Global Supply chain
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This document discusses factors driving globalization and the implications for businesses. It notes that technology has reduced distances, and factors like IT, transportation, and trade policies have accelerated globalization. This creates intensifying competition for companies from around the world. The document also notes that most of the world's population and GDP now lies outside the US, and educational and income factors are shaping global consumption. It outlines six imperatives for global business success and emphasizes the importance of designing global supply chain networks that consider compatibility, configuration, coordination, and control across culturally diverse markets.
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Global Supply chain
- 1. POVERTY REDUCTION & HUMAN DEVELOPMENT Scanning and Global Supply Chain Design Arsala Khan
- 3. Factors of Globalization ? Technology has overcome much of the distance created by geography and culture. ? The pace of globalization depends on: 1. Advances in information and communication technology 2. Availability of reliable transportation 3. Reduction of protectionist trade policies
- 4. Globalization¡¯s Implications 1. Intensifying competition e.g. Nokia and unilever possess capital and technology needed to challenge rivals around the globe.
- 5. Importance of Global Markets ? 95% the world¡¯s population lives outside the U.S. ? 80% of the world¡¯s gross domestic product is produced outside the U.S. ? 50%+ of the population is under 20 years old in many countries ? Educational background and disposable income are prime factors motivating consumption decisions ? US companies earned $315 billion profits overseas in 2004, up 78% over the past decade.
- 6. Importance of Global Markets $3,000,000 $2,891,500 $2,500,000 $2,000,000 $1,820,641 $1,500,000 $1,493,400 m o n s $ $1,000,000 l i $771,994 $575,204 $387,401 $500,000 $299,490 $147,832 $219,183 $- 1990 1995 2000 Years Global Sales of U.S. Foreign Affiliates U.S. Exports - Goods U.S. Exports - Services
- 7. Global Business is Different Managers must consider four differences between Global and domestic operations. 1. Politics ¨Cpolitical stability and undercurrents that might jeopardize global business strategies. 2. Legalities ¨C requires competent legal counsel 3. Finance ¨C exchange rate risk and hedging; taxation issues 4. Culture ¨Cmust adapt to local views on time, personal space, worker/manager relations, individual accountability, etc.
- 9. ? EMPLOYMENT GENERATION & EMPLOYMENT GENERATION & CREATION OF PHSICAL ASSETS CREATION OF PHSICAL ASSETS Six imperatives are shaping the global competitive landscape: 2. Establish a Triadic Presence ¨C companies need to operate in the three major world markets ¨C U.S., E.U. and Asia 3. Utilized Beachheads ¨C use operations in industrialized countries as bridges into emerging markets
- 10. Six Globalization Imperatives 3. Achieve Seamless Performance Across Markets ¨C deliver the same high quality product with the same excellent service everywhere 4. Extend Reach Through Alliances ¨C alliance partners can provide market knowledge, technological expertise, operational know-how, and/or financial resources.
- 11. Six Globalization Imperatives 1. Compete in Competitors Home Market ¨C competition prevents cross profit subsidization 2. Coordinate Global Activities ¨C cross- pollination of ideas creates synergy while reducing redundancy
- 12. Designing a Global Network ?To insure access to customers and worldwide resources, companies are increasingly creating worldwide supply chain networks. ?Resources within the supply chain need not be owned by a single entity.
- 13. Designing a Global Network To insure supply chains are properly designed four criteria should be considered: 4.Compatibility ¨C need to align network design decisions with company¡¯s overall strategy 5.Configuration ¨C need to identify and consider issues that will affect network performance when deciding where to locate value added activities
- 14. Designing a Global Network 3.Coordination ¨C need to direct and integrate geographically dispersed activities 4.Control ¨C need for consistent and proper day-to- day decision-making at local value added facilities
- 15. THANK YOU!
- 16. QUESTIONS?