Critical Thinking in (Logistic Management)

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MGT322Ch4.pdf

Slide 4.1

Harrison and van Hoek, Logistics Management and Strategy: Competing T hrough the Supply Chain , 4th Edition, © Pearson Education Limited 2011

Part Two: Leveraging logistics operations

Slide 4.2

Harrison and van Hoek, Logistics Management and Strategy: Competing T hrough the Supply Chain , 4th Edition, © Pearson Education Limited 2011

Chapter 4:

Managing logistics internationally

Slide 4.3

Harrison and van Hoek, Logistics Management and Strategy: Competing T hrough the Supply Chain , 4th Edition, © Pearson Education Limited 2011

Slide 4.4

Harrison and van Hoek, Logistics Management and Strategy: Competing T hrough the Supply Chain , 4th Edition, © Pearson Education Limited 2011

Figure 4.1 Decision framework for international logistics

Slide 4.5

Harrison and van Hoek, Logistics Management and Strategy: Competing T hrough the Supply Chain , 4th Edition, © Pearson Education Limited 2011

Internationalization

The designing of a product in such a way

that it will meet the needs of users in many

countries or can be easily adapted to do so.

Slide 4.6

Harrison and van Hoek, Logistics Management and Strategy: Competing T hrough the Supply Chain , 4th Edition, © Pearson Education Limited 2011

• 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 prevent imitators

Drivers and logistics implications of

internationalization

Motivations for International Expansion

Slide 4.7

Harrison and van Hoek, Logistics Management and Strategy: Competing T hrough the Supply Chain , 4th Edition, © Pearson Education Limited 2011

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

• Lower cost labor

• Key customers

• Energy

Slide 4.8

Harrison and van Hoek, Logistics Management and Strategy: Competing T hrough the Supply Chain , 4th Edition, © Pearson Education Limited 2011

Table 4.1 The fourth-generation global shift in Europe

Slide 4.9

Harrison and van Hoek, Logistics Management and Strategy: Competing T hrough the Supply Chain , 4th Edition, © Pearson Education Limited 2011

Table 4.2 Dimensions of different internationalism strategies (Source: Based on Yip, 1989, and Bartlett and Ghoshal, 1989)

Slide 4.10

Harrison and van Hoek, Logistics Management and Strategy: Competing T hrough the Supply Chain , 4th Edition, © Pearson Education Limited 2011

Drivers and logistics implications of

internationalization

Multidomestic

strategy

• Strategy and operating decisions are decentralized to strategic business units (SBU) in each country

• 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

Slide 4.11

Harrison and van Hoek, Logistics Management and Strategy: Competing T hrough the Supply Chain , 4th Edition, © Pearson Education Limited 2011

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.

Slide 4.12

Harrison and van Hoek, Logistics Management and Strategy: Competing T hrough the Supply Chain , 4th Edition, © Pearson Education Limited 2011

Drivers and logistics implications of

internationalization

Transnational

strategy

• Seeks to achieve both global efficiency and local responsiveness

• Difficult to achieve because of simultaneous 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).

Slide 4.13

Harrison and van Hoek, Logistics Management and Strategy: Competing T hrough the Supply Chain , 4th Edition, © Pearson Education Limited 2011

Drivers and logistics implications of

internationalization The International Supply Chain

Physical Distribution Management

Transportation

Corporation Suppliers Customers

Domestic/Import Sourcing

Domestic/Export Distribution

Throughflow Inbound Materials

Outbound Materials

Forward and Reverse Flow of Information, Products, and Funds

Physical Distribution Management

Transportation

Transportation

Order Processing

Order Processing

Order Processing

Order Placement

Inventory Management

Materials Management

Customer Service

Storage Storage Storage Inventory Management

Inventory Management

Costumer-Firm Interface

Supplier-Firm Interface

Transportation

Slide 4.14

Harrison and van Hoek, Logistics Management and Strategy: Competing T hrough the Supply Chain , 4th Edition, © Pearson Education Limited 2011

Drivers and logistics implications of

internationalization

External risks

Language and

culture

uncertainty

Political risks

Macroeconomi

c risks

Risks in

international

logistics

Internal risks

Supply options

Inventory

policy

Transportation

and distribution

arrangements

Slide 4.15

Harrison and van Hoek, Logistics Management and Strategy: Competing T hrough the Supply Chain , 4th Edition, © Pearson Education Limited 2011

Figure 4.2 The international logistics pipeline

Slide 4.16

Harrison and van Hoek, Logistics Management and Strategy: Competing T hrough the Supply Chain , 4th Edition, © Pearson Education Limited 2011

