Impact on the Supply Chain of Multinational Corporations
In the 21st century, all Multinational Corporations face an ever increasing pressure to globalize their operations. Due to this increased pressure to globalize, Multinational corporations also have to restructure their supply chains associated with manufacturing, selling and distribution , in order to better penetrate the markets that they intend to operate in. For this, the company needs to focus on three prime aspects; strategic level, tactical level and operational level. From the strategic viewpoint, the company will try to manage its relationship with the suppliers, customers as well as the distributors associated with the company. With the onset of newer technology, it has become relatively easier for multinationals to maintain quick and efficient communication with all the stakeholders.
The increased pressure to make strategies more environmentally viable has forced the multinationals to opt for green supply chain strategies. A green supply chain means that the company uses a supply chain that reduces the consumption of energy, natural resources and water. Such companies are also expected to use renewable sources of energy and also invest in keeping the environment cleaner. The adoption of green supply chains is primarily fuelled by market pressure, regulatory requirements, and economic benefits of doing so. Consumers across the world have become more environment conscious and they refrain of buying products that may harm it. Therefore, the multinational corporations must be very careful and they must only choose a supply chain process that does little or no harm to the environment.
The implementation of the newer environmental laws means that the multinational corporations have little option but to comply with them. Even so, all the stakeholders that is associated with the company; such as the suppliers, customers and the employees must all work towards the same aim. Complying with these new requirements means that financial implications are also quite high and the company is often required to set up a separate fund for environment purposes or for cleaning up their own wastages, which has undoubtedly increased their cost of operations. The degree to which the supply chain will be affected, also depends on whether the company is operating in a developed or a developing nation.
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