1 / 18

Chapter 7 International Supply Chains

Chapter 7 International Supply Chains. Complexity at Global Level. Wall-Mart Case. Problem of getting into international market Difficulties and issues Mistakes made by Wall-Mart. Wall-Mart: Difficulties & Issues. Competition: Fierce, Established, Knows the environment

shada
Download Presentation

Chapter 7 International Supply Chains

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Chapter 7International Supply Chains Complexity at Global Level

  2. Wall-Mart Case • Problem of getting into international market • Difficulties and issues • Mistakes made by Wall-Mart

  3. Wall-Mart: Difficulties & Issues • Competition: Fierce, Established, Knows the environment • Distribution: Not owned (and centralized), Too many product lines, Logistics, Reliable and cooperative suppliers, Inadequate support from U.S. suppliers.

  4. Wall-Mart: Mistakes • Wrong products • Wrong equipment (palettes) • Inflexible (and inappropriate) information system. • Lack of understanding toward local culture and economies: • Credit (post-dated checks) • Small business economy (no tax) • Management mentality (lack of learning attitude, denial of situation in South America)

  5. International SC Issues • Introduction • Types of International Operations • Forces that drive globalization • Risk and Advantages of ISC • Key Success Factors in ISC • Issues in ISC • Regional differences in logistics

  6. Types of International Operations • International distribution operations • International suppliers • Off-shore manufacturing operations • Fully-integrated global supply chains

  7. Types of International SC

  8. Drivers of Globalization • Global market forces • Technological forces • Global cost forces • Global political / economic forces

  9. Global Market Forces • Foreign competition and opportunities • “Offence is the best defense” strategy • Saturation of domestic (U.S.) market while huge potential in international markets (mainly due to growth of IT)

  10. Technological Forces • Related to product and process • Need to locate R&D, technology • Advantages of having R&D close to the manufacturing facilities (shortened life cycle)

  11. Global Cost Forces • Shift from inexpensive unskilled labor to inexpensive skilled labor • Taxes and other incentives provided by foreign governments • Tight integration of SC may necessitate closeness of links

  12. Political & Economic Forces • Exchange rate issues (7.2) • Tariffs and quotas • Other international and local requirements and agreements (Environment, political, etc.)

  13. Risks and Advantages of ISC • Importance of flexibility • Must understand demand characteristics and cost advantages • “Operating Exposure” and exchange rate (page 154) • Exchange rates does not necessarily reflect relative inflation rates.

  14. Factors Affecting Operating Exposure • Customer reaction • Competitive reaction • Supplier reaction • Government reaction

  15. Responses to Global Risk • Speculative strategy • Hedging strategy • Flexible strategy • Supplier capacity • Manufacturing capabilities • Production shifting • Information sharing • Global coordination • Political leverage

  16. Key Success Factors in IS • Product development – Flexible, modular design • Purchasing • Production (excess capacity, IT, Centralized management) • Solid demand management and forecasting (solid and reliable information systems) • Rapid order fulfillment capability

  17. Issues in ISCM • International versus regional products: • Region-specific products • True global products • Centralized versus local control

  18. Regional Differences in Logistics • Categories of region: • First World (Triad): U.S., Japan, Western Europe • Emerging Nations: Thailand, Taiwan, Brazil, Argentina • Third-World: Middle-East, African Countries • Cultural differences (language, beliefs, customs) • Infrastructure • Performance expectation and evaluation • Information Technology • Skilled and managerial human resources

More Related