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TAMU SCMT 309 - 9.18 - Lecture on CHP3

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Chapter 3 – Global Dimensions of Supply Chain ManagementThree Eras of GlobalizationThe first era was initially driven by countries (1400-1800) seeking materials and goods not available in their own land.The second era of globalization (1800-2000) was driven by companies seeking goods and materials, labor, economies of scale, and marketsIn the 3rd era of globalization………..Global Logistics – Factors influencing a firm to enter international marketsStage of the product life cycle – ‘s’ curveSource of New Products and Ideas – iphone 6 is designed in the united states, but the components of the phone come from Japan, Taiwan, Italy, and we send all of the items to china to have it manufactured, and it is distributed worldwide.Excess Capacity – chevy has a plant, the cost of that plant is 1 million dollars, the plant can make 1,000 cars per year; the cost of each car is 1,000$; GET MORE FAMILIAR WITH EXCESS CAPACITY.Geographical Diversification – Coca-Cola sells more outside of the United States than within the United States.Market Potential -Sourcing of MaterialsSupply Chains in a Global Economy – economies and companies could improve their ‘wealth’ by allowing specialization of tasksThe advantage is true as long as you can sell the increased volume that is produced. It is an important role of logistics to help extend the market area of countries or companies through improved efficiency to lower the “landed cost” in new market areas.The Scope and Magnitude of Global Business –The ability to connect to individuals and companies across the globe and to connect computer information systems on a 24/7 basis has provided unparalleled opportunity for collaboration horizontally and vertically in supply chainsThe trade volume with China was 18.2 percent………Major Exporting Countries :ChinaUnited StatesGermanyMajor Importing Countries :United StatesChinaGermanyTop Trading Countries with USTop 5 Countries:Global Markets and Strategy –The global business environment has changed significantly and become much more conducive to business activity between and among different countries.Success in the global market place requires developing a cohesive strategy, including product development, technology, marketing, manufacturing, and supply chains.Global Markets and strategy have 4 important characteristics:Standardization reduces complexityGlobal competition reduces the product life cycleTraditional organizational structures and business models frequently changeGlobalization introduces more volatilitySupply Chain Security – A Balancing ActGiven the importance of global trade to the United States, a delicate balance exists between security and the efficient flow of global commerceMore cargo inspections, much more paperwork, and a longer time to clear united states borders are now a realityC-TPAT (Customs – Trade Partnership Against Terrorism) is a cooperative effort to secure the global supply chain and to facilitate legitimate cargo and conveyance.Ports – ports are a critical part of global supply chains and also a major focus for global securityAmericas ports….Logistics Characteristics of Global Markets –North American Free Trade Agreement (NAFTA) – no fee for import/exportsMaquiladora Operations –Single European MarketEastern EuropeAsian Emergence –Pacific RimChinaJapanNew DirectionsDRAYAGE – transferring of trailer between separate vehicles.Nafta and the European Union – Benefit (x variable) & Autonomy (y variable)You have complete autonomy on what you can do; NAFTA is closer up to the autonomy scale on the y-axisThe European union is closer to the benefit scale further on the x-axisEU Membership –Why does turkey propose a problem in EU Membership?Ottoman Empire, you have Islamic states on one side and then you have Christian States; Also, Turkey borders Asia and Europe.Logistics Characteristics of Global Markets: Eastern EuropeCurrently restructuring but generally working to improve from former communist-style governmental restrictionsOlder infrastructure is holding these nations back from full participation in global marketsGovernments have been selling assets to use for capital investmentFuture is uncertain, but markets are large enough to attract foreign capital if political environment is seen as stableLogistics Characteristics of Global Markets: Asian EmergenceThe pacific rim nations have emerged as key players in the global business environmentIn the first 3 months of 2000, imports from Pacific Rim countries accounted for 32.9 percent of total United States Imports.Japan, Korea, Taiwan, and Singapore purchased 24.7 percent…………………..New DirectionsLocating factories and logistics facilities in countries that use or consume the productsFocused ProductionA plant produces only one or two products.Logistics Characteristics of Global Markets –Offshore plants and logistics facilitiesFocus production plants often require complex logistics facilitiesGeneral expansion of worldwide marketsWorldwide growth of affluenceGrowth of Caribbean, Australia, African, Russian, and Eastern European Markets9.18 – SCMT309 Chapter 3 – Global Dimensions of Supply Chain Management -Three Eras of GlobalizationoThe first era was initially driven by countries (1400-1800) seeking materials and goods not available in their own land.oThe second era of globalization (1800-2000) was driven by companies seeking goods and materials, labor, economies of scale, and marketsoIn the 3rd era of globalization………..-Global Logistics – Factors influencing a firm to enter international marketsoStage of the product life cycle – ‘s’ curveoSource of New Products and Ideas – iphone 6 is designed in the united states, but the components of the phone come from Japan, Taiwan, Italy, and we send all of the items to chinato have it manufactured, and it is distributed worldwide.oExcess Capacity – chevy has a plant, the cost of that plant is 1million dollars, the plant can make 1,000 cars per year; the cost of each car is 1,000$; GET MORE FAMILIAR WITH EXCESS CAPACITY. oGeographical Diversification – Coca-Cola sells more outside of the United States than within the United States.oMarket Potential - oSourcing of Materials-Supply Chains in a Global Economy – economies and companies could improve their ‘wealth’ by allowing specialization of tasksoThe advantage is true as long as you can sell the increased volume that is produced. It


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