International Logistics & Supply Chain Management

Presented By Ajinkya Bhavsar Shilpa Ingle Joju Johny Sudhir Singh ( 06 ) ( 11 ) ( 17 ) ( 50 )

Global Supply Chain

Definition An integrated process where several business entities such as suppliers, manufacturers, distributors, and retailers work together to plan, coordinate and control materials, parts, and finished goods from suppliers to customers. One or more of these business entities operate in different countries

Goal of the Global Supply Chain

Prompt and reliable delivery of high-quality products and services at the least cost. To effectively meet rising customer expectations

Practicality and Usefulness

Help companies compete all over the world Expand business operations Offer new services and applications to meet global customers needs Give company a competitive advantage Falling international trade barriers mean rising profits

Advantages of Global Supply Chains

Reduced total costs Inventory reduction Reduce cycle time Increased forecast accuracy Productivity increase Expand international connections Delivery improvement Diversified business and trading Competitive advantage Untapped markets Enhance speed and efficiency

Potential Global Supply Chain Obstacles

Member nations VS. Non member nations Inefficient transportation and distribution systems Market instability Different languages Differences in Currencies Differences in Measurement Systems (metric versus decimal) Different Customs, beliefs and cultures Political turmoil Trade imbalances Export surges and recessions Greater distance Tax Policies

Combating Obstacles
Duty specialists and trade specialists Join nation groups Banding together Form consortiums Vertically integrate Be innovative & Be flexible Research New technology Infrastructure improvements Reduce the number of stops in the chain

Recent changes effecting the Global Supply Chain

1. Internet and technological change
2. Proliferation of trade agreements

3. Falling Trade Barriers

4. Increase in international trade groups

5. New Markets

Different Types of Global Supply Chain Models

Own and manage your own infrastructure Use strategic alliances Partner with an assetbased third-party Partnership with a global integrator of logistics services

Global Sourcing
Global sourcing is a term used to describe practice of sourcing from the global market for goods and services across geopolitical boundaries.

Characteristics
1. Executive commitment to global sourcing 2. Rigorous and well-defined processes 3. Availability of needed resources

4. Integration through information technology

5. Supportive organization design 6. Structured approaches to communication 7. Methodologies for measuring saving

Outsourcing
Outsourcing or sub-servicing often refers to the process of contracting to a third-party. While outsourcing may be viewed as a component to the growing division of labor encompassing all societies. Advantages Focus on core competencies target your resources at what you do best Reduce costs a third-party provider may have greater economies of scale than you Access the third-party providers expertise

International Logistics

International Logistics
Definition designing and managing a system to control the flow of materials into, through, and out of a company. Two phases of the movement of materials: Materials management the timely movement of materials, parts, and supplies Physical distribution movement of the companys physical product to customers transport, warehousing and order processing

Logistics Flow

International Logistics
Cost-saving programs that can be part of international logistics - Just-in-time (JIT) purchasing and manufacturing - Electronic data interchange (EDI) - Early supplier involvement (ESI) (Before or early in the design phase of a project)

Classical Logistics Issues

Facility Locations Sourcing Distribution - The act and functions of physically distributing goods and services including the elements of transport, warehousing and order processing. Physical distribution is 10-25% of the total cost of an international order

International Transportation

Usually greater distances than with domestic transportation

Longer lead times (more planning needed) More chances for things to go wrong

Potential for delays at port or border

Modes of Transportation
Rail and truck
NAFTA countries

Ocean freight
Conventional cargo vessels
Container ships

Europe

Air freight

Pipeline

Selecting a Mode of Transportation

Transit time Important for highly perishable products Important when product is needed ASAP Predictability of delivery by a specific date Important when buyer needs product by specified date Cost of shipping per dollar of product value Important to economize on costs with bulky commodities

International Inventory Issues

Inventories tie up a major portion of corporate funds,therefore proper inventory policies should be a major concern to the international logistician Just-in-time inventory policies minimize the volume of inventory by making it available only when needed The goals of inventory systems are to Maintain product movement in the delivery pipeline Have a cushion to absorb demand fluctuations

Storage Facilities
A stationary period is involved when merchandise becomes inventory stored in warehouses The location decision addresses how many distribution centers to have and where to locate them Storage facilities abroad can differ in availability and quality Refrigerated facilities The logistician should analyze international product sales and then rank order products according to warehousing needs

International Packaging Issues

Packaging is instrumental in getting merchandise to the destination in a safe, presentable condition Food safety regulations Because of the added stress of international shipping, packaging that is OK for domestic purposes may be not be adequate for international shipping One solution to the packaging problem has been the development of inter-modal containers

Logistics and Security

After the terrorist attacks of 2001, companies have to deal with the fact that the pace of international transactions has slowed down and that formerly routine steps now take longer Logistics systems and modern transportation systems are often the targets of attacks New safeguards for international shipments affect the ability of firms to efficiently plan their international shipments.

Conclusions
The supply chain is complex, globally integrated and extends beyond the enterprise to third parties. Changes to the supply chain are being driven by company efforts to deliver better customer value, reduce costs, increase responsiveness and resiliency. IT duties and customs barriers are factors in internal business optimization and location decisions. New challenges are on the horizon as governments develop strategies to address security concerns. Security and efficiency are mutually reinforcing. Supply Chain complexities make government-industry partnership essential. Traditional trade facilitation issues and platforms provide an opportunity to expand global IT trade and also address new security concerns.

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