The threat of Global Gridlock
Case Study: Global Business Management, GEM 671|
Submitted by: Ojashvi RanaRoll number: 11314|
‘The threat of global gridlock’ by George Stalk Jr. is an article that predicts a possible crisis due to the inability of worldwide transportation networks to support the demand of the global economy. While the article focuses greatly on the areas around Europe and U.S. its implication, as the author hints, is global. Despite the 2008 crisis leaving the global economy handicapped and billions of dollars being spent on improving transportation networks, the author believes it is still unlikely to address the capacity problem. Lack of infrastructure and increasing oil prices will further hinder trade worldwide and increase costs. Few companies have realized this threat and even fewer have invested on improving their logistics or shortening their supply chain. Transportation bottlenecks, increasing congestion and delays in logistics would have a deep rooted impact throughout the world. Having a better supply chain management and efficient logistic networks under these circumstances could give a company the competitive edge over its rivals. Companies that are able to lower logistics costs and have faster replenishment cycle by designing resourceful business footprint (sourcing, manufacturing, distribution and retail network) could easily offset higher costs of production and labor resulting from having a long and inefficient logistics and supply chain. Analysis of the Case
The rapid and steady increase in road traffic has out spaced road construction in most places in Europe and U.S. Lack of construction of roads in recent years. The US Federal Highway Administration graph (given in the case) supports this finding. This trend is observed consistent all over the world and not only in Europe and U.S. An alternative to the road traffic could be the railroads which most companies opt for. The data...