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1,Chapter16,InternationalLogisticsandSupply-ChainManagement,2,LearningObjectives,Tounderstandtheescalatingimportanceoflogisticsandsupply-chainmanagementascrucialtoolsforcompetitiveness.Tolearnaboutmaterialsmanagementandphysicaldistribution.Tolearnwhyinternationallogisticsismorecomplexthandomesticlogistics.Toseehowthetransportationinfrastructureinhostcountriesoftendictatestheoptionsopentothemanager.Tolearnwhyinternationalinventorymanagementiscrucialforsuccess.,3,InternationalLogistics,Internationallogisticsisthedesignandmanagementofasystemthatcontrolstheforwardandreverseflowofmaterials,services,andinformationinto,through,andoutoftheinternationalcorporation.,4,InternationalLogistics(cont.),Throughtheimplementationofinternationallogistics,thefirmcanimplementcost-savingprogramssuchasjust-in-time(JIT),electronicdatainterchange(EDI),andearlysupplierinvolvement(ESI).Thetwophasesofthemovementofmaterialsinclude:materialsmanagement,orthetimelymovementofmaterials,parts,andsupplies.physicaldistribution,orthemovementofthefirmsphysicalproducttoitscustomers.,5,ThreeConceptsofBusinessLogistics,TotalCostConcept,Trade-offConcept,SystemsConcept,6,Supply-ChainManagement,Supply-chainmanagementistheintegrationofbusinessprocessesfromenduserthroughoriginalsuppliers,thatprovideproducts,services,andinformationthataddvalueforcustomers.Supply-chainmanagementconnectsacompanyssupplysidewithitsdemandside.Itopensupsupplierrelationshipsforcompaniesoutsideofthebuyersdomesticmarket.,7,TheInternationalSupplyChain,PhysicalDistributionManagement,Transportation,Corporation,Suppliers,Customers,Domestic/ImportSourcing,Domestic/ExportDistribution,Throughflow,InboundMaterials,OutboundMaterials,ForwardandReverseFlowofInformation,Products,andFunds,PhysicalDistributionManagement,Transportation,Transportation,Transportation,OrderProcessing,OrderProcessing,OrderProcessing,OrderPlacement,InventoryManagement,MaterialsManagement,CustomerService,Storage,Storage,Storage,InventoryManagement,InventoryManagement,Costumer-FirmInterface,Supplier-FirmInterface,8,TransportationInfrastructure,Afirmslogisticsplatformisdeterminedbyalocationseaseandconvenienceofmarketreachunderfavorablecostcircumstances.Thepublicsectorsinvestmentpriorities,safetyregulations,taxincentives,andtransportpoliciescanhavemajoreffectsonthelogisticsdecisionsoffirms.Thelogisticsmanagermustlearnaboutexistingandplannedinfrastructuresabroadandathomeandfactorthemintothefirmsstrategy.,9,VesselsUsedinOceanShipping,LinerService,BulkService,TrampService,10,Airfreight,Airfreightisavailabletoandfrommostcountries,includingthedevelopingworld.Internationalairfreightisexpectedtogrowto190billiontonsin2005,comparedtoonly70billiontonsin1995.Fortypercentoftheworldsmanufacturedtravelbyair.Itemsthatarehigh-valueorhighindensitytendtotravelbyair.,11,ConsiderationsforSelectingaModeofTransport,Predictability,TransitTime,Cost,Non-economicFactors,12,ExportDocumentation,Abillofladingisacontractbetweentheexporterandthecarrierindicatingthatthecarrierhasacceptedresponsibilityforthegoodsandwillprovidetransportationinreturnforpayment.Acommercialinvoiceisabillforthegoodsstatingbasicinformationaboutthetransaction,includingadescriptionofthemerchandise,totalcostofthegoodssold,addressesoftheshipperandseller,anddeliveryandpaymentterms.Afreightforwarderspecializesinhandlingexportdocumentation.,13,InternationalInventoryIssues,Inventoriestieupamajorportionofcorporatefunds,thereforeproperinventorypoliciesshouldbeamajorconcerntotheinternationallogistician.Just-in-timeinventorypoliciesminimizethevolumeofinventorybymakingitavailableonlywhenneeded.Thepurposeofestablishinginventorysystemsare:tomaintainproductmovementinthedeliverypipelinetohaveacushiontoabsorbdemandfluctuations,14,ThreeFactorsthatDecidetheLevelofInventory,OrderCycleTime,DesiredCustomerServiceLevels,UseofInventoriesasaStrategicTool,15,InternationalPackagingIssues,Packagingisinstrumentalingettingthemerchandisetothedestinationinasafe,presentablecondition.Becauseoftheaddedstressofinternationalshipping,packagingthatisadequatefordomesticshippingmaybeinadequateforinternationalshipping.Packagingconsiderationsthatshouldbetakenintoaccountareenvironmentalconditionsandweight.Onesolutiontothepackagingproblemhasbeenthedevelopmentofinter-modalcontainers.Costattentionmustbepaidtointernationalpackaging.,16,StorageFacilities,Astationaryperiodisinvolvedwhenmerchandisebecomesinventorystoredinwarehouses.Thelocationdecisionaddresseshowmanydistributioncenterstohaveandwheretolocatethem.Storagefacilitiesabroadcandifferinavailabilityandquality.Thelogisticianshouldanalyzeinternationalproductsalesandthenrankorderproductsaccordingtowarehousingneeds.,17,SpecialTradeZones,Foreigntradezonesareareaswhereforeigngoodsmaybeheldorprocessedandthenre-exportedwithoutincurringduties.Tradezonescanbeusefulastransshipmentpointstoreducelogisticscostandredesignmarketingapproaches.Governmentsandfirmsbenefitfromforeigntradezones.,18,ExportProcessingZonesandEconomicZones,Inexportprocessingzones,specialrulesapplythataredifferentinotherregionsofthecountry.Thesezonesusuallyprovidetax-freeandduty-freetreatmentforproductionfacilitieswhoseoutputisdestinedabroad.ThemaquiladorasofMexicoareoneexampleofaprogramthatpermitsfirmstotakeadvantageofsharpdifferentialsinlaborcosts.Throughthecreationofspecialeconomiczones,theChinesegovernmenthasattractedmanyforeigninvestorsbringinginmillionsofdollars.,19,CentralizedLogisticsManagement,Ininternationallogistics,theexistenceofaheadquartersstaffthatretainsdecision-makingpoweroverlogisticsisimportant.Toavoidinternalproblems,bothheadquartersstaffandlocalmanagementshouldreporttooneperson.Thisindividualcancontributeanobjectiveviewwheninevitableconflictsariseininternationallogisticscoordination.,20,DecentralizedLogisticsManagement,Whenafirmservesmanydiverseinternationalmarkets,totalcentralizationmightleavethefirmunresponsivetolocaladaptationneeds.Ifeachsubsidiaryismadeaprofitcenterinitself,eachonecarriesthefullresponsibilityforitsperformance.Onceproductsarewithinaspecificmarket,increasedinputfromlocallogisticsoperationsshouldbeexpectedandencouraged.,21,OutsourcingLogisticsServices,Thesystematicoutsourcingoflogisticscapabilitiesisathirdoption.Bycollaboratingwithtransportationfirms,privatewarehouses,orotherspecialists,corporateresourcescanbeconcentratedonthefirmscoreproduct.One-stoplogisticsallowsshipperstobuyallthetransportationmodesandfunctionalservicesfromasinglecarrier.,22,TheSupplyChainandtheInternet,Becauseoftheinternet,firmsareabletoconductmanymoreglobalcomparisonsamongsuppliersandselectfromawidervarietyofchoices.Whencustomershavetheabilitytoaccessacompanythroughtheinternet,thecompanymustbepreparedfor24-hourorder-takingandcustomerservice.Forallcountries,butparticularlyindevelopingnations,theissueofuniversalaccesstotheinternetiscrucial.,23,LogisticsandSecurity,A

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