Managing Operations Internationally issues (Setting a global supply chain …
Managing Operations Internationally issues
Technology made processes faster
For example, container shipping
Each country has cultural and supply chain requirements
There is no one way of distributing methods to meet customers demand, it depends
Every country has different duties
Saving on labor cost
labor are rising (China) :arrow_upper_right:
91% U.S. companies are not saving on cost as they hoped :neutral_face:
Unexpected supply chain costs can quickly destroy the potential savings on labor.
The biggest mistake companies can make regarding China, is assuming China is winning strictly due to cheap labor, and not by improving quality and productivity.
Understanding cost drivers, enables managers to implement strategies designed to reduce these costs :arrow_down:
Cost saving are short term
Setting a global supply chain
Both geography and physical infrastructure are key differentiators
Public infrastructure makes an enormous difference to a company’s ability to operate
Get there before everyone else does
Labor is widely available & eager to demonstrate their capabilities :silhouettes:
Know what you’re getting into before you go there
The best is to go to the countries and look for yourself :desert_island:
Distribution network in another country
Questions to be asked
Place, cost, contacts, regulations etc.
Objectives to meet
Companies who succeed :check:
primary driver for investing resources and effort in seeking global suppliers and customers
Invest in enabling management structures and systems
conﬁgure their supply base to optimize the mix of local suppliers and global suppliers.
deploy resources to ensure that suppliers’ capabilities are aligned with their competitive and manufacturing strategies.
Advice to succeed
Companies fail to calculate total supply chain cost
Landed cost, inventory holding cost & cost of product obsolescence
Companies need to keep tracking China’s logistics network and infrastructure as they are fast moving
Never use the Chinese market as a last resort to save your business as China will take advantage of your weakness
Nearshoring is the fastest-growing globalization trend
choose a relatively low-cost country within its own hemisphere to save on logistics costs :arrow_lower_right:
visibility into the entire supply chain is absolutely essential when it comes to managing a global operation :eye:
Using an integrated global system :globe_with_meridians:
traditional measures of performance such as direct freight costs and average delays, while important, may not capture the overall logistics performance and thus the ability of countries to use trade for growth.
downside to locating a manufacturing or distribution facility near an established port is that procuring these properties may be prohibitively expensive because the area is already built up