uncertainties caused by factors such as demand variations and exchange-rate fluctuations.