Global Supply Chain 101: What You Should Know

Date: December 17, 2014

Global Supply Chain 101: What You Should Know

The importance of Global Sourcing Process in Global Supply Chain Cycle

Wondering how the global supply chain works? This article provides information for a general global supply-chain process, from sourcing suppliers until the goods reach the customer. If you’re just starting a business, this will serve as a guide before you jump into the e-commerce and retail business.

Global sourcing is widely practiced by overseas companies, allowing them to source suppliers, labor, talent or products from some top sourcing destinations, especially from Asian regions such as China and Vietnam, because such sourcing can be highly cost efficient and promotes product differentiation and innovation.

Do you want to import t-shirts or fashionable items such as dresses, handbags, and accessories? How about consumer electronics or even large-scale items like furniture? Here are the four phases in the global supply chain:

Global sourcing process

The first stage in the global supply chain is crucial in terms of sourcing suppliers globally. The Internet is one of the most powerful tools in scouting supply leads and connections, whether you use an e-sourcing platform, such as Tradegood, or opt for a DIY (do-it-yourself) method by using search-engine platforms and professional social networks.

The former, however, can provide you with better leads because you will be connected with thousands of verified suppliers. Meanwhile, the latter can be time-consuming and doesn’t guarantee that all supply leads or connections are credible. In the end, you must also consider the cost of sourcing, transportation and production.


Manufacturing and transit

Assuming you have found your supplier(s) or manufacturer(s), the manufacturing process takes over and the lead-time will depend on the agreement you made with your contact. It’s best to do follow-up at this stage to monitor the progress of the production.

This process also includes the detailed factory production workflow that your contact should submit—a mandatory timeline of the process. Other buyers work with buying agents or use e-sourcing platforms. They let them handle and monitor the production process, including quality control and warehousing, until the items are ready for shipment.

In-house warehousing and inventory process

Once the items are shipped to your location, the inventory is checked and processed prior to distribution to your wholesalers, retailers, or end-users (customers). The process includes not just the receiving of items, but also the temporary storage, labeling, and return of items to the manufacturer in the event of damaged items.

Distribution and selling channels

The distribution and selling depends on your business model, whether you’re selling items using e-commerce solutions, in-house bricks-and-mortar store, or cross channeling distribution, meaning you’re using both methods.

The takeaway and recommendations

This therefore is the general global supply chain. The first stage—the global sourcing process—is the most important among the processes as you search for suppliers and manufacturers in different regions.

If you haven’t tried e-sourcing, you can check the Tradegood suppliers’ directory pages as your launch pad for research and references to Asian suppliers. 

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