Chapter 4 Managing logistics internationally
Framework Enablers l. Commoditized transportation l. Information and communication technology l. Factor costs l. Economies of scale Drivers Activities Management of international logistics l. Network design l. Risk management l. Governance l. Local responsiveness/Time to market l. Inventory and handling costs l. Transportation breakdowns l. Geopolitical threats (war, terror) Risks
Content Drivers and logistics implications of internationalization The tendency towards internationalization The challenge of international logistics and location Organizing for international logistics Managing for risk readiness
Drivers and logistics implications of internationalization • Key issue 1 What are the trade-offs between responsiveness to local markets and economies of scale?
Drivers and logistics implications of internationalization Motivations for International Expansion • Increase Market Share – domestic market may lack the size to support efficient scale manufacturing facilities • Return on Investment • large investment projects may require global markets to justify the capital outlays • weak patent protection in some countries implies that firms should expand overseas rapidly in order to preempt imitators
Drivers and logistics implications of internationalization Motivations for International Expansion • Economies of Scale or Learning – expanding size or scope of markets helps to achieve economies of scale in manufacturing as well as marketing, R & D or distribution – can spread costs over a larger sales’ base – increase profit per unit • Location Advantages – low cost markets may aid in developing competitive advantage – may achieve better access to: • Raw materials • Key customers • Lower cost labor • Energy
Drivers and logistics implications of internationalization Need for Global Integration International Corporate-Level Strategy High Global strategy Transnational strategy Multidomestic strategy Low High Need for Local Responsiveness
Drivers and logistics implications of internationalization • Strategy and operating decisions are Multidomestic decentralized to strategic business units (SBU) in each country strategy • Products and services are tailored to local markets • Business units in one country are independent of each other • Assumes markets differ by country or regions • Focus on competition in each market • Prominent strategy among European firms due to broad variety of cultures and markets in Europe Logistical network: Mainly national; Sourcing, storage and shipping on a national level and duplicated by country
Drivers and logistics implications of internationalization Global strategy • Products are standardized across national markets • Decisions regarding business-level strategies are centralized in the home office • Strategic business units (SBU) are assumed to be interdependent • Emphasizes economies of scale • Often lacks responsiveness to local markets • Requires resource sharing and coordination across borders (which also makes it difficult to manage) Logistical network: Limited number of production locations that ship to markets around the globe through a highly internationalized network with limited localized warehouse and resources.
Drivers and logistics implications of internationalization • Seeks to achieve both global efficiency and Transnational local responsiveness • Difficult to achieve because of simultaneous strategy requirements - strong central control and coordination to achieve efficiency - decentralization to achieve local market responsiveness • Must pursue organizational learning to achieve competitive advantage Balanced local sourcing and shipping (e. g. for customized products and local specialties) and global sourcing and shipping (for example for commodities).
Drivers and logistics implications of internationalization The International Supply Chain Suppliers Domestic/Import Sourcing Order Processing Corporation Inbound Materials Storage Inventory Management Storage Domestic/Export Distribution Order Placement Transportation Physical Materials Distribution Management Outbound Materials Order Processing Throughflow Order Processing Supplier-Firm Interface Transportation on Customers Transportation Costumer-Firm Interface Physical Customer Distribution Service Management Inventory Management Forward and Reverse Flow of Information, Products, and Funds Inventory Management
Drivers and logistics implications of internationalization Inventory Internationalization Transport Handling
Drivers and logistics implications of internationalization Scale economics Global consolidation Sourcing of commodity items from low-wage economies Concentration at specific sites Bulk transportation
Drivers and logistics implications of internationalization Risks in international logistics External risks l. Language and culture uncertainty l. Political risks l. Macroeconomi c risks Internal risks l. Supply options l. Inventory policy l. Transportation and distribution arrangements
Case study • The Deskjet-plus is one of several printers manufactured by the Vancouver Division of HP.
