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Interdependency in a Global Supply Chain

In discussions on the global economy it is not unusual to hear about exports versus imports. For some time this has been an indication of a nation’s strength and position in the economy regarding which direction the scale tipped – export value or import value. Today, supply chains are global in nature creating interdependency between multiple countries that in many ways changes the dynamics because imports are necessary to create the exports.

 In theory each country wants to see exports increasing and imports decreasing. The United States has experienced a trade deficit for years where imports far exceed exports. As more production jobs get shipped overseas, the United States produces less and less in goods and has increased their consumption. It’s been said that we have a nation of consumers. According to the US Department of Commerce recent statistics support this. The Nation’s international trade deficit in goods and services increased to $40.3 billion in April from $37.1 billion (revised) in March, as imports increased more than exports. (June 4, 2013)

But with the changes today’s economy there are other factors to consider. Looking at what each nation in a particular supply chain provides shows different value that all contributes to the final product. Along those same lines, employment throughout each step of the supply chain creates added value that is not included in the raw statistics. If you only look at the size of the country and the value of the products you fail to acknowledge the local value that in turn supports each nation.

With the increased interdependency there is opportunity for growth. Developing nations with reduced costs are positioned to enter the global marketplace and compete. Sourcing for your business may take you to new places and new sources you hadn’t previously considered or were not previously in existence to consider. Or maybe there is room for your business to expand and partner in a different way within the global supply chain. Economic prosperity for your business is there, opportunity is there, you just need to find it.

June 27, 2013
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BY Bellwether
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