Effective supply chain management ppt

Supply Chain Management: International Issues in SCM and e supply chain management ppt and lean supply chain management ppt
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Published Date:18-07-2017
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Supply Chain Management: International Issues in SCM Donglei Du (dduunb.edu) Faculty of Business Administration, University of New Brunswick, NB Canada Fredericton E3B 9Y2 Donglei Du (UNB) SCM 1 / 32Table of contents I 1 Introduction 2 Forces Driving Globalization Global Market Forces Technological Forces Global Cost Forces Political and Economic Forces 3 Risks of international supply chains and how to address them 4 Flexible strategies Implementation 5 Additional issues in international supply chain management 6 Case Donglei Du (UNB) SCM 2 / 32Outline of this lecture I We introduce the opportunities and challenges in International Supply Chain Management. Donglei Du (UNB) SCM 3 / 32Section 1 Introduction Donglei Du (UNB) SCM 4 / 32International Supply Chain Management I International Supply Chain management is the same as domestic supply chain management spread over a larger geographic area. Although it seems that global supply chains are designed without regard to national boundaries, but the true value of a global supply chain can only be realized by taking advantage of these national boundaries. It is readily apparent that global operations and supply chains are becoming increasingly signi cantthis can be seen from some statistics below: 1/5 of output of US rms produced abroad US Companies hold 500 Billion in foreign asset stocks (7% annual growth) 1/4 of US imports between foreign aliates and US parent companies Donglei Du (UNB) SCM 5 / 32International Supply Chain Management II Over half of US companies increased the number of countries in which they operate (late 80?s to early 90?s) However, opportunities and challenges coexist Donglei Du (UNB) SCM 6 / 32Taxonomy of International Supply Chains I International Supply Chains range from a primarily domestic business with some international suppliers to a truly integrated global supply chain. International distribution: manufacturing occurs domestically, but distribution and marketing take place overseas. International suppliers: raw materials and components are furnished by foreign suppliers, but assembled domestically (probably shipped back to foreign countries for consumption). O -shore manufacturing: nished product is sourced and manufactured overseas and then shipped back to domestic warehouses for sale and distribution. Fully integrated global supply chain: products are supplied, manufactured, and distributed from variable facilities located throughout the world. Donglei Du (UNB) SCM 7 / 32Section 2 Forces Driving Globalization Donglei Du (UNB) SCM 8 / 32Forces Driving Globalization I Global Market Forces Technological Forces Global Cost Forces Political and Economic Forces Donglei Du (UNB) SCM 9 / 32Subsection 1 Global Market Forces Donglei Du (UNB) SCM 10 / 32Global Market Forces I Foreign competition in local markets Growth in foreign demand Domestic consumption from 40% to less than 30% of world consumption since 1970 One cause of the increasing demand throughout the world is the global proliferation of information. "People have became global citizens and so must companies that want to sell them things." Companies have to compete globally with universal products and the opportunity to hire talented employees worldwide. For example, you have to compete with Japanese consumer electronics, and Germany's machine tools and US's SUV'S worldwide. Donglei Du (UNB) SCM 11 / 32Subsection 2 Technological Forces Donglei Du (UNB) SCM 12 / 32Technological Forces I Di usion of knowledge Many high tech components developed overseas Need close relationships with foreign suppliers Technology sharing/collaborations Access to technology/markets Global location of R&D facilities Close to production (as cycles get shorter) Close to expertise (Indian programmers?) Donglei Du (UNB) SCM 13 / 32Subsection 3 Global Cost Forces Donglei Du (UNB) SCM 14 / 32Global Cost Forces I Low (unskilled) labor cost has been the decisive factor in determining factory location However recent studies show that the cost of cheaper unskilled labor were more than o set by the increase in other costs associate with operating facilities in foreign countries (Costs underestimated, bene ts overestimated). So we should also take into consideration of other cost priorities Integrated supplier infrastructure (as suppliers become more involved in design) Cheaper Skilled labor Capital intensive facilities costs often dominate other costs. Many governments are willing to provide incentives to attract business via tax breaks Donglei Du (UNB) SCM 15 / 32Global Cost Forces II joint ventures price breaks cost sharing Donglei Du (UNB) SCM 16 / 32Subsection 4 Political and Economic Forces Donglei Du (UNB) SCM 17 / 32Political and Economic Forces I Exchange rate uctuations and operating exibility On one hand, there are regional trade agreements (Europe, North America, Paci c Rim) to ease the globalization. On the other hand, there are trade protection mechanisms that a ect international supply chain decisions. Tari s and Quotas a ect importation, which may lead a company to stay domestically. Voluntary export restrictions can also a ect supply chain: For example, Japanese automakers were only to manufacturing more expensive cars only after they agree voluntarily to limit exports to US market. Local content requirements forces companies, like TI/Intel to manufacture microprocessors in Europe and Japanese automakers produce cars in the EU Donglei Du (UNB) SCM 18 / 32Political and Economic Forces II Government procurement policies: Up to 50% advantage for American companies on US Defense contracts Donglei Du (UNB) SCM 19 / 32Section 3 Risks of international supply chains and how to address them Donglei Du (UNB) SCM 20 / 32