Case study Factory-localization Stage 1: printed circuit board assembly and test (PCAT), performed at factory Raw head driver board Logic board Head driver board Stage 2: final assembly and test (FAT), performed at factory North America DC Vancouver plant • Application-specific integrated circuits • Read-only memory • Raw logic board • Motors • Flex cables • Key pad board • Plastic mechanics • Plastic-skin • Carriage motor • Plastic-gears Europe DC Asia Pacific DC shipment to different DCs
Case study • Three major sources of uncertainty can affect HP’s supply chain: Delivery of incoming materials (late shipments, wrong parts, and so forth) Internal process (process yields and machine downtimes) Demand Delays in replenishing stocks at the DCs Inventory buildup or backorders at the DCs
Case study • Under ‘factory-localization’, HP ships different versions of the Deskjet-Plus to two non-US DCs by sea, with a transit time of about a month. • This long lead time limits DC’s ability to respond to fluctuations in the demand for different versions of the product. • To ensure prompt service for the customers, European and Far East DCs have to maintain high levels of safety stocks.
Content Drivers and logistics implications of internationalization The tendency towards internationalization The challenge of international logistics and location Organizing for international logistics Managing for risk readiness
The tendency towards internationalization • Key issue 1 How can we picture the trade-offs between costs, inventories and lead times in international logistics?
The tendency towards internationalization • Focused market Vs. focused factory
The tendency towards internationalization The advantages and disadvantages of focused factory Cost Lead time Specialized Lower production equipment may be Advantages costs through able to manufacture economies of scale quicker Longer distance Higher transport from market will Disadvantages cost increase lead time
The tendency towards internationalization • Centralized inventory Distribution costs most important Shorter delivery time Longer delivery time Inventory costs most important Local inventories Centralized inventories Lower demand volatility Greater demand volatility
The tendency towards internationalization • Centralized inventory Slowest-moving lines, least predictable. Lead time Inventory level Inventory of medium velocity, less predictable demand line. Direct shipment of fastmoving, predictable lines. C Factory/Vendor B Regional distribution centers A Local transshipment point
Case study 1 Improving the forecast accuracy of product-mix demands is very difficult. Improve process yields, and to reduce machine downtimes at the plant. DC-localization 2 3 Localization at DCs Factory manufacture and ship a generic Deskjet-plus printer without the power supply module and manual DCs localize the generic product to different specific options as needed Reduce shipment lead time between manufacturing and distribution, for example, shipping by air. Quick shipment is costly.
Case study Localization materials Stage 1: printed circuit board assembly and test (PCAT), performed at factory • Application-specific integrated circuits • Read-only memory • Raw logic board Raw head driver board • Motors • Flex cables • Key pad board • Plastic mechanics • Plastic-skin • Carriage motor • Plastic-gears Logic board Head driver board Stage 2: final assembly and test (FAT), performed at factory US version Unlocalized printer Localization materials • US version • European versions • Far East versions performed either at factory or at DC
Case study Inventory levels at all sites of Deskjet-plus printer’s supply chain Factory. DClocalization Far East DC European DC US DC Factory 13. 4 9. 8 0 11. 0 5. 2 3. 5 0 5. 2 3. 2 0 0 Printers 2. 8 Localization materials 3. 9 0 Printers Localization materials
Content Drivers and logistics implications of internationalization The tendency towards internationalization The challenge of international logistics and location Organizing for international logistics Managing for risk readiness
The challenge of international logistics and location • Key issues 1 2 What are the risks in international logistics in terms of time and inventory? How can the risks be addressed?
