Globalization: Rolling out the red carpet

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April 22, 2014

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Globalization has become a key buzzword in today’s increasingly interconnected world, denoting the expansion of businesses and other organizations into the international playing field.

This means that local companies get a chance to prove their worth in the markets outside the Kenyan sphere, with companies from abroad finding admittance into Kenya’s economy.

SO how does this trend bode for the logistics industry?

The first benefit of globalization to the logistics industry is the promotion of standardization of services and products.

Standardization here is applicable in that logistics firms will have to meet the accepted international standard of business, meaning local Kenyan standards of operation will have to be raised to be on the same level as those of countries far ahead of us in development, thus jump-starting our industry.

In this way, Kenyan exporters of perishables using outdated modes of preservation, or poor sanitation standards may find themselves banned from introducing such products into foreign markets as a measure of protecting the citizens of the country from substandard or downright hazardous products.

Supply chain managers must therefore drag their operations kicking and screaming into the future in order to be allowed a seat at the global table.

Similarly, globalization introduces international competitors to the local market.

These foreign companies often have strong financial backing and access to the latest in logistics systems, technology and practices.

Having to defend their market share from strong competitors is likely to inspire local supply chain managers to again adjust their internal benchmarks higher, therefore being better at service provision to their clients and requiring similar excellence from their contractors to ensure every step of the logistics process is up to par.

Companies hoping to operate in countries outside their own are also subject to close scrutiny by government agencies within their adoptive homes, a measure intended to defend the country from unscrupulous businesses engaging in graft or fraudulent activities to the detriment of the host country.

Local logistics bodies are therefore compelled to operate with increased transparency and careful emphasis on operations that are above suspicion, naturally resulting in a more efficiently and morally run firm.

Globalization, by definition, requires and fosters good relations between countries around the world.

Such favorable interactions often breed mutually beneficial trade agreements and policies between the nations involved.

For the logistics industry, this is a dream come true: camaraderie between Heads of State usually results in relaxed import and export regulations, with some countries even offering exemptions from heavy taxation or levies.

East African supply chain managers rejoiced when the union of the East African community was revived and fine tuned to enhance trade, with border crossings being streamlined and the possibility of a common currency vastly simplifying operations.

With increased interactions between countries and companies across national lines, logistics supply chain managers will have greater access to goods and services that are not available locally.

This is to the benefit of logistics managers because they are now able to provide a larger variety of services to the local market, as learned by interacting with foreign supply chain outfits.

It is also possible to acquire advanced pr specialized equipment or vehicles beneficial to the business from overseas.

Local customers also stand to gain from a logistics industry with more international exposure by virtue of having a great many new products introduced to the markets via international exploration.

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All said and done, globalization seems to be all thumbs up not just for the logistics industry, but for the country and her economy as a whole.

We’re certainly rolling out the red carpet for our friendly competitors and neighbors; what have you done to prepare your firm for globalization?


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