In the recent past, manufacturing companies that have taken advantage of the availability of the ready market along the US and American border to set up companies to produce goods and services which mostly serve the US markets. Globalization of trade in the regions has allowed for countries to invest in their local production companies and capital resources effectively. Many counties had companies and industries that their production was not of any effect to the countries economy. This is reflected by an increase in production, which boosts the amount of income produced, and consequently the living standards of people are likely to improve. This has been measured by means of comparative advantage where Mexicans produce goods and services at lower opportunities cost as compared to other countries that are competitors (Nancy, 2000).
The sharing of costs in production across major business producing companies has greatly accelerated the growth of trade since 1960s and has accumulated to about 40 percent in Mexico. The agreement of trade sets procedures which are aimed at abolition of trade barriers- import taxes, import and export laws and the health and safety standards- between the states which are members on some agreeable goods and services whose origin is from within North America (Carrillo & Hualde, 1998).
The management in the supply can be viewed as a cross-function approach which entails management of the company production activities which may include the logistics in relation to both the produced materials and raw materials in the company, other company activities for instance the internal goods processing and the completed goods and the transportation of manufactured goods out of the company. In most manufacturing companies, there are a lot of efforts channeled towards achievement of the desired goals. As the production company strives to focus on core competencies and becoming more flexible in the effectiveness of its production perhaps they are seen to minimize their ownership of raw materials the sources and distribution channels. This being an oil supplying company, the functions of this particular company can be outsourced to increasingly to other entities that can yield in the performance of the activities better or more cost effectively. The effect of this kind of strategy will lead to the increase in the quality and the quantity of organizations involved in satisfying the customer demand, while on the other hand it will be reducing the management cost control of daily logistics operations. When manufacturing or producing companies apply less control and more supply chain partners, this will lead to the automatic creation of supply chain management concepts. The main purpose of this company is therefore to supply the chain management that improves the trust is to improve trust of its clients and even the staffs and other partners among supply chain partners who will thus improve inventory visibility with the velocity of an inventory movement.