Global Dimensions of Supply Chain

7/27/2019 Global Dimensions of Supply Chain

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GLOBAL DIMENSIONS OFSUPPLY CHAIN


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Introduction

Scope and magnitude of global

business

Key to global logistics

excellence

MODULE OUTLINE


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Introduction

Many business organizations looking beyond horizon

Creating opportunity to connect companies across the

globe Enables the companies to collaborate horizontally and

vertically in supply chain

Involvement in international market are through:purchasing inputs for production,

importing,

exporting,

joint ventures,

alliances,

foreign subsidiaries and divisions


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SCOPE AND MAGNITUDE OF GLOBAL BUSINESS

New markets are emerging up and existing marketsare expanding their businesses worldwide

Acquisitions of source of raw materials and newmaterials from other countries through global sourcing

initiative have taken place

Globalization existence:

The internationalization of economics activities is

nothing new. Some commodities have had an

international character for centuries; an obviousexample being the long established trading patterns in

spices and other exotic goods.


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Internationalization:

Internalization processes

involve the simple extension ofeconomics activities acrossnational boundaries. It isessentially a quantitative

process which leads to a moreextensive geographical patternof economic activity.


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Globalization:

Globalization processes are

qualitatively different frominternationalization processes. Theyinvolve not merely the geographicalextension of economics activitiesacross national boundaries butalso and more importantly thefunctional integration of such

internationally dispersed activities.


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Driving force of global supply chain management:

GLOBALIZATION

CompetitiveGlobalization

Drivers

GovernmentGlobalization

Drivers

MarketGlobalization

Drivers

CostGlobalization

Drivers


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Expansion of global industry is the most important

business developments has taken place in recent

years

The companies may be headquartered in Asia,

Europe, or North America, but their markets are

international in scope


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Global 500:

Source: http://money.cnn.com/magazines/fortune/global500/2011/full_list/

Rank Company Revenues ($millions)

Profits ($millions)

1 Wal-Mart Stores 421,849 16,3892 Royal Dutch Shell 378,152 20,127

3 Exxon Mobil 354,674 30,460

4 BP 308,928 -3,719

5 Sinopec Group 273,422 7,629

6 China National Petroleum 240,192 14,367

7 State Grid 226,294 4,556

8 Toyota Motor 221,760 4,766

9 Japan Post Holdings 203,958 4,891

10 Chevron 196,337 19,024


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Market potential

Geographicdiversification

Excessproductioncapacity

Products nearthe end of their

life cycle

Source of newproducts and

ideas

Foreigncompetition inthe domestic

market

Factors can influence a companys decision to enter

international markets:


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KEY TO GLOBAL LOGISTICS EXECELLENCE

Globalization of the world economy and our supply

chains has advanced at an almost unbelievable

speed

10 capabilities, that companies striving to achieveglobal logistics excellence:


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Total delivered costmanagement

Global logistics processautomation

End-to-end visibility

Supplier portals and ASNcapabilities

Total product identification andregulatory compliance


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Financial

supply chain

management

Global logistics

excellence



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Total Delivered Cost Management

Ability to analyze and predict the total supply chain costs International and domestic logistics costs: product and deliveryroute, applicable duties, tariffs and other customs-related costs

Global Logistics Process Automation

Few companies have well automated global logistics processes

Many still use manual steps Global logistics execution is more complex than domestic

transportation

Global logistics leaders have deployed technology that greatlyautomates many processes



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End-to-end Visibility

Ability to answer very basic questions: Where is it? When will itarrive? Is the expected date different from the planned date?

Visibility systems should make it easy to find and drill down oninformation from many points of reference

Timeliness and accuracy of information is critical

Supplier Portals and Advance Ship Notices(ASN) Capabilities

Ability to receive timely, accurate ASNs from overseas suppliersis critical for both effective inventory planning and to streamlinethe inbound flow of goods

Many process, language, and relationship barriers exist when

trying to better integrate offshore suppliers



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Total Product Identification and Regulatory Compliance

Supply chain security concerns are growing, and are certain to

increase In the U.S., a variety of mandatory and voluntary programs, suchas import and export restrictions, Customs-Trade Partnership

Against Terrorism (CTPAT), Operation Safe Commerce, andmany others place an increasingly difficult array of burdens in the

execution of global logistics

Dynamic Routing

Many international logistics flows tend to be fairly static after theyare designed

That is beginning to change, however, for reasons related to bothcost and agility/risk mitigation


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Variability Management

Global logistics leaders use supply chain data and performancemanagement systems to better understand both the level of

supply variability They work hard to shrink total delivery lead times

Reducing the variability by even 1-2 days can drive millions ofdollars in inventory savings and reduce lost sales due to stockouts

Integrated International and Domestic Workflow

Most companies were forced to manage the combined

international and subsequent domestic moves really as separateprocesses

The availability of appropriate software has also been lacking

This is changing rapidly, driven by customer demand

The technology to do so is increasingly available


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Integrated Planning and Execution Platform

One of the challenges of global logistics is that the informationthat decision-makers need tends to be in multiple places

Logistics leaders are deploying technology that enables them tohave a single work space

The powerful result: end-to-end, optimized global logistics controland cost minimization

Financial Supply Chain Management

Often said that supply chain management is about themanagement of materials, information and cash

The reality is that in most supply chain processes, the cashelement is not really connected

Linking the movement of cash and excellence in the FinancialSupply Chain can expand partner relationships, maximize

profitability, and ensure the flow of goods is not disrupted

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Global Dimensions of Supply Chain