18.4 Participants in the global supply chain
There are a number of participants in the global supply chain.
Consumers
Consumers have an important role in the global supply chain. Consumers tend to purchase products and services from companies which are often based in another country. The growth of the global economy and increased access to online shopping means that consumers are increasingly purchasing products from overseas.
Producers
Production at all stages of a good or service has become increasingly complex as more companies are sourcing resources from all over the world. This means that producers have to ensure that they are clear about where resources are coming from and develop reliable suppliers and distributors of their products. This is complicated by the increasing role of consumers in demanding quality products and services at a reasonable price.
Consumers are also demanding companies be socially responsible and not negatively affect the environment or a country. Companies have to manage these expectations.
Employees (workers)
More organisations are managing employees and workforces in different countries. This means that the management of employees has become complicated as there are different rules, laws and regulations covering employees depending on the country the company or department is based in.
Added to this is the fact that different cultures have different norms and ways of working. Managers need to understand and be able to adapt to the different needs of their workforce.
Governments
Governments need to ensure that the laws in place are complied with. They also need to manage companies and corporations that may be based in another country. Ensuring jobs in Australia are protected and that consumers are receiving quality products and services are also considerations.
DEVELOPING YOUR UNDERSTANDING 18.3
Read the extract and answer the questions below.
Small and medium-sized businesses in Vietnam have to make more efforts to improve their competitiveness in the global supply chain, a workshop in Ho Chi Minh City heard today. The deputy director stated that Vietnam was integrating into the world economy and having a presence in the global supply chain was important.
He also stated that there were limitations on business performance due to a lack of vision and strategy and a lack of resources. Most companies were on the ‘lowest rung’ of the supply chain and were completing assembly for foreign companies. It was argued that Vietnamese businesses need to improve their competitiveness and invest in areas such as supplying raw materials, improving technology and co-operating with foreign partners.
Source 18.12 Extract based on the article ‘Firms aim to join global supply chain’
- Suggest why it is important for businesses in Vietnam to improve their competitiveness.
- Explain what the phrase ‘lowest rung’ of the supply chain means.