Bowersox’ Perspectives on the Benefits and Vulnerabilities of Globalization
When one takes the time to think about it, the ability for modern logistics systems to be able to deliver goods quite literally to any corner of the globe with the utmost of speed and accuracy is in itself nothing short of amazing.
Although this system of what is today referred to as supply chain globalization has never been as efficient and rapid as it is today (Lewer & VanDenBerg, 2007), it is in fact a process which had its earliest roots in the emergence of transportation and communication technology in last one hundred plus years, and is more challenging than ever, not only due to increased demand for globalization in logistics, but also due to increasing international challenges, issues and tensions (Helferich & Cook, 2002).
This research will focus on varying perspectives on logistics globalization; ultimately, a much better understanding of this complex topic will be gained. Bowersox’ Perspectives on the Benefits and Vulnerabilities of Globalization Regarding logistics globalization and the many facets of it, Donald Bowersox has over the years developed a reputation as one of the leading scholars on the topic. His many articles and books on the global supply chain have been recognized time and time again as some of the foremost literature on the topic.
For this reason, Bowersox’s perspectives on both the benefits and vulnerabilities of globalization will be presented in this research and discussed at length. To begin, Bowersox makes the case not only for the development of globalization but also the necessity of it. This point is initially made by his assertion, or more precisely his finding based on research, that since the 1990s, the number of international business transactions has literally tripled, which has taken place for a variety of reasons.
The proliferation of instant communication methods has expanded the opportunities to transact business from anywhere on earth to anywhere else in the blink of an eye. As such, commerce in the exchange of actual tangible goods in exchange for money from one nation or continent to another has not only become much more commonplace, but more frequent as well (Bowersox, 1998). In response to such activity, global supply chains have been forced to evolve and grow at an unbelievable pace, presenting both the possibilities and problems that will now be discussed.
According to Bowersox’s extensive and conclusive studies on the topic of globalized supply chains and their management, on the most fundamental level, the expansion of product distribution from a local/regional to international scope has of course opened up vast amounts of business opportunities for companies ranging from the small, niche type businesses of the world which offer unique products that are hard to find anywhere else to the massive companies that find that international distribution is much more of a good thing, as they are able to expand their footprint and presence beyond the borders of their home nation to literally any market that would be chosen in any part of the world.
Thus, what is seen on the base level of global distribution systems is an equal opportunity for firms large and small to tap into entirely new markets, and all indications are that the possibilities to do so in the future are endless, especially given the creativity and innovation of the businesses of the world, as more products will have opportunities to travel across the globe. As companies large and small expand their presence through the proper utilization of global distribution systems, in addition to the revenues that these companies derive from the business activity, Bowersox also makes the point that increased business of this nature eventually provides benefits to the nations that are involved in these global transactions in the form of tax revenue, trade tariffs, fees, etc.
In many cases, this revenue is used by the nations that collect it to improve infrastructure as well as other benefits that eventually serve the interests of all of the citizens of the given nation (Bowersox, 2006). In such a situation, it can fairly be said that globalization is of benefit to those outside of the established supply chain as well. One particularly interesting term that Bowersox uses in his discussions of the positive elements of global supply chains is logistical renaissance. What he means by this, and in fact reveals another positive element of globalization of supply chains in explaining, is that the efficiency and rapidity of international distribution of products had made it possible not only for the manufacturers of products as well as the buyers of those products to benefit greatly from the easy and swift availability of products.
For example, if the maker of the proverbial widget is able to deliver product to anywhere in the world within a day or two, or perhaps even within a few hours in some cases, the manufacturers are able to keep less inventory on hand, not only saving on the costs involved in the storage and excessive handling of products, but also making it possible for less capital to be tied up in finished product as well as excessive production, which of course can also result in excess inventory or lack of one product being available because too much emphasis was put on producing another item. Likewise, the buyer of the products can avoid tying up too much money in unnecessary inventory, storage and handling if they are in fact able to get the quantity of product that they need, delivered to them almost instantly, via highly efficient international channels of distribution.
