SC 121

• Domestic Logistics


  Relatively stable and consistent environment
• Global logistics


  Variety of different national, political, and Economic setting
• North American Logistics


  • Open geography
• European Logistician


  • Confronted by relatively compact Geography
• Pacific Rim logistical


  • Island based environment
• Logistics in a Global Economy


  Uncertainty, Increased Variation, Decreased control, Decreased Visibility
• Uncertainty


  Results from greater distances, longer leadtimes and decreased market knowledge
• Increased Variation


  Results from unique customer and documentation requirements
• Decreased control


  Results from the extensive use of international service firms, trade restrictions
• Decreased Visibility


  Longer transit and holding times with less ability to track
• Globalization Strategies


  • No international Strategy - involved only in domestic operations
  • Multi-domestic Strategy - operates in multiple nations with dominant country
  • Global operation strategy - cross border operations Intra-firm transfers - transactions between different Regions or countries
  • Transnational strategy - firms that maintain regional Operations around the globe
• Performance Cycle Structure


  • Major difference between domestic and global operations
• Transportation


  • International transportation ownership and operating rights carriers were limited to operating
  • Privatization-influence global operations
• Cabotage and bilateral agreements


  Influence impacting international trade
• Cabotage laws


  Require passengers or goods moving between two domestic ports to utilize only domestic carriers, designed to protect domestic transportation
• Infrastructure


  • Substantially less capacity and without extensive growth
• International Operations


  • Require multiple languages for both product and documentation
  • Unique national accommodations such as performance features, technical characteristics, environmental considerations, safety requirements
• Documentation


  • Sheer amount of documentation required
  • High incidence of counter trade and duty draw back
• Export irrevocable commercial letter of credit


  Contract between an importer and a bank
• Bank draft (bill of exchange)


  • Means of payment for an import/export transaction
  • Sight draft - payable on sight with proper documents
  • Time draft - some fixed time
• Bill of Lading


  Issued by the shipping company or its agent as evidence of a contract
• Combined transport document


  May replace bill of lading if goods are shipped by air or more than one mode
• Combined transport document


  May replace bill of lading if goods are shipped by air or more than one mode
• Commercial invoice


  Document written by the exporter
• Insurance certificate


  Explains what type of coverage is utilized
• Certificate of origin


  Denotes the country in which the goods were produced
• Information systems integration


  • Major challenge in globalization
• Types of system integration

  • Global transaction or ERP system
  • Global planning system
• Global transaction or ERP system


  Necessary to provide common data
• Global planning system


  Can maximize overall manufacturing and delivery asset utilization
• Alliances


  Without alliances it would be necessary for an enterprise operating internationally to maintain contacts with retailers, wholesalers, manufacturers, suppliers etc.
• Globalization is an evolving frontier that increasingly demands more extensive supply chain integration
• Challenges for low cost country sourcing


  • Identification of sources
  • Considers the protection
  • Relates to understanding import/export compliance issues
  • Relates to communication with suppliers
  • The need to guarantee
  • Concerns the inventory and obsolescence
  • Focuses on the need to understand