Chapter 2 International Supply Chain Management

Chapter 2 International Supply Chain Management

1. Containers

   • Introduced in 1956 but had impact in international trade until 1970´s. DHL: 1969 Federal Express (FedEx): 1973 Air transportation.

2. Customer Satisfaction

   • -Accurate (right parts, right quantity). -Complete (no back-ordered parts). -Packaging appropriate. -Specific time frame.
   • Materials Requirement Planning (MRP)
     • Management tool to determine what to produce and what quantity, in function if what it sells to its customers.
   • Just-in-time
     • Management philosophy (Japan 1970´s-1980´s)->planning the manufacturing of goods in such a way that they are produced just before they are needed in the next step of the assembly process.
   • Distribution Resources Planning (MRP)
     • Management tool that allows a retail firm to determine what to order from its suppliers and in which quantity, in function of what it sells to its customers. 

3. Transformation into strategic advantage

   • IBM six greatest challenges
     • Cost containment
       • +Fuel Cost +Need for flexibility +Expectations of internal and external customers
     • The visibility to the supply chain
       • Management of information that is generated in the supply chain (analized and distributed right).
     • Risk management
     • Increasing customer demands
       • -Delivery performance -Cost containment -Information availability -Levels of service
     • The globalization of the economy
     • Sustainability efforts

4. Logistics & Supply Chain Management

   • Supply Chain Management
     • Logistics
       • Physical aspects of the movement of goods from supplier and customers.
       • International logistics
         • Elements
           • The environment
             • -Language and culture.  -Differences in the infrastructure of international logistics.
           • Decisions about transportation
             • -Distances. -Modes of transportation. -Different carriers. -Transportation documents. -Transit times.
           • Intermediaries involved
             • -Banks. -Insurance companies. -Freight forwarders. -Goverments.
           • Risks and hazards
             • -Packaging
           • International insurance
           • International means of payment
           • Terms of trade
             • Incoterms
           • Crossing of borders
           • Sustainability
     • International Supply Chain Management
       • Integrates domestic and international logistics. Management of relationships with suppliers and customers (domestic and foreign).

5. Economic Importance of Logistics

   • Percentage of GDP spent on logistical: USA->8.5% GDP China-> 18.3% GDP World-> 10.4%
   • International reverse Logistics
     • Management of products, packaging returned by customers.
   • International logistics
     • International logistics represents the 15% of the total volume of international trade

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