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International Logistics Management

International Logistics Management. dr Marian Krupa. AGENDA:. Introduction to the International Logistics Management International Supply Chain Management (SCM) IT and International Logistics Management – ERP software overview International transportation systems

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International Logistics Management

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  1. International Logistics Management • dr Marian Krupa

  2. AGENDA: Introduction to the International Logistics Management International Supply Chain Management (SCM) IT and International Logistics Management – ERP software overview International transportation systems International logistics structures and networks management Strategic and operational information management in Logistics - towards Global Business Intelligence. International Logistics Management – case study dr Marian Krupa

  3. 2. Supply Chain Management in the global perspective SCM / integration / collaboration Incoterms / International trade Globalization / Keytrends Logistics Performance Index: LPI 2012

  4. SupplyChain Management - definitions

  5. SupplyChain Management • SCM– Fourperspectives on logistics and supplychain management: Re-labelling Traditionalist Logistics Logistics SCM SCM Intersectionist Unionist SCM Logistics SCM Logistics Mangan, Lalwani, Butcher, Global Logistics and Supply Chain Management, Wiley & Sons, 2008.

  6. SCM – origin of theconcept • SCManagement(SCM) – the term was originallyintroduced by consultantsintheearly 1980s. (Keith Oliver) • It was assumedatthat time thatSCMis much widerthan logistics concept(UnionistSchool). • Theorigindefinition: Supplychain (SC) – network of organizationsthatareinvolvedinthedifferentprocesses and activitiesthatproducevalue for theultimatecustomer. (M. Christopher). Mangan, Lalwani, Butcher, Global Logistics and Supply Chain Management, Wiley & Sons, 2008.

  7. SupplyChain Management • SCM– themanagement across a networkof upstream and downstreamorganisations of 1) material, 2) information and 3) resourceflowsthatlead to thecreation of valueinthe form of products and/or services(M. Christopher). • Upstream– supplierisattheend of thesupplychain(Pushstrategy). • Downstream – customerisattheend of thesupplychain(Pullstrategy). Suppliers Manufacturers Distributors Retailers Customers downstream upstream Mangan, Lalwani, Butcher, Javadpour, Global Logistics and Supply Chain Management, Wiley & Sons, 2012.

  8. SupplyChain Management • SCM (definition 1) – encompass a number of keyflows: • physicalflows of materials • flows of informationthatinformthesupplychain (SC) • Resources which help supplychain to operateeffectively (people, energy, buyers’ markets etc.). (M. Christopher) Mangan, Lalwani, Butcher, Global Logistics and Supply Chain Management, Wiley & Sons, 2008.

  9. SupplyChain Management • SCM (definition 2): encompasses • the planning and management of all activities involved in 1) sourcing, 2) procurement, 3) conversion, and 3) logistics management (Unionists). • It also includes the crucial components of coordination and collaboration with channel partners, which can be suppliers, intermediaries, third-party service providers, and customers. • In essence, supply chain management integrates supply and demand management bothwithin and across companies. (Council of Supply Chain Management Professionals)

  10. SupplyChain Management • SCM (definition 3): • Supply chain management is the integration of key business processes across the supply chain for the purpose of creating value for customers and stakeholders. (Lambert / Global supplychain forum)

  11. SupplyChain Management • SCM (definition 4): • Supply chain management is the systematic, strategic coordination of: • thetraditional business functions (logistics!) and • the tactics across these business functions within a particular company and across businesses within the supply chain, for the purposes of improving the long-term performance of the individual companies and the supply chain as a whole. (Mentzer)

  12. SupplyChain Management • SCMvsLogistics (finalconclusion): • Thenetwork of organizations management • Theneed for collaboration (access to information) acrossthenetwork • Theentiresupplychainintegration and optimization management model • Long term (strategic) approach • IT implementations to controlcomplexity

  13. SupplyChain Management - Casestudy

  14. SupplyChain Management • SCM – example (1): Apparel industry RFID: Radio-frequencyidentification http://www.soumu.go.jp

  15. SupplyChain Management • SCM – example (2): electronic industry http://www.careersinsupplychain.org

  16. SupplyChain Management • SCM – example (3a): forest industry • Valuemgmt. • Balancingdemand/supply • Pull/Pushstrategy • Trade-offs • Make or buy http://www.advantageinternational.com

  17. SupplyChain Management • SCM – example (3b): forest industry • Before justifying the harvest of a tree – harvester/ woodcutter: • (1) thetype of wood; 2) thequantiity), a supply chain manager has to ensure balance(optimazation) of: • 1) price, 2) demand, 3) product flows and 4) inventory levelacross a large number of SKU's (stock-keeping unit) and a very diverse customer base. • Optimization withSCM software in various forms has been used in the forestry industry for many years to assist in managing this complexity. http://www.advantageinternational.com

  18. IntegrationvsCollaboration

  19. SupplyChain Management • IntegrationvsCollaboration • Integration: thealignment and interlinking of business processes (flowintegration). • Collaboration: relationshipbetweensupplychainpartnesdevelopedover period of time (humanbasedrelationships). Mangan, Lalwani, Butcher, Javadpour, Global Logistics and Supply Chain Management, Wiley & Sons, 2012.

