The Leader - January/February 2008 - (Page 52) real e stat e maNaGemeNt Globalization: Global Supply Chain Security Can Be a Double-Edged Sword BY daNiel GardNer From oriGiN to destiNatioN, carGo travels iNterNatioNallY throUGh diverse locatioNs via a varietY oF Forms oF traNsport aNd iNFrastrUctUre. Goods pass throUGh NUmeroUs cUstoms Borders reQUiriNG aN aBUNdaNce oF speciFic docUmeNts While aBidiNG BY coUNtless iNterNatioNal secUritY procedUres. W hether or not cargo actually reaches its destination depends on the success of something known as the supply chain – a complex coordinated system of organizations, people, activities, information and resources involved in moving a product or service from supplier to customer, often on a global scale. As such, the supply chain is central to any modern organization’s ability to function profitably – a broken supply chain will sometimes result in non-recoupable losses (both physical and financial). The impact of globalization on the supply chain has been two-fold. While it has benefited major ports and air- ports by opening up new markets, it carries with it negative impacts, such as terrorism and theft. This article takes a brief look at these effects – both good and bad – and then goes on to look at some of the proposed solutions. What are the issues facing global supply chains? How are governments and companies dealing with these risks? What impact might they have on the global logistics market, and on occupiers and investors in particular? As world trade continues to increase (growing by 9.5 percent in 2006 compared to an average of 6.2 percent for the period 2001-2006), economies and businesses are becoming increasingly interconnected and interdependent across the globe. Raw materials may 2 0 0 8 the le ade r originate in one location, be manufactured in another, assembled and packaged somewhere else, and finally, distributed all over the world as a finished product. This process depends on supply chains, which in turn require transportation hubs. Thus, the increase in global trade has filtered through to huge growth in key ports and airports around the world. The shipping industry, which carries 90 percent of the total global exports, has been the main beneficiary, seeing massive expansion in the past few years. Asia has witnessed the majority of this growth and ports in the region now enjoy a 65 percent share of world container port traffic. Typically, more valuable and time sensitive goods are transported by air. 52 J aN Ua rY / F e B rUa r Y
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