What is seen is a win-win situation for seller and buyer alike. Just as there are benefits to global supply chains as Bowersox identifies them, there are also vulnerabilities that need to be acknowledged as well. First, Bowersox concedes that the very assets that make rapid global distribution possible also make it a nightmare at times. For example, the ability to keep inventory levels extremely low, or even non-existent because of the reliability of rapid international distribution can backfire quite quickly in the situations when communication or distribution channels malfunction, making product unavailable at critical moments, which in the final analysis can do far more harm than good.
Yet another vulnerability that Bowersox cites in his research when considering a globalization of logistics functions is an essential loss of control of business processes on the part of the executives of a given organization, as many of the things which the managers are able to actually control hands-on when operations are taking place in their own geographic area often have to be delegated to third parties in another part of the world, leaving a great deal of the execution of strategy and tactics not only out of the control of those who are responsible for performance metrics, but also giving that control to others who may not have the best interests of their clients at heart (Bowersox, 2006). Lastly, Bowersox cites legal difficulties as substantial possible obstacles in global supply management, as the laws of one nation in regard to trade and transportation are often vastly different in another nation. As such, when two nations are engaged in international exchange of goods, regulatory differences can adversely affect business operations (Bowersox, 1998). Contrasting Views to Bowersox
While Bowersox certainly makes some very compelling and valid points, there are contrasting views to Bowersox that are just as significant to keep in mind and also add a great deal to the discussion of global supply chains. One of those which Bowersox does not emphasize, but needs emphasis, is the issue of the security of global supply chains. For globalized supply chains, and indeed many other aspects of everyday life, the terrorist acts of September 11, 2001 proved to the world just how quickly the rapid transportation systems of the world can come to a screeching halt, as across the globe, aircraft were stopped from flying on that deadly day, as suspicion of a worldwide plot needed to be explored before business could in fact continue as usual.
What this illustrated was very important points about globalization- the same attributes that make it possible can also stop international business dead in its tracks. In this scenario, the terrorist in fact has the unique and frightening power to hold a great deal of the international economy as a hostage (Larner & Walters, 2004). Therefore, it is critically important as distribution becomes more and more globalized for it to become more secure as well. In fact, there is also some contrasting information to Bowersox which establishes the fact that there is a noticeable absence of security as well as disaster preparedness on the part of international distribution systems (Helferich & Cook, 2002).
This finding also shows that forces of nature can be just as damaging as those of man in terms of being able to essentially cripple the distribution systems of the world, which in fact is a screaming indication that there needs to be improvements to protect globalized distribution as well as to grow it. In response to the demands being made for better protection of international supply chains, the argument is effectively made that there is room for the supply chains to be safe, growing, and profitable (Samli, 2002). What this will require, however, is the cooperation of the nations of the world, and in many cases, there is widespread objection to globalization, as many see it as the first step toward the spinning out of control of the economy of the world. Therefore, yet another challenge lies in fostering the type of global growth that does not consume the nations which embrace it in the process. Conclusion
What have been seen in this research are the potential, profitability and challenges of the globalization of the supply chain. With all of this in mind, what can fairly be said in conclusion is that globalization holds the power to enrich or destroy the world economy, raising the challenge of maintaining a proper system to all of the nations of the world. No nation, terrorist, or special interest group should be allowed to disrupt this progress, and if such progress can continue unhampered, the entire world will surely benefit. Bibliography Bowersox, Donald & Calantone, Donald (1998). Global Logistics. Journal of International Marketing, Vol. 6, No. 4, 83-93.
Bowersox, Donald (2006). Supply Chain Logistics Management. New York:McGraw Hill. Helferich, Omar & Cook, Robert (2002). Securing the Supply Chain. Oak Brook, IL: Council of Logistics Management. Larner, W. & Walters, W. (Eds. ). (2004). Global Governmentality: Governing International Spaces. New York: Routledge. Lewer, J. J. , & Van Den Berg, H. (2007). Religion and International Trade: Does the Sharing of a Religious Culture Facilitate the Formation of Trade Networks? The American Journal of Economics and Sociology, 66(4), 765+. Samli, A. C. (2002). In Search of an Equitable, Sustainable Globalization: The Bittersweet Dilemma. Westport, CT: Quorum Books.Sample Essay of EduBirdie.com