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B2 S3 A3.4 Ch 10 Globalisation: its a not so small world (overseas site…
B2 S3 A3.4
Ch 10 Globalisation: its a not so small world
Gillette
HK market
local custom
no storage/limited space
order fulfilment w/in
hours
local distribution centre req'd
US market
order fulfilment w/in
days
Africa (ex SA & Egypt)
sell to distributors
monthly
shipments
Russia
distributors collect from warehouse
Ad hoc
:question:
overseas site selection criteria
real estate
:question: what is bus strategy per foreign RE
:question: is ability to serve foreign market enhanced by owning facilities abroad
flexibility
:question: how flex is market strategy
:question: how easily can distribution resources be scaled up/down in case of market developments differing from anticipation
serving the market
:question: how quickly can you enter and serve
:question: is it affordable to enter quickly and serve
:star: most effective way to enter foreign market:
Secure access to existing facilities already aligned with established distribution channels
:warning:high demand; high cost :!!:
logistics
:question: are logistics services available
customs
:question: established relationship with local customs
:question: obtained necessary bonds/licenses to im/export goods
local supply base
:question: based established?
:star: manager with local market knowledge of laws, customs, practices, logistics
global supply networks
~ best practices ~
creation of effective corporate global vision
acts as driver of investing resources & effort
to secure global suppliers & customers
vision is basis of developing & deploying global supply base
enable management structures & systems to deploy global vision
global commodity councils & reporting systems
int'l procurement offices & sales offices (sharing expertise per regional sourcing and sales ops)
total cost models for decision making
global information systems w sourcing & demand planning capabilities
supply base configured
for optimisation of local suppliers/global suppliers mix
(with flex to adapt as relationships develop)
resource deployment to ensure suppliers capabilities are aligned with competitive & manufacturing strategies
process specialists :left_right_arrow: isolated technical problems
systemic problems w/in supplier :left_right_arrow: full-scale intervention process effecting positive change
World Bank &
Turku School of Economics
logistics performance
https://data.worldbank.org/indicator/LP.LPI.OVRL.XQ?end=2018&start=2018&view=map
lead time to export
lead time to import
efficiency of customs clearance process
qual of trade & transport infrastructure
ease of arranging competitively priced shipments
competence & qual of logistics services
freq w/which shipments reach consignee w/in scheduled or expected time
ability to track & trace consignments
:!!: global supply chains cannot focus on cost alone - logistics performance data is important qualitative decision making factor
offshoring: best results...
balance
low cost
flexible logistics
agility
=
better management
of
in-process & in-transit goods
note
total supply chain cost
total landed cost
+
total inventory holding cost
+
cost of product obsolescence
low-cost offshore :ballot_box_with_check:
ok :check:if cost of additional inventory/obsolescence buffer (per longer lead time) remains acceptable
regional logistics analysis
logistics assets and abilities
geography & physical infrastructure
duties & tariffs
offshore alts
near-shoring
right-shoring
in-shoring
reverse globalisation
reduce risks associated with:
:arrow_up: oil prices
:arrow_up: high seas piracy
:arrow_up_down: currency fluctuations
:arrow_heading_down: recession