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CHAPTER14GlobalLogisticsStrategiesCopyright©2001byTheMcGraw-HillCompanies,Inc.Allrightsreserved.McGraw-Hill/Irwin14-2TheGlobalLogisticsManagementProcessaEnvironmentalanalysis1.Whataretheuniquecharacteristicsofeachnationalmarket?Whatcharacteristicsdoeseachmarkethaveincommonwithothernationalmarkets?2.Shouldthefirmclusternationalmarketsforlogisticsoperatingand/orplanningpurposes?3.Whoshouldmakelogisticsdecisions?4.Whatareourmajorassumptionsabouttargetmarkets?Aretheyvalid?5.Whatarethecustomersserviceneedsofthetargetmarkets?6.Whatarethecharacteristicsofthelogisticssystemsavailabletoourfirmineachtargetmarket?7.Whatareourfirm’smajorstrengthsandweaknessesrelativetoexistingandpotentialcompetitionineachtargetmarket?8.Whatareourobjectives,giventhelogisticsalternativesopentousandourassessmentofopportunity,risk,andcompanycapability?9.Whatisthebalanceofpaymentsandcurrencysituationintargetmarkets?Whatwillbetheirimpact(s)onourfirm’sphysicaldistributionsystem?PlanningCopyright©2001byTheMcGraw-HillCompanies,Inc.Allrightsreserved.McGraw-Hill/Irwin14-3TheGlobalLogisticsManagementProcess(cont.)Planimplementation10.Howdowestructureourlogisticsorganizationtooptimallyachieveourobjectives,givenourskillsandresources?11.Givenourobjectives,structures,andourassessmentofthemarketenvironment,howdowedevelopeffectiveoperationallogisticsplans?Specifically,whattransportation,inventory,packaging,warehousing,andcustomerservicestrategiesdowehaveforeachtargetmarket?StructureControllingthelogisticsprogram12.Howdowemeasureandmonitorplanperformance?Whatstepsshouldbetakentobringactualanddesiredresultstogether?14-2bCopyright©2001byTheMcGraw-HillCompanies,Inc.Allrightsreserved.McGraw-Hill/Irwin14-4GuidelinesforDevelopingaGlobalLogisticsStrategy•Logisticsplanningshouldbeintegratedintothecompany’sstrategy.•Logisticsdepartmentsneedtobeguidedbyaclearvisionandmustmeasureoutputregularly.•Import/exportmanagementshouldtrytoensureintegratedmanagementofallelementsofthelogisticssupplychain,fromorigintodestination.•Opportunitiestointegratedomesticandinternationaloperationsshouldbepursuedtoleveragetotalcompanyvolumeswithgloballyorientedcarriers.14-3Copyright©2001byTheMcGraw-HillCompanies,Inc.Allrightsreserved.McGraw-Hill/Irwin14-5FinancialAspectsofGlobalLogistics•Workingcapital•Inventory•Credit•Investmentinbuildingandequipment•Accommodationofmerchandiseadjustments14-4Copyright©2001byTheMcGraw-HillCompanies,Inc.Allrightsreserved.McGraw-Hill/Irwin14-6HowaLetterofCreditWorks1)Sellerasksbuyerforletterofcredit(L/C).2)BuyerasksitsbanktoissueL/Cinaccordancewithseller’sterms.3)Afterapprovingbuyer’screditline,buyer’sbanknotifiesseller’sbankthatithasissuedL/C.4)Seller’sbankeitheraddsconfirmation(guaranteespaymenttoseller)orsimplyadvisessellerthatL/Chasbeenissued.5)Sellermakesshipment,presentsdocumentsinaccordancewithL/C’sterms.6)Seller’sbankexaminesandapprovesdocuments,thensendsthemtobuyer’sbankbyairmailorcourier.7)Buyer’sbankexaminesandapprovesdocuments.Onceapproved,itdebitsbuyer’saccountandwiresmoneytoseller’sbank.8)Onreceiptoffunds,seller’sbankcreditsseller’saccount.(IfaconfirmedL/C,seller’sbankwouldhavepaidsellerafterStep6.)Source:AdaptedfromJamesAaronCooke,“WhatYouShouldKnowaboutLettersofCredit,”TrafficManagement29,no.9(Sept.1990),pp.44-45.14-5Copyright©2001byTheMcGraw-HillCompanies,Inc.Allrightsreserved.McGraw-Hill/Irwin14-7WarehousingQuestions•Doesthemarketfortheorganization’sproductjustifyalocalwarehouse?•Isgoodwarehouselaboravailable?•Howquicklydocustomersneedproductsdelivered?•Arethirdpartiesanoption?•Whataretherelevantcostsassociatedwithpublicversusprivatewarehousing?14-6Copyright©2001byTheMcGraw-HillCompanies,Inc.Allrightsreserved.McGraw-Hill/Irwin14-8NAFTA’sEffectonU.S.ExportstoCanadaandMexico020406080100120140160199319941995199619971998CanadaMexico*Figuresin$U.S.billions.Source:U.S.DepartmentofCommerce(1999).14-7Copyright©2001byTheMcGraw-HillCompanies,Inc.Allrightsreserved.McGraw-Hill/Irwin14-9StrategiesofLeading-EdgeCompaniesasaResultofNAFTA•Customerservice•Manufacturing•Channeldesign•Sourcing•Distribution•Salesandmarketing•Organization14-8Copyright©2001byTheMcGraw-HillCompanies,Inc.Allrightsreserved.McGraw-Hill/Irwin14-10FactorsthatDeterminetheAttractivenessofIndividualMarketsinEasternEurope•Degreeofcountryindebtedness.•Developmentofthebankingsystem.•Levelofproductivityofindustriesandindividualcompanies.•Qualityofworkforce.•Conditionofinfrastructure.14-9aCopyright©2001byTheMcGraw-HillCompanies,Inc.Allrightsreserved.McGraw-Hill/Irwin14-11FactorsthatDeterminetheAttractivenessofIndividualMarketsinEasternEuropecont.•Stateoftechnology•Depthofmanagerialskills.•Supplyofproductionmaterials.•Profitrepatriationregulations.14-9b
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