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In: Economics

What are the contributing factors for global commerce and supply chain flows? Explain each one of...

What are the contributing factors for global commerce and supply chain flows? Explain each one of them.

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Expert Solution

There are many factors which contribute for global commerce and supply chain flows.Global commerce is expanding production and trading towards foreign countries and selling goods overseas.Supply chain flow is managing and distributing raw materials,capital funds,output,etc to the branches of companies situated in various countries.If supply chain flow is feasibe then it is easy to acquire global commerce.In supply chain flow,all the funds,resources and raw materials are distributed accordingly among branches and then those companies start producing and selling goods.At times,company in home country derives a suppy chain flow where it decides the level of output to be sold in overseas market.This leads to supply chain flow and global commerce.Global commerce helps a country to achieve higher gross domestic product and maximum export rate.Even healthy relations are maintained among countries.Following are the contributing factors for global commerce and supply chain flows:

  • Availability of manpower:If a country has plenty of human labour then it is a major factor which contributes towards global commerce.Availability of maximum manpower helps in increasing production and output level.The excessive goods are exported to foriegn countries.This helps in acquiring global commerce.It even provides work for many people in the country.
  • Modern machinery and techniques:If modern machinery and techniques are available in a country,then that country can achieve global commerce.Usage of modern machinery and new techniques in process of production helps in attaining maximum output and this output can be distributed among various countries by supply chain flow and higher sales can be acquired.
  • Infrastructure facilities:Country with best infrastructure and good transport facilities can get globalised.Most of countries do not expand their trading activities to overseas market.This is due to non-availablity of appropriate infrastructure.If a country has good infrastructure then it would be easy to carry out trading activities.Even supply flow of output to various country would not delay if there are good transport facilities.
  • Fund management team:In case a country has best fund management teams or individuals who plan and distribute funds accordingly then that country can go for supply chain flow and global commerce.These fund management teams or individuals who efficiently disributes funds,help a domestic company to expand its activities to overseas market.As a part of supply chain flow,they create strategies where resources,raw materials,labour,output is estimated and supplied to the various countries.The factor of best fund management teams contributes for global commerce and supply chain flow.
  • Moderate trade restrictions:If countries have moderate or less trade restrictions,then export-import activities can be carried out effectively and efficiently.This helps in hassle free global commerce and supply chain flow as strict rules and lengthy procedures might delay the supply of output.Countries can improve their trading activities if less rules and regulations are imposed.
  • Excessive resources:If resources are available in large,then the country can use supply chain flow to supply and sell resources to deficient countries.Even this helps in achieving global commerce.Those resources can be exported or sold in overseas market.

Hence these are the factors which contribute for global commerce and supply chain flow.If all these factors are available,then they contribute in attaining global commerce.If supply chain flow is managed then global commerce is easily acquired if there are less restrictions on trade.Therefore,presence of all the mentioned factors will contribute towards global commerce and supply chain flows.


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