  20. SupplyChain Management • Fourprimarymodes of INTEGRATION (SCM): • Internalintegration: cross-functionalintegrationwithin one organisation. • Backworkintegration: theprocess of integrationstarts and isconstactedfrom a retailer (pullstrategy). • Forwardintegration: theprocess of integrationstartsfromsupplier (pushstrategy). • Mixedintegration: thetotalintegration – rarehowevertheoreticallyideal for SCM. Mangan, Lalwani, Butcher, Javadpour, Global Logistics and Supply Chain Management, Wiley & Sons, 2012.

  21. SupplyChain Management • COLLABORATION principles: • Trust vsLoyalty. Business partners have to make axiologicaldecision: • – fromcustomer point of view: itis trust ordon’t trust approach; • – fromseller point of view: itis to be loyalinregard to yourcustomer (business partner) or not. • Im most casesboth business partners arejusttooafraid, from one hand 1) to implement trust strategy and 2) loyalapproach form theother. Mangan, Lalwani, Butcher, Javadpour, Global Logistics and Supply Chain Management, Wiley & Sons, 2012.

  22. SupplyChain Management • COLLABORATION principles: • The business partners dillema [Straffin]: Payoffmatrix Mangan, Lalwani, Butcher, Javadpour, Global Logistics and Supply Chain Management, Wiley & Sons, 2012.

  23. SupplyChain Management • SCM problems and obstacles (1): • Distribution Network Configuration: number, location and network missions of suppliers, production facilities, distribution centers, warehouses, cross-docks and customers; • Distribution Strategy: questions of operating control (centralized, decentralized or shared); delivery scheme, e.g., direct shipment, pool point shipping, cross docking, direct store delivery (DSD), closed loop shipping;

  24. SupplyChain Management • SCM problems and obstacles (2): • Trade-Offs in Logistical Activities: Trade-offs may increase the total cost if only one of the activities is optimized. It is therefore imperative to take a systems approach when planning logistical activities. • Information: Integration of processes through the supply chain to share valuable information, including demand signals, forecasts, inventory, transportation, potential collaboration, etc.

  25. SupplyChain Management • SCM problems and obstacles (3): • Inventory Management: Quantity and location of inventory, including raw materials, work-in-process (WIP) and finished goods. • Cash-Flow: Arranging the payment terms and methodologies for exchanging funds across entities within the supply chain. • Culturaldifferences: language, differenthistoricalbackground, different law systems, accounting systems, business ethos, etc

  26. INCOTERMS

  27. SupplyChain Management • INCOTERMS International Commercial terms: • INCOTERMS: Abbreviation for international commercial terms that are now commonly accepted standards in global trade. • INCOTERMS: definetherensponsibility for theshipment of goodsinterms of 1)transportation, 2) insurence and 3) customs. • The Incoterms rules began development in 1921. Incotermswerefirst publishedin 1936 by the International Chamber of Commerce (http://www.iccwbo.org) Mangan, Lalwani, Butcher, Global Logistics and Supply Chain Management, Wiley & Sons, 2008.

  28. SupplyChain Management • INCOTERMS thereare 4 groups / 13 incoterms (1): • Group E: Deperture • - EXW / ex-works • Group F: Maincarriagenot paidby seller • - FCA / freecarrier • - FAS / freealongship • - FOB / free on board Mangan, Lalwani, Butcher, Global Logistics and Supply Chain Management, Wiley & Sons, 2008.

  29. SupplyChain Management • INCOTERMS thereare 4 groups / 13 incoterms (2): • Group C: Maincarriagepaid by theseller • - CFR / cost and freight • - CIF / cost, insurance and freight • - CPT / carriagepaid to • - CIP / carriage and insurance paid • Group D: Arrival • - DAF/ deliveratfrontier • - DES / deliver ex ship • - DEQ / delivered ex quay • - DDU / deliver duty unpaid / DDP / delivered duty paid Mangan, Lalwani, Butcher, Global Logistics and Supply Chain Management, Wiley & Sons, 2008.

