Our world is becoming increasingly interconnected, increasing the speed of commerce and making it ever easier to source products from one continent to sell in another. We hear it all the time at conferences, in newspaper op-ed columns, and in TED Talks we watch on YouTube. We hear it so often that it has almost become trite and uninteresting, something that we take as a given – our world is shrinking and companies everywhere can only benefit.
What you hear less often from pundits and conference presenters are the new risks that globalization exposes companies too. The extension of supply chains across multiple continents greatly increases their complexity as well, meaning that a flood at a textile factory in Chengdu, China could prevent consumers in Canton, Ohio from buying the latest fashions because the cloth couldn’t reach a garment manufacturer in Dhaka, Bangladesh. Even if nothing goes wrong, sourcing from a wide range of far-flung locales creates rapidly-changing supply chains so complex that sourcing departments find it difficult to stay in sync with legal teams, corporate social responsibility departments, and security functions.