Supply-chaining is both enabled by the flattening of the world and hugely important flattener itself, because the more these supply chains grow and proliferate (increase in great numbers), the more they force the adoption of common standards between companies (so that every link of every supply chains can interface with the next), the more they eliminate points of friction at borders, the more the efficiencies of one company get adopted by the others, and the more they encourage global collaboration. (Thomas L. Friedman, 2005, pg 152)
Supply chain involves dozens of suppliers, distributors, port operators, customs brokers, forwarders, and carriers. (Thomas L. Friedman, 2005, pg 152)
To make the global supply chain work is very difficult because there are basically 2 challenges.
1) Global optimization – Is not the matter of where you get the products but is the matter of the total cost of delivering all your parts on time from all four corners of the globe to your factories of retail outlets has to be low, and certainly lower that those of your competitors.
2) Hard-to-predict demand
(Thomas L. Friedman, 2005, pg 153)
1) Replacing inventory (complete listing of stock) with information – The faster you can get information from stores about customers are buying (what products, what models, and what colors), the faster you can get that information to your manufacturers to your manufacturers and designers and the faster they can send back down the supply.
2) Postponent – It becomes harder and harder to forecast demand, good companies find ways to post-pone adding value to their products until the last possible moment.
(Thomas L. Friedman, 2005, pg 154)
Source : THE WORLD IS FLAT, Thomas L. Friedman, 2005