the impact of global logistics - copy
TRANSCRIPT
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THE IMPACT OF GLOBALLOGISTICS
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The global logistics management process
1. Environmental analysis
2. Planning
3. Structure
4. Plan implementation and
5. Controlling the logistics program
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Cost-service trade off analysis
i. Order completeness
ii. Shipping accuracy and
iii. Shipment condition
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Guidelines for developing a global logisticsstrategy
Logistics planning should be integrated into thefirms strategic planning process
Logistics departments must be guided by a clearvision and must measure output regularly
Import-export management should try to ensureintegrated management of all elements of thelogistics supply chain from origin to destination
Opportunities to integrate domestic andinternational operations should be pursued toleverage total company volumes with globallyoriented carriers
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The global logistics environment
1. Controllable elements
2. Uncontrollable elements
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Uncontrollable elements
i. Political and legal systems of foreign markets
ii. Economic conditions
iii. Degree of competition in each market
iv. Level of distribution technology available oraccessible
v. Geographic structure of the foreign market
vi. Social and cultural norms of various target markets
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Controllable elements
i. Customer service
ii. International Inventory issues
iii. International Packaging issues
iv. Transportation
v. Warehousing and storage
vi. Other activities like global sourcing of materials
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Issues related to global logistics
1. International customer service issues
2. International inventory issues
3. International packaging issues
4. International transportation issues
5. International warehousing and storage issues
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1. International customer service issues
Consumes longer time
Requires different types of transport carriers,
Multiple transfers and handling
Crossing of many international bordersTime in transit vary from shipment to shipment
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2. International inventory issues
International business have 50% or more of theirassets in inventory
Inventory levels differ depending on the length of
the transitIncludes unique factors such as currency exchange
rates, greater distances and custom duties
In case of high inflation, large inventories provide
inflation hedge
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3. International packaging issues
Handling of products
Climate
Potential for pilferage
Communication and language differencesFreight rates
Customs duties
Customers requirements
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Containers - advantages
Reduced cost due to loss or damage
Increased use of automated or mechanized materialhandling equipments
Lower warehousing and transportation costsAvailable in variety of sizes
Serve as temporary storage facilities at ports andterminals
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Containers- disadvantages
Delay caused in in-bound and out-bound cargo
Large capital expenditures are required to initiate acontainer
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4. International transportation issues
1. Infrastructure
2. Availability of modes
3. Choice of modes among the given alternatives
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a. Ocean or Sea transport
Liner service-regular scheduled passage on establishedroutes
Bulk service-contractual services for individual voyages
Tramp service- irregular routes and scheduled only ondemand
Based on the type of cargo carried
1. Conventional cargo vessels-oversized and unusual
cargo2. Container ships-standardised containers
3. Roll-on roll-off vessels-ocean going ferries
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Shipping documents used in ocean shipping
The standard shipping note(SSN)- what is to happento the goods on arrival at the foreign port
The bill of lading-shipping companys receipt for the
goods loaded
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b. Air transport or Air freight- advantages
Useful for transportation of perishable products,high value, high density products
Less stock holding in loading terminals
Speedier settlement of invoicesEliminates excess need of intermodal transportation
Facilitates JIT
Convenience and ease of administration
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c. Rail and road transport
International consignment note
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Choice of transport method
1. Transit time
2. Predictability
3. Cost of transportation
4. Non economic factors- govt pressure-UNCTAD-United Nations Conference for Trade andDevelopment
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5. International warehousing and storage issues
Storage facilities- bonded warehouse
Free ports- wider area at sea port and
free zones- near air ports
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