As a result of increased globalization, shifts in costs along with other fundamental operations are taking place at a quick pace that conventional design techniques and supply chain strategies need to be updated. With the enhanced scope of globalization, there is a primary concern to integrate the activities and processes between and across the organization. This is based on evidences and documentation that the base of every challenge lies in fragmented configurations of supply chain. Referring to the topic of “Globalization of the Supplier Base”, this research paper will focus on identifying the key challenges faced by supplier base as a result of increased globalization. Improvement of the overall base of supply and the achievement of increased value is crucial for the value proposition of supply. Effectiveness in the management of supplier, in comparison with the competitors make a contribution of competitive edge in terms of innovation, technology, responsiveness or delivery, quality and cost

1. GLOBALIZATION OF THE SUPPLIERS
Key Challenges and Recommendations

2. Abstract
As a result of increased globalization, shifts in costs along with other fundamental operations
are taking place at a quick pace that conventional design techniques and supply chain
strategies need to be updated. With the enhanced scope of globalization, there is a primary
concern to integrate the activities and processes between and across the organization. This is
based on evidences and documentation that the base of every challenge lies in fragmented
configurations of supply chain.
Referring to the topic of “Globalization of the Supplier Base”, this research paper will focus
on identifying the key challenges faced by supplier base as a result of increased globalization.
Improvement of the overall base of supply and the achievement of increased value is crucial
for the value proposition of supply. Effectiveness in the management of supplier, in
comparison with the competitors make a contribution of competitive edge in terms of
innovation, technology, responsiveness or delivery, quality and cost.

3. Table of Contents
Abstract......................................................................................................................................0
Introduction................................................................................................................................3
Literature Review.......................................................................................................................3
Globalization of Supplier Base ..............................................................................................3
Challenges for Supplier Base.................................................................................................4
Improving Supply Chain Management in Complex Global Environment ............................6
Conclusion .................................................................................................................................7
References..................................................................................................................................9

4. Introduction
The current global market platform can be considered as extremely volatile. Like financial
markets and economies, as there has been an increased interconnection and globalization of
supply chains, there has been an increased exposure towards disruptions and shocks. The
speed of supply chain only results in exacerbating this issue (Carter et al., 2007). Even minor
miscalculations and missteps can result in having major impacts spreading significantly in the
entire complex network of supply chain. Major challenges rise as with increased
globalization, there is an increased connection between the supply chains.
Referring to the topic of “Globalization of the Supplier Base”, this research paper will focus
on identifying the key challenges faced by supplier base as a result of increased globalization.
A detailed literature review will be presented based on which there can be an enhanced future
in the effectiveness of supply management. As per this evaluation, key points of conclusion
will be drafted.
Literature Review
Globalization of Supplier Base
As there is globalization of business organization, processes of operations like management
of supply chain are globalized as well. There is globalization of supply chain for meeting the
dynamic and changing needs of new customer segments and global markets, for balancing the
risks caused due to political and economic uncertainties, and for management of complexity
related to costs (Sandström, 2011).
In the typical sense, business organizations have been gaining connectivity with the base of
supplier by the use of several sources. While majority of the business organization have been
working directly with the base of supplier via email and phone communication, there can also

5. be networking with the involvement of partners by the in- house portal based on the web
(Mattsson, 2003).
In addition to this, initiatives taken for the implementation and execution of segmentation
programme related to supply chain, there must be a regular involvement of enhanced
optimization in distribution and sourcing. This delivers improved planning for fulfilling
procedures, better demand planning and decision making, and better management across the
in- transit shipment and global suppliers (Carter et al., 2007). All of these elements have been
supporting the globalization of supplier base. Suppliers covering different areas of expertise
and technical skills, followed by diverse interactions across different market base of
customer, often have a better position in spotting leading trends and leveraging or developing
with the emergence of technology.
For the achievement of effective performance and integration of supply chain with suppliers
outsourced, major emphasis must be laid upon external and internal core competencies. This
involves minor to major details about the suppliers while identifying their overall capability
for maintaining or enhancing the performance and integration of supply chain (Thomsen,
2005). In this context, the decisions of outsourcing affects the footprint of the base of supply,
while impacting the core competencies of suppliers for meeting the requirements of
customers such as goals of sustainability, technology, quality, on- time delivery,
responsiveness, and cost. The overall architecture of supply chain can be impacted by the
same.
Challenges for Supplier Base
As a result of increased globalization, shifts in costs along with other fundamental operations
are taking place at a quick pace that conventional design techniques and supply chain
strategies need to be updated. There can be arise of governance structures primarily

