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)
