International supply chain’s double edge

Updated on April 20, 2024

Middle market companies balancing the competitive advantages delivered by a global supply chain against strategic and operational challenges

The U.S. middle market continues to increase revenue through purchasing and selling products and goods in the international supply chains that connect all corners of the world.

A new research report, released today by the National Center for the Middle Market (NCMM) in collaboration with the Center for International Business Education and Research (CIBER) at The Ohio State University Max M. Fisher College of Business, reveals that middle market companies of all sizes and industry segments are firmly established in global markets as purchasers or sellers. 

Of the 406 middle market supply chain leaders who responded to the report’s survey, 60% indicated revenue growth as the top advantage for international sellers, while 72% of purchasers surveyed cited cost savings as the top benefit for engaging in international supply chains.  

Expansion by mid-size companies into international supply chains is also common, according to the research. In 2023, one out of every five middle market companies expanded into new international markets. That number is expected to grow in 2024, with 45% of sellers indicating they are looking to expand their international supply chain presence, while 37% of purchasers look to do the same.

“This research offers a unique look at an important segment of middle market business,” said Doug Farren, managing director of the NCMM. “While many enterprise organizations participate internationally and often times have well-defined processes, teams and partnerships, we wanted to explore the latest trends and implications for mid-size companies that sell products outside the U.S. as well as source raw materials and supplies from partners in other countries.”

While middle market businesses that have international supply chains are largely satisfied with their experiences and acknowledge the importance of diversification, business beyond domestic borders is not without challenges and risk. While 37% of responding purchasers cited longer lead times as their top challenge, sellers cited quality control as their primary hurdle within their international supply chains.

Risk mitigation for international supply chains also remains a top priority for these middle market companies ― 47% of sellers cited insurance as their primary action for mitigating risk, while 40% of purchasers cited a diversified supplier base as their go-to tactic. Regardless of whether these mid-size companies purchased or sold products internationally, purchasers and sellers each felt that supply chain disruptions were minor (74% and 80%, respectively) and felt overwhelmingly confident in their international supply chains (77% and 89%, respectively). 

Another challenge revealed by the research is the struggle to hire domestic employees with international supply chain expertise. Mid-size companies that purchase or sell internationally have a clear need for domestic employees with international supply chain experience, with language proficiency cited as being particularly critical, along with international awareness and cultural competence.

“What was particularly interesting about the research was just how much work was needed to ensure middle market companies are fully invested in creating and sustaining a global supply chain,” said Michael Knemeyer, a professor of logistics at Fisher and co-author of the report. “Success means dedicating human capital, trained with language and cross-cultural competencies, to ensure these international networks are operating at capacity.” 

The joint research report highlights the important role that Fisher’s CIBER has in international business and education. Administered by the U.S. Department of Education, CIBER grants provide universities across the country with valuable resources to increase and promote the nation’s capacity for international understanding and competitiveness. 

“We were proud to collaborate with NCMM on this very important exploration of global supply chain,” said Dominic DiCamillo, executive director of Fisher’s Office of Global Business, which houses its CIBER. “When we talk about the power of partnerships and driving real impact and understanding of today’s international business environment, it’s projects like this one that highlight the unique role that the NCMM, Fisher and CIBER can have when working together.”

The research report can be found at http://www.middlemarketcenter.org.

About the Center for International Business Education and Research (CIBER)

The Center for International Business Education and Research (CIBER) at The Ohio State University is a national Center of Excellence that seeks to promote international business education and research and enhance U.S. business competitiveness in the global marketplace. The Ohio State CIBER works to expand global trade, highlight the National Center for the Middle Market, resolve supply chain and logistics challenges, and build talent pipelines. Ohio State CIBER is guided by a vision to be a national center building on local and regional competencies, one focused on quality programming across disciplines, with a culture that is collaborative, inclusive, accountable, and innovative.

About the National Center for the Middle Market (NCMM)

The National Center for the Middle Market is a collaboration between The Ohio State University Fisher College of Business, Chubb and Visa. It exists for a single purpose: to ensure that the vitality and robustness of middle market companies are fully realized as fundamental to our nation’s economic outlook and prosperity. The center is the leading source of knowledge, leadership and innovative research on the middle market economy, providing critical data analysis and insights for companies, policymakers and other key stakeholders. The NCMM is fully committed to funding and distributing the most credible open-sourced research, dynamically creating new knowledge, providing programs that drive value for middle market companies and offering a well-informed outlook on the health and future of the middle market via the Middle Market Indicator.

About The Ohio State University Max M. Fisher College of Business

The Ohio State University Max M. Fisher College of Business provides tomorrow’s business leaders with the foundation needed to succeed in business today. Fisher students experience an academically rigorous learning environment, led by world-class faculty, which fosters their development as principled leaders who possess an entrepreneurial spirit, global awareness and a commitment to social responsibility. Organizations from around the globe thrive under the leadership of Fisher alumni, who positively impact their communities and the world.

The Editorial Team at Healthcare Business Today is made up of skilled healthcare writers and experts, led by our managing editor, Daniel Casciato, who has over 25 years of experience in healthcare writing. Since 1998, we have produced compelling and informative content for numerous publications, establishing ourselves as a trusted resource for health and wellness information. We offer readers access to fresh health, medicine, science, and technology developments and the latest in patient news, emphasizing how these developments affect our lives.