6. responding to 2 different necessities for coordination (Sawchuck, 2007). This governance
further provides the ability to an organization for determining or influencing the activities of
other organizations within the base of supplier. This impact can extend the need to define the
products in production of the suppliers, and there is a specification of using standards and
processes (Sandström, 2011). This scenario increases the need for involving technical support
to the base of supplier, for enhancing their competence to achieve the performance required.
Poorly transitioned work for outsourcing suppliers can result in impacting both, linkage and
alignment over an extended duration of time. Because of incorrect or inadequate information
with respect to transitioned processes and requirement, there may never be a fill resolution of
issues related to integration (Carter et al., 2007).
With the enhanced scope of globalization, there is a primary concern to integrate the
activities and processes between and across the organization. This is based on evidences and
documentation that the base of every challenge lies in fragmented configurations of supply
chain (Thomsen, 2005).
As a significant example, the economic and financial turmoil since recent period has hit a
number of business organizations severely, but most affected sector is the automobile
industry. In particular, the suppliers are dealing with intense pressure of cost, as they are
forced for looking at new patters of low- cost to manufacture and source. However, it has
been identified that suppliers may fail in devising integrated strategies based on location, for
embracing cost and risk, in the longer run, they may face failure. Majority of the suppliers
who make major investment are primarily driven by consideration of cost and growth
(Mattsson, 2003). Only in some cases, these investments tended to be forming an integrated
strategy while embracing each and every driver of globalization. This involves the key aim

7. for development of balanced footprint across the globe while showing resilience to the
conditions involving change.
In general, suppliers responsible for production of products specifically for the customer are
within maximum scope of dealing with issues such as pressure from client, while suppliers
dealing with global commodity involve maintenance of quality and consideration of cost as
major challenges (Lester, 2004).
Hence, it can be stated that even though globalization introduces a number of opportunities
for supplier base, it also exposes a number of challenges.
Improving Supply Chain Management in Complex Global Environment
Improvement of the overall base of supply and the achievement of increased value is crucial
for the value proposition of supply. Effectiveness in the management of supplier, in
comparison with the competitors make a contribution of competitive edge in terms of
innovation, technology, responsiveness or delivery, quality and cost (Sandström, 2011).
For dealing with these challenges, there can be an establishment of strategy for development
of supplier. Strategies focusing on supplier like reduction of supply base, contracting on
longer terms, enhanced volume to the supplier base, and practices of negotiation have
resulted in reductions of cost and price (Sawchuck, 2007). In the years to come, segmenting
the supplier, sourcing the emerging market platform, involve the major requirement of
supplier contribution in enhancement of innovation and reduction of cost. This may enable
the improvement of working relationships with the base of suppliers while laying major
emphasis (Carter et al., 2007).
Further ahead, the base of supply can be shrunken. Although there has been a reduction of
supply bases, organizations indicate additional reductions in suppliers delivering goods
directly by 51 per cent and suppliers delivering goods indirectly by 77 per cent. This is the

8. scenario as organizations have been continuously segmenting and identifying the most
significant future suppliers (Carter et al., 2007).
Further ahead, there can be an establishment of capabilities within the network of supply. In
addition to this, effective management of supplier involves major attention on the
establishment of accurate suppliers based on the future or current capabilities required for
supporting the markets and operations of the organizations (Carter et al., 2007). There must
be a clear specification of the roles played by supplier.
Value can be gained out of the established strategic relationships. Improvement of working
relationships with the base of suppliers can also be considered as a significant future strategy,
having a significant variation in the future significance and current implementation. For the
achievement of differentiated value from the key suppliers, organizational will have to lay
emphasis on the achievement of position related to the customers preferred (Carter et al.,
2007). This involves the need for change initiation in the stream of processes at work for
interfacing the suppliers and the buyers, and bringing modification in human behaviour.
In the basic sense, organizations have started to understand the need to gain connectivity with
the base of supplier by the involvement and consideration of several sources. While majority
of the organizations perform direct work with the base of supplier using traditional sources of
communication, networking can be considered as significant with the involvement of partners
by the in- house portal based on the web (Sawchuck, 2007). These recommendations may
provide a better scope of success for supplier base in the increased level of globalization.
Conclusion
The growing interdependence of supply chain and globalization have resulted in heightening
the levels of vulnerability and volatility without being subsided, and hence, the key norm for

9. base of suppliers is uncertainty. There is major demand of modifications in the supply chain
for enhancing the scope of survival in the new global environment. This increases the need to
identify and eliminate the challenges faced by supplier base as a result of globalization. In the
general sense, there has to be a clear understanding about the business environment, while
having a broader view in the external risks, along with the ability of holistic management in
producing optimal results (Thomsen, 2005). Since the networks of supply chain are never the
responsibility of a specific decision maker or stakeholder, there is a major need for initiating
collaboration. All of the suppliers are to be managed with significant skills of stakeholder
management and negotiation for complementing the expertise of supply chain and the
knowledge of market.

10. References
Carter, P. L., Carter, J. R., Monczka, R. M., Blascovich, J. D., Slaight, T. H., and Markham,
W. J. (2007). Succeeding in a dynamic world: Supply management in the decade
ahead. Institute for Supply Management and WP Carey School of Business at Arizona
State University.
Lester, R. K. (2004). The new global supply-base: new challenges for local suppliers in East
Asia. Global production networking and technological change in East Asia, 476, 35.
Mattsson, L. G. (2003). Reorganization of distribution in globalization of markets: the
dynamic context of supply chain management. Supply Chain Management: An
International Journal, 8(5), 416-426.
Sandström, J. (2011). Stakeholder theory and globalization: The challenges of power and
responsibility. Organization Studies, 32(4), 473-488.
Sawchuck, C. (2007). Understanding World-Class Procurement... and the Foundational
Practices That Drive Performance,”. The Hackett Group.
Thomsen, L. (2005). New challenges for developing country suppliers in global clothing
chains: a comparative European perspective. World development, 33(3), 409-430.