BA 331 ch. 9Increase Revenue When a foreign competitor moves into your market, competing with them in their home market may level the playing field Decreasing costs 1. Economy of scale 2. moving functions to lower cost regions may lower overall cosrs OutsourcingHiring another firm to do a process for you outside your domestic country offshoringMoving manufacturing to a foreign country We've seen a decline in ________ ________ economic protectionism What RTA's have seen to more trade? NAFTA, EU, APEC, ASEAN, MERCOSUR, TPP What is so different about Global SCM? (HPCPC) 1. Hard to plan and execute 2. People are different across cultures 3. Companies sometimes abandon basic decisions and underestimate these differences 4. Partnerships are necessary but difficult 5. Complexity is higher due to differences What are some complexities due to these differences? (3) 1. # of competitors, markets and customers 2. distances, languages, time zones, cultures, customs 3. Fundamental differences in approach to business and life What are the "Twin challenges" 1. Markets are not homogenous, variety is required 2, Requirement for coordination to offset higher costs. Consumers want a global brand to provide _________ levels of value in all of their markets equitableWhy can apple provide equitable levels of value well? Small market and high profit margin 2 factors that are apart of Competitive global advantage 1. Configuration 2. Coordination ConfigurationWhere and in how many nations CoordinationHow dispersed activities, are coordinated OffshoringRelocating a function to another country If we're completely local we _______ Manufacture locally If we are global we _______BA 331 ch. 9Manufacture globally and bring it locally and globally Network Strategies (FIPE) 1. Focused Factories 2. Inventory Centralization 3. Postponement 4. End to end visibility / event mgmt Focused Factories Specialization, associate with EU. Provide Economy of scale but increase lead time and variability Inventory Centralization Keep rare parts central. Reduces total inventory holdings. Caterpillar PostponementUnfinished printers held in regional DC's finish and ship orders when recieved End to end visibility / Event MGMT We can't communicate w/o great IT systems. 90% of decisions are routine and 10% get flagged. 4 trends have led to major changes in SC's (DIGT) 1. Decline of economic protectionism 2. Increase in economic integration 3. global competition among global companies for global consumers 4. tech advances that ease and lessen cost of communication Global SC involves more _______ about shipment in transit uncertaintyMore touch points = More complexity, variability & uncertainty What is the key to global? global planning and coordination, local