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  July 15th, 2022 | Written by

How Globalization Impacts Supply Chain Management

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The world is a smaller place than it was 20 years ago.
As the internet gets faster and businesses increasingly rely on the web, international markets are proving to be a new source of both customers and goods. Globalization is here, and it wouldn’t work without supply chains.

Different areas of the world are more suited to producing certain goods and services. Customer help centers have long since outsourced to India or Mexico, specialty foods from Latin America
and the Mediterranean are in high demand, and tech companies are in need of microelectronics from every corner of the globe.

Covid-19 taught us that supply chains are integral to a global market and losing them harms multiple industries in numerous ways. In a world where cost effectiveness was king, just-in-time supply chains didn’t provide enough surplus to keep these industries running smoothly. These supply chains were long in development, whether it was for cheaper manufacturing or high skill part fabrication.

Every global industry took note, and supply chain management is changing. Risk management and surplus demand are now more important than cost efficiency, and many companies are using expat services to put their own employees at supply chain sources to ensure they are working as expected. The global supply is changing, and globalization is impacting supply chains like never before. Here are the pros and cons.

New Customers and Increased Competition

The global market offers companies the options to find new customers and further the growth of their company. Every product has an audience, and even products that may not be popular in one region will be in high demand in another. Globalization offers companies new customers to market to, but it also comes with a catch: more competition. Yet just like you are looking for new customer bases, new regions already have companies that know their audience, and are after yours. If you’re confident in your product or service, moving to a new area can provide a strong boost in sales, but know that there are players already there that have their eye on the prize.

Expanded Sources and Increase Supply Chain Complexity

When you make a product or offer a service in a globalized world, you often rely on suppliers abroad or labor from other countries. If you run a ride share service, you need to connect with locals to operate your ventures. If you’re building a new smart device, you need a company who knows the intricacies of creating miniature screens. If you’re in the manufacturing business and you need steel parts, it’s often cheaper to build the part at the source of the steel instead of shipping the raw materials.

Globalization and international supply chains make this possible, albeit complex. If you can manage to plan out multiple supply chains, you can make the best product at the cheapest price, but know that breakdowns happen, and it’s best to plan ahead.

Better Opportunities and More Legal Issues

There are more people in the world than there are in your country, so when your company or business goes global, your opportunities do too. Whether you’re looking for experts in a certain field, or a new supplier with greater access to a needed material, the chances of you finding a great source at a lower price increase drastically. Looking internationally also serves as a way to increase your perspective and talent pool.

Just know that when you start to operate in other countries, you will by necessity have to understand their legal system. Every country is unique and progresses at different speeds and in different directions, and dodging legal issues can become difficult and costly. It’s best to hire legal advice to avoid this.

Diverse Demands and Complicated Demographics

Some regions have access to goods that simply are not available in your region. While most of the world has enjoyed imported goods for decades, demand is increasing while buying power isn’t. Having a well established supply chain can slowly lower costs while providing diverse interests with diverse options at a more competitive price.

Knowing what your new customers want, however, is not as straightforward. Data collection is more important than ever before if you want to get the right product to the right people, but local
experts are usually needed in order to understand foreign populations. Make sure to do plenty of data collection before investing in an international venture that may not turn a profit.


The world is a diverse place of many different people wanting different things. Do you bring the same service to distant shores, or design something else for a new customer base? Globalization is changing the way we do business and how we supply the businesses we already have. The risk is always present, but the opportunities available in foreign markets and with foreign suppliers are massive. They cannot be ignored in a connected world.