Global Supply Chain

Management

Presented by :-
Nayan Gaurav (PG08052)
Nayan Gaurav04/03/09
 We are moving towards a global economy.
One way of approaching that is to pull the
covers of your head.
Another is to say :- It may be more complicated-
but that’s the world I am going to live in.
I might as well be good at it.

Phil Condit- CEO of BOEING, November 1999

Nayan Gaurav04/03/09
Presentation overview
 Global supply chain defined
 Topic explanation
 Surrounding issues
 Real world example
 Summary

Nayan Gaurav04/03/09
 Global supply chain
 An integrated process where several
business entities such as suppliers,
manufacturers, distributors, and retailers
work together to plan, co-ordinate and
control materials, parts and finished goods
from supplier to customers. One or more of
these business entities operate in different
countries.

Nayan Gaurav04/03/09
Falling international
trade barrier mean..

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….Rising profit

Nayan Gaurav04/03/09
Advantages of global supply
chain
 Reduced total cost
 Inventory cost reduction
 Improve fulfillment cycle time
 Reduced cycle time
 increase forecast accuracy
 Productivity increased
 Improve capacity
 Expand international connection
 Increase intellectual capital
 Delivery improvement

Nayan Gaurav04/03/09
 Global Supply-Chain Issues
Supply chains in a global
environment must be able to
þ React to sudden changes in parts
availability, distribution, or shipping
channels, import duties, and currency
rates
þ Use the latest computer and transmission
technologies to schedule and manage the
shipment of parts in and finished products
out
þ Staff with local specialists who handle
duties, freight, customs and political
Nayan Gaurav04/03/09
Potential global supply chain
Obstacle
 Inefficient transportation and distribution
system.
 Market instability
 Language barrier
 Customs
 Political turmoil
 Trade imbalance
 Export surges and recessions

Nayan Gaurav04/03/09
 Combating obstacle
 Join nation nation groups
 Be innovative
 Be flexible
 Research
 New technology
 Vertically integrate
 Form consortium

Nayan Gaurav04/03/09
 Classical logistic issues
 Facility location
 Sourcing
 distribution

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International influences
on logistic issues or
factors..

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 Costs
 Local labor rates
 Local space cost
 International freight tariffs
 Currency exchange rate

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 Custom duty
 Duty rates differ by commodity and level of
assembly
 Duty drawback
 Impact of GATT / WTO : changes over time
 Transfer pricing
 Duty suspension

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Taxes on corporate income

 Different markups by country

 Tax havens and not havens
 Make vs. Buy effect

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 Offset trade and local
content
 Local content requirement for government
purchases
 Content for preferential duty rates
 Offset trade requirements

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 Export regulation
 Export licenses
 Denied parties list

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 Time
 Lead time
 Cycle time
 Transit time
 Export license approval cycle
 Customs clearance

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Competencies Needed for
Efficient Global SCM

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 Selecting a global
supply chain model

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 Different types of global
supply chain model
 Own and manage your own infrastructure
 Use strategic alliances
 Partner with an asset based third party
 Partnership with a global integrator of
logistics services

Nayan Gaurav04/03/09
 Own and manage your own
infrastructure

 Pro
-maximum control

 Con
-heavy cost

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 Use strategic alliance

 Pro
- convenience
- large areas covered

 Con
- unreliable alliance-prone

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 Partner with an asset-based
third party
 Pro
- operational standards
- uniform identity and marketing strength
- dedicated management structure

 Cons
- ignorance of complex custom regulation
- lack of connections
- local economic downturn

Nayan Gaurav04/03/09
 Partnership with a global
integrator of logistics
 Pro
- customer friendly
-in country knowledge
- true information system integration
- Uniform standards

 Con
- limited use
- less control

Nayan Gaurav04/03/09
Example-

Nayan Gaurav04/03/09
 GSCM at Digital Equipment Corp.
ØHISTORY

1957: Founded by Ken Olsen

1961: Started Construction of first computer PDP-1
1978: Took Over the majority of minicomputer market
1980: Second Largest Computer company in the world
1990: DEC suddenly found its sales faltering
1998: DEC was sold to Compaq
2002: Compaq was taken over by HP
2003: Digital Global Soft is a well respected IT service company in India.
Earlier it was 51% subsidiary of DEC

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 Digital equipment
corporation
Implemented a global supply chain model and
ØReduced plant from 33 to 12
ØManufacturing cost decreased by $500
million
ØLogistic cost decreased by more than $300
million
ØReduced services facility 34 to 17
ØAnnual cost reduction of more than $80
million

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ØPhysical asset reduced to $34 million
ØInventory reduced by $74 million
ØIncreased unit reduction by 500 percent
ØIncreased revenue
ØFive times more computers were sold.

Nayan Gaurav04/03/09
Summary of Global supply
chains
 Advantage include reduced cost, delivery
performance, inventory reduction, forecast
accuracy, cycle time, productivity, capacity,
service, international connection
 Overcome a variety of international
obstacles.
 Selecting and implementing a global supply
chain model is effective when combined with
flexibility.

Nayan Gaurav04/03/09
THANK YOU ALL FOR
LISTENING

Nayan Gaurav04/03/09