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Global Supply Chain Management - International Issues in...

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Unformatted text preview: International Issues in International Issues in Supply Chain Management Stuart Colie Colin Campbell Sang Yi Why is this stuff important Why is this stuff important to you? Global market – 1/5 of U.S. output produced overseas – ¼ of U.S. imports from U.S. parent companies or U.S. affiliates – Most U.S. companies are going abroad. Look who’s coming here… Look who’s coming here… Maersk and APL Logistics – Have offices all over the world – Looked for bilingualism – Programs sent employees abroad Willing to teach second language To learn and to work Basics Risks & Advantages Issues Involved Regional Differences in Logistics Case Study Real­Life Example Different Types of Different Types of International Systems International Distribution Systems – Manufacturing Domestically – Distribution & Marketing overseas Marketing varies greatly with area Different Types of Different Types of Systems…cont’d International Suppliers – Raw materials & components supplied by overseas companies – Final assembly done domestically – Often times, final products shipped overseas Different Types of Different Types of Systems…cont’d Offshore Manufacturing – Raw materials and components from overseas suppliers – Manufactured overseas – Distributed from domestic warehouses Different Types of Different Types of Systems…cont’d Fully Integrated Global Supply Chain – Products supplied, manufactured, and distributed from various facilities throughout world – National boundaries are taken advantage Why are companies going Why are companies going global? Global market Technology Global cost Politics & economy Global Market Forces Global Market Forces Foreign competitors Fellow domestic competitors Increasing demand – Internet & TV – May go global – Kellogg & Nestle Technological Forces Technological Forces Technology is quickly changing – Outsourcing research, design, & production can be valuable Must be able to collaborate on different levels Global Cost Forces Global Cost Forces Labor – Unskilled labor – Skilled labor Tight Integration – Costs of location – Capitol for building new facilities Y2K – India Government tax breaks or cost­sharing Political & Economical Political & Economical Forces Exchange rate fluctuation Tariffs Quotas – Almost­finished goods vs. “finished goods” Risks And Advantages of Risks And Advantages of International Supply Chains Risks Risks Exchange Rates Operating Exposure Customer Reactions Supplier Reaction Government Reaction Addressing Global Risks Addressing Global Risks Speculative Strategies Hedge Strategies Flexible Strategies – – – – Production Shifting Information Sharing Global Coordination Political Leverage Requirements For Global Requirements For Global Strategy Implementation Product Development Purchasing Production Demand Management Order Fulfillment Issues In International Issues In International Supply Chain Management International vs. Regional International vs. Regional Products Region Specific Products and “Lead Country” True Global Products – – – – Coca Cola Levi’s McDonald’s Gucci Local Autonomy vs. Local Autonomy vs. Central Control Short term – – – Japan low Germany medium U.S. high E.G. SMITHKLINE “Contac 600” Miscellaneous Dangers Miscellaneous Dangers Exchange Rate Collaborators may become Competitors. Administration Training Foreign Governments – “Protectionism” U.S.A. vs Taiwan Examples Examples Hitachi vs Motorola Toshiba vs 3M Sunrise Plywood and Furniture vs Mission Furniture Regional Differences Regional Differences in Logistics Regional Differences Regional Differences Cultural Infrastructural Economical The “Triad” The “Triad” First World Emerging Nations Third World Major Differences Major Differences First World Emerging Infrastructure Highly developed High Third World Under Insufficient to support development advanced logistics Variable Typically not considered Supplier operating standards Information system availability Human resources Generally available Available Support system not available Available with some searching Not available Often difficult to find Designing & Managing the Supply Chain Table 8-1 pg. 203 Cultural Differences Cultural Differences Language Beliefs Customs Infrastructure Infrastructure First World Emerging Nations Third World Geography More Differences More Differences Performance Expectations and Evaluation Information System Availability Human Resources Case Study Case Study Wal­Mart goes to South Wal­Mart goes to South America Why? – Room for expansion at home is lessening – Global expansion Take advantage of new markets A lot different from Mexico A lot different from Mexico and Canada Canada: 120 Woolworth stores bought in 1994 Mexico: 390 stores Only 16 stores in South America – Markets already dominated by competitors – Leading international revenue Wal­Mart takes a hit Wal­Mart takes a hit Estimated $48M loss since venture started in 1995 Competitors (Carrefour,FR) aggressive Broader selection is Wal­Mart’s edge – 58,000 vs 22,000 items stocked – Fliers handed out by Wal­Mart entrances Distribution Problems Distribution Problems Wal­Mart “every­day low pricing” – dependent on supply chain No distribution center Reliance on imported goods – Reliance on suppliers & contract truckers – 300 deliveries vs 7 deliveries (US) daily – Local suppliers don’t agree well with Wal­ Mart ways and price­bargaining Silly Mistakes Silly Mistakes Products: ex. footballs vs soccer balls & leaf blowers Stock handling equipment (pallets) Computerized book­keeping (taxes) Credit culture of Brazil (post­dates checks) Will Wal­Mart survive in Will Wal­Mart survive in South America? Wal­Mart says problems are temporary Management training It takes time to adapt Real World Example Real World Example Hewlett­Packard Hewlett­Packard Collaboration occurs often in the global supply chain Collaborators → Competitors Competitors Collaborative Product Commerce (CPC) What constitutes What constitutes collaborative commerce Groupware The Vision How it benefited HP How it benefited HP eAI Journal July 2001 How it benefited HP (cont.) How it benefited HP (cont.) Faster time­to­market Faster time­to­volume Faster time­to­productivity Competitive advantage Cost reduction Productivity improvements Administrative advances Better quality Conclusion Conclusion Potential Problems and Pitfalls Flexibility Operating differences within the “Triad” Nations Questions/Comments ...
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