Global Supply Chain Structure and Operation

By their very nature, global supply chains are both extended and complex and usually require all the major modes (and sometimes minor modes) of transport to be used in order to move goods from the point of source through any required processing or production processes and on to the end-user.

For us to be able to make these movements as seamless and as cost effective as possible, it is important for us to ensure that we maximise the use of the most suitable modes of transport available for the goods in question. We will now assess the different modes of transport available to us and discuss their associated strengths and weaknesses as available modes of transport.

The major modes of transport are road, rail, water and air but as we are studying global trade we must also include Pipelines as a minor mode because pipelines are used to transport oil and gas over extremely long distances both nationally and internationally and from offshore to shore and vice versa.

Typically, a global supply chain may consist of a raw materials extraction point, such as a mine, forest oil well or quarry where the materials are sourced before being transported, usually by road or rail to a point where they may be initially processed and/or transported to a site for export, such as a port. From the port of export they would travel, usually by sea to another country for further processing of assembly and then may be moved again by various modes until final distribution, which is usually also completed by road.

Of course, where the materials are being assembled into a finished product, many such supply chains may be required in order to bring the materials and components together. In this scenario then what we have is more of a supply web than a supply chain because it is much more complex and the whole structure relies upon each thread of the web operating effectively to ensure that the end result can be achieved.

To imagine a Supply Web we only have to imagine the supply activity that is required to support each of the activities or stages within each box above. For example, imagine the supply and supply chain activity that is essential for the crude oil to be extracted even before it is able to be sent for processing into plastic granules. This complexity relates to every stage of the supply chain.

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