Chapter 12

Chapter 12 - Chapter 12: Global Strategic Positioning I....

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Chapter 12: Global Strategic Positioning I. Global Supply Chain Integration - Global logistics must support operations in a variety of different national, political, and economic settings while also dealing with increased uncertainty associated with the distance, demand, diversity, and documentation of international commerce. Logistics in a Global Economy - Global operations increase logistics cost and complexity. - Global operations are characterized by: o Increased Uncertainty: results from greater distances, longer lead times and decreased market knowledge o Increased Variability: results from unique customer and documentations requirements o Decreased Control: results from the extensive use of international service firms coupled with potential government intervention in such areas as custom requirements and trade restrictions o Decreased Visibility: results from longer transit and holding times with less ability to track and determine exactly where shipments are located - Complicate development of an efficient and effective global strategy Stages of International Development - Export/Import o This strategy used to increase revenues or decrease costs associated with a domestic operation o Influences logistical decisions in three ways: Sourcing and resource choices influenced by Artificial Constraints Use Restriction- a limitation, usually government imposed, that restricts the level of import sales or purchase Local Content Laws- specify the proportion of a product that must be sourced within the local economy Price Surcharges- involved higher charges for foreign-sourced product imposed by governments to maintain viability of local suppliers Increases planning complexity Extends domestic logistics systems and operating practices to global origins and destinations - Establishment of International Operations o Local Presence- establishment of local facilities and operations to increase market awareness and sensitivity o Means developing unique management, marketing, and sales organizations - Globalization: The Stateless Enterprise o Enterprises with senior management that effectively makes decisions with little or no regard to national boundaries
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Managing the Global Supply Chain - Performance Cycle Structure o Global operational cycles often require weeks or months, due to communication delays - Transportation o Changes that have occurred to deregulate transportation Intermodal ownership and operation Increased carrier privatization Changes in cabotage and bilateral service agreements have increased trade efficiency - Operational Considerations o International operations typically require multiple languages for both product and documentation o Unique national accommodations such as performance features, technical characteristics, environmental considerations, and safety requirements o Sheer amount of documentation required for international operations o High incidence of countertrade (seller agrees to accept products and payments or
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This note was uploaded on 11/18/2010 for the course BMGT 367 taught by Professor Fogul during the Fall '08 term at Maryland.

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Chapter 12 - Chapter 12: Global Strategic Positioning I....

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