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Globalisation: It's a not-so-small world - Coggle Diagram
Globalisation: It's a not-so-small world
FLASHPOINTS
The main attraction of offshoring is lower labour costs, but those savings tend to be short term rather than long term.
When it comes to setting up your global supply chain, the ultimate best practice is to go the countries and look for yourself
Nearshoring—bringing the key supply chain tasks back closer to home—is the fastest-growing globalization trend.
Companies too often fail to calculate the total supply chain cost of offshoring, which includes total landed cost, inventory holding cost, and the cost of product obsolescence
There’s no single set of best practices for globalization since every country has its own cultural and supply chain requirements.
CONSIDERATIONS WHEN MAKING SITE SELECTION DECISIONS OVERSEAS
How quickly can you enter and serve the market?
Location is extremely important, but remember that you’re operating by another country’s rules now
How flexible is your market strategy?
Have you established a relationship with the local Customs department and other officials?
Is it part of your company’s business strategy to own foreign real estate?
Have you established a local supply base?
World Bank and the Finland-based Turku School of Economics have compiled an index that
weighs the logistics performance of 150 different countries in seven areas:
Competence of local logistics providers
Capability to track and trace international shipments
Ease and affordability of arranging international shipments
Cost of domestic logistics
Quality of transportation and information technology infrastructure for logistics
On-time delivery performance
Efficiency of the Customs clearance process
WHERE TO OFFSHORE
When it comes to setting up your global supply chain, the ultimate best practice is also the most obvious: Go to the countries and look for yourself. There’s nothing better than an on-site evaluation
The 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
Unexpected supply chain costs
can quickly erode the potential savings on labour.