Professional Documents
Culture Documents
Issues in SCM
International suppliers
Offshore manufacturing
International Logistics
Costs comprise between 10% & 30% of the
Logistics
total landed costs of an International Order. Thus,
International Logistics is a competitive tool
Distance
Currency Fluctuations
Transportation Modes
Infrastructure
Availability of Modes
Ocean Shipping Liner Service (regularly
Container
Air Shipping
Types of Vessels
Container Ships
Breakbulk Ships
Combination Ships
Crude Carriers
Gas Carriers
10
Containers
General
Reefer
Tank
Dry
Purpose Containers
Containers
Containers
bulk Containers
Pre-cooling
Containers
Used at the farm level to
maintain Humidity and bring
down the temperature of the
product.
Portable Storage on
40Reefer Containers
13
Combis
Charter Planes
14
15
16
Transportation Documents
Packing List
Certificate of Origin
17
Payment Systems
Normal mode of payment in International Trade
is through Letter of Credit :
18
Forces Driving
Globalization
Technological Forces
Diffusion of knowledge
Many high tech components developed overseas
Need close relationships with foreign suppliers
For example, Canon has 80% of laser engines
Technology sharing/collaborations
Access to technology/markets
tax breaks
joint ventures
price breaks
cost sharing
McGraw-Hill/Irwin
Tariffs
Quotas
Voluntary export restrictions
Health/environmental regulations
Japanese automakers in US
TI/Intel factories in Europe
Japanese automakers in the EU
Japanese refused to import US skis for many years (different snow)
Up to 50% advantage for American companies on US Defense
contracts
McGraw-Hill/Irwin
Added Complexities
Substantial geographic distances
Added forecasting difficulties
Infrastructural Inadequacies
McGraw-Hill/Irwin
Added Complexities
Exchange rate uncertainties
Cultural differences
Political instability
tax rates
government control
McGraw-Hill/Irwin
Operational Strategies
To Address These Risks
Speculative Strategy
Hedged Strategy
Flexible Strategy
McGraw-Hill/Irwin