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Global Supply Chains

Today’s globally economy makes it necessary for businesses to look as far as possible for both the cheapest and the best resources. The benefit of global supply chains is that businesses can take of low-cost goods and services in foreign locations to bring down operating costs. However, when a business depends on outsourcing, it increases the number of risk factors outside of its control. Tsunamis in Japan shut down an auto assembly plant in Ohio when essential parts couldn’t be shipped; severe flooding in Thailand the manufacture of computers for the US market when hard drives failed to appear. Ethical considerations can also be a factor. Even when a firm tries to ensure that the factory owners it contracts with provide fair wages and safe working conditions, still occur, and responsibility is hard to assess. A series of factory fires and disasters killed hundreds of workers in Bangladesh in 2013 and led to the Disney Company canceling the production of its licensed products in that country.

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