Mba Exams

Chapter 10

Global Logistics and Risk Management

10.1 Introduction

About one-fifth of the output of U.S. firms is produced overseas. One-quarter of U.S. imports are between foreign affiliates and U.S. parent companies. Since the late 1980s, over half of U.S. companies increased the number of countries in which they operate.

1

International Supply Chain Management

Dispersed over a larger geographical area Offers many more opportunities than just the domestic supply chain Risk factors are also present

International Supply Chains

International distribution systems

Manufacturing still occurs domestically, but distribution and typically some marketing take place overseas.

International suppliers

Raw materials and components are furnished by foreign suppliers Final assembly is performed domestically. In some cases, the final product is then shipped to foreign markets.

Offshore manufacturing

Product is typically sourced and manufactured in a single foreign location Shipped back to domestic warehouses for sale and distribution

Fully integrated global supply chain

Products are supplied, manufactured, and distributed from various facilities located throughout the world.

2

Forces toward Globalization

Global market forces. Technological forces. Global cost forces. Political and economic forces.

Global Market Forces

Pressures created by foreign competitors, as well as the opportunities created by foreign customers. Presence of foreign competitors in home markets can affect their business significantly. Much of the demand growth available to companies is in foreign and emerging markets. Increasing demand for products throughout the world through the global proliferation of information.

3

Global Market Forces

Particular markets often serve to drive technological advances in some areas. Companies forced to develop and enhance leading-edge technologies and products. Such products can be used to increase or maintain market position in...