Figure 4.3 (a) Focused markets: full-range manufacture for local markets

(b) Focused factories: limited range manufacturing for all markets

Slide 4.17

Harrison and van Hoek, Logistics Management and Strategy: Competing T hrough the Supply Chain , 4th Edition, © Pearson Education Limited 2011

Figure 4.4 Inventory centralisation against logistics costs and service dimensions

Slide 4.18

Harrison and van Hoek, Logistics Management and Strategy: Competing T hrough the Supply Chain , 4th Edition, © Pearson Education Limited 2011

Figure 4.5 Delivery strategies in a global network

Slide 4.19

Harrison and van Hoek, Logistics Management and Strategy: Competing T hrough the Supply Chain , 4th Edition, © Pearson Education Limited 2011

Table 4.4 Three different delivery strategies

Slide 4.20

Harrison and van Hoek, Logistics Management and Strategy: Competing T hrough the Supply Chain , 4th Edition, © Pearson Education Limited 2011

Figure 4.6 Comparison of domestic and international logistics pipelines (Source: After van Hoek, 1998)

Slide 4.21

Harrison and van Hoek, Logistics Management and Strategy: Competing T hrough the Supply Chain , 4th Edition, © Pearson Education Limited 2011

Figure 4.7 The trade-off between cost and lead time for international shipping

Slide 4.22

Harrison and van Hoek, Logistics Management and Strategy: Competing T hrough the Supply Chain , 4th Edition, © Pearson Education Limited 2011

Figure 4.8 Location of Asian facilities

Slide 4.23

Harrison and van Hoek, Logistics Management and Strategy: Competing T hrough the Supply Chain , 4th Edition, © Pearson Education Limited 2011

Figure 4.9 Phases in the location selection process

Slide 4.24

Harrison and van Hoek, Logistics Management and Strategy: Competing T hrough the Supply Chain , 4th Edition, © Pearson Education Limited 2011

Table 4.5 Trade-offs between two locations Key: Score on a five-point scale ranging from poor to excellent

Slide 4.25

Harrison and van Hoek, Logistics Management and Strategy: Competing T hrough the Supply Chain , 4th Edition, © Pearson Education Limited 2011

Figure 4.10 Changing role of distribution centres

Slide 4.26

Harrison and van Hoek, Logistics Management and Strategy: Competing T hrough the Supply Chain , 4th Edition, © Pearson Education Limited 2011

Table 4.6 Differences in reconfiguration processes for companies depending upon

starting point (global or local)

Slide 4.27

Harrison and van Hoek, Logistics Management and Strategy: Competing T hrough the Supply Chain , 4th Edition, © Pearson Education Limited 2011

Figure 4.11 Stages in the implementation of postponed manufacturing: local starting

point (Source: van Hoek, 1998)

Slide 4.28

Harrison and van Hoek, Logistics Management and Strategy: Competing T hrough the Supply Chain , 4th Edition, © Pearson Education Limited 2011

Figure 4.12 Stages in the implementation of postponed manufacturing: global

starting point (Source: van Hoek, 1998)

Slide 4.29

Harrison and van Hoek, Logistics Management and Strategy: Competing T hrough the Supply Chain , 4th Edition, © Pearson Education Limited 2011

Figure 4.13 Example of physical infrastructure set-up with LLP origin in Asia (Source: Leeman, 2007)

Slide 4.30

Harrison and van Hoek, Logistics Management and Strategy: Competing T hrough the Supply Chain , 4th Edition, © Pearson Education Limited 2011

Figure 4.14 SCM tools and trade-offs in the supply chain

Slide 4.31

Harrison and van Hoek, Logistics Management and Strategy: Competing T hrough the Supply Chain , 4th Edition, © Pearson Education Limited 2011

Table 4.7 Comparing forward and reverse logistics (Source: Reverse Logistics Executive Council, http://www.rlec.org)

Slide 4.32

Harrison and van Hoek, Logistics Management and Strategy: Competing T hrough the Supply Chain , 4th Edition, © Pearson Education Limited 2011

Figure 4.15 CSR practices in the supply chain

Slide 4.33

Harrison and van Hoek, Logistics Management and Strategy: Competing T hrough the Supply Chain , 4th Edition, © Pearson Education Limited 2011

Table 4.8 NEC CSR supplier requests (Source: NEC Group CSR Guideline for Suppliers, http://www.nec.co.jp/purchase/pdf/sc_csr_guideline_e.pdf)

Slide 4.34

Harrison and van Hoek, Logistics Management and Strategy: Competing T hrough the Supply Chain , 4th Edition, © Pearson Education Limited 2011

Table 4.8 NEC CSR supplier requests (Continued) (Source: NEC Group CSR Guideline for Suppliers, http://www.nec.co.jp/purchase/pdf/sc_csr_guideline_e.pdf)