Supply Chain Test 3

What is the purpose of global sourcing?

- Reduce costs -become more competitive and innovative

How does globalization impact day-to-day operations?

-Access to lower wage rates -Access to customers in emerging markets -Reduction in transport and communication costs -Reduction in trade barriers -Availability of resources -Diversification to mitigate risks

What are the primary documents used in global trade?

-Commercial Invoice -Bill of Lading -Insurance Certificate -Certificate of Origin -Letter of Credit

What risks do organizations face as freight moves through global supply chains?

-Theft & piracy - Water damage - Handling & stowage issues - Fortuitous losses - Contamination of cargo by other cargo - Stowaways pilfer or contaminate cargo - Poor port handling due to inadequate equipment

Global Sourcing 5 Steps

1. Evaluate the spend category and user requirements 2. Identify and qualify potential suppliers 3. Select the supplier and negotiate the details 4. Plan and execute the Implementation 5. Monitor the results and take corrective action

What costs must be compared when considering global sourcing?

1. Freight Loss 2. Exchange Rate 3. Quality 4. Congestion 5. Transport Cost 6. Visibility

What are key supply chain information requirements

Accurate Accessible Portable Timely Reliable Relevant

Insurance Certificate

Assures coverage of loss or damage to the freight during transit

What government agency manages the process and what do they do?

CBP, US Harmonized Tariff Schedule

What to consider when picking mode of transportation

Capacity Transit time safety cost

How can organizations they protect themselves against freight problems

Damage Preventions Limit Theft opportunities Manage financial risk (incoterms)

the general differences between E, F, C, and D incoterms.

E - Departure Terms F- Main Carriage Unpaid C- Main Carriage Paid D - Arrival

What is involved in the U.S. customs entry process?

Entry Filing Arrival Examination Classification Taxation Release

Bill of Lading

Evidence of Contract of carriage, receipt of goods, document of title to the goods

How is global SCM different from domestic SCM?

Global SCM focuses on planning, implementing, and controlling the cross-border flows of materials, money and information between companies in different countries.

How can organizations delay or avoid paying import duties on products?

Go to the Foreign Trade zone - Goods can enter the FTZ without formal customs entry or payment of duties

Why is documentation so important in global transactions?

It drives the entire export process - moving information in a timely fashion is key to uninterrupted freight flows

Getting goods into the country of origin requires

Moving Goods Getting through customs post clearance

Commercial Invoice

Must identify buyer and seller -date and terms of sale, quantity, weight / volume of shipment, type of packaging, description of goods, unit value and total value, insurance, shipping and other charges

What benefits and capabilities are created by supply chain information technology?

Optimization Cross-chain Visibility Speed to Market Agility Collaboration Adaptability Differentiation Risk Management

What are the major categories of supply chain software? What is the purpose of each category?

Planning Execution Event Management Business Intelligence and Supporting Tools

Letter of Credit

Protects the buyer and seller, guarantees the seller will receive payment as long as delivery conditions are met

Planning

Supply chain planning solutions support the forward-looking process of coordinating assets to optimize the delivery of goods, services and information from supplier to customer, balancing supply and demand. SCP software sits on top of a transactional system to provide planning, what-if scenario analysis capabilities and real-time demand commitments, considering constraints.

Execution

The applications that direct manufacturing operations, oversee distribution processes like receiving and order fulfillment, and ship products Like foot soldiers, supply chain execution solutions carry out the plan created by the planning systems

What are INCOTERMS?

The global standard for the interpretation of the most common terms in foreign trade

Event Management

These systems are like watchdogs monitoring processes inside the four walls of a facility or across the supply chain for unexpected events that are out of tolerance for the plan—like the shortage of parts on an assembly line or the breakdown of equipment in a DC. In case of an event, the system sends an alert to a decision- maker by fax, e-mail, pager or on a PDA so immediate action can be taken.

Certificate of Origin

VVerifies the country in which the goods were manufactured, import restrictions, duty ratings, trade compliance and quotas

Distribution Channel

decisions regarding mode, carrier, and route selection to promote efficient, safe, and reliable delivery.

How do INCOTERMS help organizations manage global operations and transactions?

determine the seller's and buyer's respective obligations concerning responsibilities and charges for the transportation of goods from the seller's premises to the buyer's place

Communication Channel

documentation and information sharing activities geared toward creating visibility and control.

Transaction Channel

ownership transfer issues and responsibilities for freight management.

Documentation Success Factors

• Using the right documents • Availability in advance of shipment • Accuracy • Impacts application of tariffs • Errors create delays and costs