  30. SupplyChain Management • INCOTERMS: Whoisresponsible for: Transportationcosts Risk / Insurance costs Customsclearancecosts http://www.clipperweb.com.br/en/pages/incoterms.htm

  31. INCOTERMS (1): http://www.clipperweb.com.br/en/pages/incoterms.htm

  32. INCOTERMS (2): http://www.clipperweb.com.br/en/pages/incoterms.htm

  33. SupplyChain Management • INCOTERMS the International Chamber of Commerce: http://www.iccwbo.org/Products-and-Services/Trade-facilitation/Incoterms-2010/Q-A-March-2012/

  34. GLOBALISATION (Glocalisation)

  35. SupplyChain Management • GLOBALISATION – Think global, actlocal[Levitt] • Fallingpolitical (totalitarian) systems → Openingborders; • Regionalnetworking → Free trade agreements; • Easyflow of goods → Growth inthe international trade level; • Increasecompetition → Fallingproductprices / lowercosts. • Productivityimprovement → SCM optimazation. • Flexibility / Agile approach → Personalization / inventoryreduction. Glocalisation – adopting standard, mass, global product to localwants and preferences.

  36. SupplyChain Management • GLOBALISATION – Think global, actlocal[Levitt] • DEFINITION: An umbrella term for a complexseries of economic, social, technological, cultural and politicalchangeswhichcontinue to take place throughouttheworld. • Global cause and effectrule (positive and negative influence)! Mangan, Lalwani, Butcher, Global Logistics and Supply Chain Management, Wiley & Sons, 2008.

  37. SupplyChain Management • International shippingroutes 2010 http://qed.princeton.edu/index.php/User:Student/World_Transportation_Patterns

  38. SupplyChain Management • GLOBALISATION – Think global, actlocal[Levitt] Long-term trends in value and volume of merchandise exports, 1950-2010 (Index numbers, 2000=100) Source: UNCTAD secretariat calculations, based on UNCTADstatand CPB Netherlands Bureau of Economic Policy Analysis, World trade database

  39. SupplyChain Management • GLOBALISATION – Think global, actlocal[Levitt] Private capital flows (inflows and outflows of the capital) consist of three main categories: foreign direct investment (FDI), portfolio investment, and other investment. Source: UNCTAD secretariat calculations, based on IMF, WEO October 2011

  40. SupplyChain Management • GLOBALISATION – Think global, actlocal[Levitt] TOP 15 foreign direct investment – destination developing economiesin 2010. ($ billions and as percentage of developing countries' GDP) Source: UNCTAD secretariat calculations, based on IMF, WEO October 2011

  41. SupplyChain Management • GLOBALISATION – Think global, actlocal[Levitt] Net immigrationintodevelopedeconomies (1950 – 2012).

  42. SupplyChain Management • GLOBALISATION – conclutions • Theprocess of (global) integration. • Thesignificantincrease of world trade / peoplemovement. • The global competition / regionalcompetition. • The global flow of capital, jobs, goods and services. • The global cause and effect model (domino effect). • Standardizationvspersonalization (local, cultural influence). • Theincrease of thevalue of global corporationsvstheincrease of the national debts. • ?

  43. Logistics (Global) Performance Index (LPI 2012)

  44. SupplyChain Management • LPI 2012 – Logistics Performance Index • The International LPI provides qualitative evaluations of a country in six areas by its trading partners. • Themethod of research: a survey- logistics professionals working outside the country. • Primary data for the LPI 2012 index is available for 155 countries. http://lpisurvey.worldbank.org/international/global/2012

  45. SupplyChain Management • LPI 2012 – Logistics Performance Index • Customs • Infrustructure • International shipment • Logistics competence • Tracking and tracing • Timeliness / delivery on time Sixkeydimensions of LPI evaluation http://lpisurvey.worldbank.org/international/global/2012

  46. LPI 2012 http://lpisurvey.worldbank.org/international/global/2012

  47. LPI 2012 • LPI 2012 – Logistics Performance Index http://lpisurvey.worldbank.org/international/global/2012

  48. LPI 2012 • Logistics Performance Index – world map http://lpisurvey.worldbank.org/international/global/2012

  49. Questions ? • dr Marian Krupa

  50. ExamQuestions (2): • Definethetermsintegration and collaborationinthe global SCM context. • Elaborate on specificmethods, strategies and toolsused to enablecollaboration. • Isyour country amongtheworld’s most globalisedcountries? Whatcouldit do to improveitsposition form logistics point of view (LPI 2012)? • Identifyexamples of companies/products whichattempt to think global and actlocal.

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