UT Knoxville BUAD 331 - Chapter 9 (22 pages)

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Chapter 9



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Chapter 9

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Pages:
22
School:
University of Tennessee
Course:
Buad 331 - CBM I: Supply Chain Mgt
CBM I: Supply Chain Mgt Documents

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BA331 Supply Chain Management Chapter 9 Shay Scott Ph D Department of Marketing and SCM Managing Director Global Supply Chain Institute University of Tennessee sdscott utk edu The Extended Global Supply Chain Offshore contract manufacturing outsourced customer service long lead times supply chain disruptions all symptoms of the extended global supply chain All requirements of the new paradigm in global trade Markets are not homogenous and coordination requirements are high 2 Why firms go global Increase revenue If a company can successfully expand into foreign markets it can increase its revenue When a foreign competitor moves into your market competing with them in their home market may help level the playing field Decrease costs Making and selling more units typically lowers your cost per unit economy of scale Moving some business functions e g manufacturing to lower cost regions may lower overall cost 3 A Semi Globalized World Several major trends have led to major changes in companies supply chains The decline of economic protectionism An increase in economic integration and free trade NAFTA EU APEC ASEAN MERCOSUR Global competition among global companies for global consumers Technological advances that ease and lessen cost of communication 4 What is so Different about Global SCM To put it simply It s difficult to plan and execute People are extremely different across cultures CAGE Cultural Administrative Geographical Economic Companies sometimes abandon basic decision making processes and underestimate differences E g Strategy Cost Benefit Analysis Partnerships are necessary but difficult Complexity is exponentially higher due to differences Number of competitors markets and customers Distances languages time zones cultures customs Fundamental differences in approach to business and life 5 Twin Challenges for Global Supply Chains World markets are not homogenous variety is still very much required How to offer local markets variety they want while still gaining



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