This paper is a critique of the article about “Managing the global supply chain in a time of economic crisis” by Paul Laudicina who happens to be a senior principal with the global consulting firm, AT Kearney. The article is his keynote address at a meeting of global business leaders and this paper attempts to critique his address from a critical view point. The central thesis of the keynote address is that we are living through the most challenging times in terms of economic, political and social upheavals and how well we manage the supply chain in these times would be crucial to the success of the companies involved.
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The speech begins with a description of the current crisis and its effects on the management of the global supply chain of the multinationals. There is a detailed description of the economic crisis and its impact on the world economy. As the speaker puts it, this crisis has made us challenge our assumptions about endless growth and also the fact that we have been ignoring the ecological costs of our way of doing business. There are two themes that run through the address. One is about how the global economic crisis is affecting the ability of businesses worldwide to respond to changing business environment and the other is how to manage the global supply chain when the consumers are demanding the ecological costs of the products being sold to them.
As Paul puts it, consumers are comparing the carbon footprints of the products that are being sold to them and are opting for what he calls “localvores” i.e. goods made from locally sourced ingredients. He gives the example of beans that were made from materials sourced in France and those that were imported from Morocco. Though the price of the latter might be cheaper than the former, the carbon footprint of the ones that were imported from Morocco is definitely higher than the ones that were made locally. Hence, this is an example of the ways in which the companies servicing the global supply chain might be affected due to changing customer preferences borne out of an increased environmental awareness and consciousness. Coupled with the fact that the global economy being in a recession has had a negative impact on the way in which goods are transported, the global transportation sector is indeed in dire straits.
In my opinion, the global economic crisis is like a “paradigm shift” in the ways in which we do business and the effects of this crisis would be felt for years to come. With all shifts in strategy, there is a certain inflection point beyond which the old ways of doing business no longer hold and we have to evolve to adapt. This is the message that the global supply chain companies might well heed if they are to survive the downturn and adapt to the new paradigm.
As the speaker points out, it is all about innovation and collaboration. Firms that can innovate and collaborate with each other have a greater chance of staying in business than the ones that are not nimble enough or agile enough to respond to the changing trends in the industry and in the global economic scenario. It is my contention that each industry passes through these phases and likewise the logistics industry is also passing through such a phase though the global economic crisis has exacerbated the issues that are being faced by this sector.
In conclusion, there are several points in the address that are noteworthy though the speaker is vague about the solutions. The inference here is that he was trying to draw attention to the issues at hand without getting into the “solution mode” as it is called in the corporate parlance. I have enjoyed critiquing the article.
Ball, Donald A., K Michael Geringer, Wendell H. McCullock, Jr., Jeanne M. McNett, and Michael S. Minor.
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International Business. McGraw-Hill Irwin, 2008.