International trade logistics

Abstract

Lean supply chain management principles have gained popularity as a result of the globalisation of markets as companies try to minimize wastage and reduce inventory costs and become more competitive in the business environment. These practises call for multiple orders with low batch sizes and thus facilitating lower levels of storage or inventory management, levelled and JIT (just-in-time) production, and accurate transportation scheduling for crossdocking operations, thus creating a more agile supply chain. Also, the companies are in dire need to execute cost cutting measures that has forced many manufacturing and R&D operations to be moved to other nations where the operations are cheaper. This is particularly relevant for firms that are purchasing from low-cost nations. These changes put tremendous pressure to develop a stable and unbroken operational flow, but this also makes them prone to interruptions, increasing the operational and cost effects of supply chain disturbances. Companies are starting to take supply chain interruptions more seriously because more than 56% of businesses experience one every year. It is therefore essential for countries to adopt resilient supply chains and the create plan B for adopt to changes in the global logistics. The onset of COVID-19 has shown us the importance of developing a resilient supply chain particularly for essential goods like food, medicines and vaccines. Disruptions could in the form of political disruptions such as war, breakup or formation of alliances, government schemes, it could also arise from economic conditions like stagflation. Further disruptions can originate from socio-cultural changes, technological advancement, changes in legal paradigm and environmental changes. In this report we shall discuss the various disruptions, that can affect the global supply chain network for essential goods for the G20 countries, the possible causes of disruption and some probable solutions that G20 forum could ponder upon and apply as and when required.