The challenge of international logistics and location Extended lead time The complexity of international logistics Extended and unreliable transit times Multiple freight modes and cost options Multiple consolidation and break points
The challenge of international logistics and location Domestic logistics Inventory in supply chain=90 units 3 0 2 0 3 0 1 0 Plant transit DC transit supplier customer International logistics Inventory in supply chain=170 units supplier 3 0 2 0 Plant Transit 2 0 2 0 Origin Ocean Destination transit forwarder 3 0 1 0 DC transit customer
The challenge of international logistics and location Activity: Multiple freight modes and cost options Freight mode Industry Cost Speed Availability Air O O Sea O O Rail O O Road O O
The challenge of international logistics and location Location analysis Phase Strategic decision to restructure and invest in plant network Project plan Specification of project plan Implementation of plan Geographical scope Continent (e. g. Asia, Europe) 3 to 4 countries Regions within selected countries Location within regions Selected location
The challenge of international logistics and location • Four-phase decision making process 1. Deciding upon the appropriate level of centralization-decentralization 2. Selecting relevant location criteria • • • The availability of physical infrastructure The availability of warehouse sites Central position in the regional market 3. Selecting criteria weightings 4. An economic trade-off analysis of structures and relevant locations
Content Drivers and logistics implications of internationalization The tendency towards internationalization The challenge of international logistics and location Organizing for international logistics Managing for risk readiness
Organizing for international logistics • Key issue 1 How can supply chains be better organized to meet the challenges of international logistics?
Organizing for international logistics Layering and tiering Evolving role of individual plants Reconfiguration processes
Organizing for international logistics • Postponed manufacturing – A specific combination of the three generic types of postponement (Bowersox and Closs, 1996) Logistics postponement • Form postponement: postponement of final postponement manufacturing or processing activities • Time postponement: delaying of the forward postponement movement of goods until customer or orders have been received • Place postponement: positioning of inventories postponement upstream in centralized manufacturing or distribution operations to postpone the forward or downstream movement of goods
Organizing for international logistics Activity at site Product assembly and product improvement and recommendation Achieving worldwide learning capabilities Postponed manufacturing Product customization Continental DC Changing role of DC Product packaging Warehousing and shipment Primary strategic contribution of the plant Achieving global efficiency Factory warehouse Access to production supplies Achieving local responsive capabilities Access to qualified suppliers National warehouse and deferred packaging National warehouse Proximity to markets
Organizing for international logistics Reconfiguration processes for companies Starting point Heritage in market Supply chain scope Focus Global structure Localized structure Little, greenfield approach Extensive, brownfield approach Narrow, involving inventory and final manufacturing Broad, involving inventory, manufacturing and sourcing Decentralizing final manufacturing and inventory into market Centralizing inventory and final manufacturing at continental level and globalizing manufacturing and sourcing Tendency Multiple, relocating within Single, placing activities into market and moving outside market Timetable Short (1 -10 months) Long (number of years) Authority Global, top-down directions Local, bottom-up iterative process
Stages in the implementation of postponed manufacturing: local starting point
Stages in the implementation of postponed manufacturing: global starting point
Organizing for international logistics Supply chain reconfigurations involved in postponed manufacturing Industry software Wine Transport Telecom Pharma Fashion Sourcing and primary manufacturing Inventory keeping Final distribution manufacturing Service and sales
Content Drivers and logistics implications of internationalization The tendency towards internationalization The challenge of international logistics and location Organizing for international logistics Managing for risk readiness
Managing for risk readiness • Short term risk readiness – – – Inventory policies to reflect volatility Transportation network redesign Reconsider sole and global sourcing arrangements • Long term risk readiness – – Develop contingency plans and risk protocols Audit preparedness Train plant management and staff Report to senior management on risk profiles and preparedness
Managing for risk readiness • DELL case: global sourcing and transportation post 9 -11 – The events of 9 -11 changed the dynamics of importing and exporting products into the USA • Air traffic control • post 9/11 customs and security requirements for global trade • Order increasing
Managing for risk readiness • Flexible Strategy – Flexibility to take advantages of different scenarios – Requires a flexible supply chain • multiple suppliers • flexible facilities • various distribution channels – Can be expensive to implement • coordination mechanisms • capital investments • loss of economies of scale
Managing for risk readiness • Implement Flexible Strategy – Production shifting: flexible factories and excess capacity and suppliers – Information sharing: anticipate market changes – Global coordination – Political leverage
Скачать презентацию Chapter 4 Managing logistics internationally Framework Enablers
e3ec3d5859aa049818952b282001439a.ppt