scm 406 quiz 4

true or false : eu imports about the same it sells

true

why would you move to global sourcing

1. cost reduction 2. inflation 3. raw materials are better (Peru and Cotton)

how much of the world's gop is produced outside the us

80%

how much of the world's population lives outside the us

95%

US top 3 trading partners

China Canada Mexico

globalization from a buyers perspective

access to goods and services worldwide cost benefits (labor, materials, etc)

costs higher in global sourcing

administrative costs (qualification, identification, travel, brokers fee)

characteristics of sustainability leaders

ceo commitment to sustainability separate function of sustainability separate sustainability reporting process long term goals

risks of global sourcing

communication and cultural barriers pipeline inventory issues quality issues distance staffing

risks of global sourcing : quality issues

companies may have to increase their quality control processes and supplier audits

what drives companies to move from domestic to international purchasing

competitive advantage no domestic suppliers suitable raw materials inflation

impact of a weak dollar on cost of goods

cost tends to be relatively more than originally agreed upon

benefits of global sourcing

cost/price quality access to technology availability competition to domestic sources presence in foreign markets

drivers of sustainability

customers prefer sustainable products/services legislative/political pressure resource scarcity competitors increasing commitment to sustainability stricter requirements from partners along the value chain

costs common to global and domestic sourcing

decrease in labor materials increase in lead time, transportation, inventory

risks of global sourcing : pipeline inventory issues

delays disruptions

three pillars of sustainability

economic environmental social

why is sustainability important

enhanced company image and goodwill competitive advantage customer loyalty employee engagement

quantitative elements associated with global sourcing

exchange rate uncertainties direct costs of importing goods indirect costs of importing goods

characteristics of outstanding global sourcing

executive commitment to global sourcing rigorous and well-defined processes availability of needed resources integration through information technology supportive organizational design structured approaches to communication methodologies for measuring savings

true or false : us sells more than it imports

false

ture or false : china imports more than it sells

false

impact of a strong dollar on cost of goods

firm can realize savings through the exchange rates

costs specific to global sourcing

foreign costs (duty charges, customs fees, import fees, currency exchange) government regulations

globalization from a sellers persepctive

global brands are the present the creation of market segments that cross geographic and cultural boundaries creates increased competition the market for China and India are huge

level 4 of sourcing

global strategies integrated across worldwide locations

level 5 of sourcing

global strategies integrated across worldwide locations and functional groups

environmental pillar of sustainability

impact of business on the quality and quantity of natural resources improved pollution and emissions management minimize waste, water, emissions, pollution, etc reduction in energy consumption investment in clean technologies recycling

qualitative elements associated with global sourcing

impact of national interest ethical consequences of sweat shop labor hazardous working conditions in foreign countries should be evaluated

risks of global sourcing : communication and cultural barriers

important information can get lost or altered in translation companies may not understand business norms across cultures bribery

what are the major differences between international purchasing and global sourcing

international - traditional BSR global - strategic BSR

level 2 of sourcing

international purchasing as needed

level 3 of sourcing

international purchasing as part of sourcing strategy

barriers to worldwide sourcing

lack of skills culture, customs, language currency fluctuations increased supply risk longer lead times resistance to change

sustainability

meeting the needs of the present without compromising the ability of future generations to meet their own needs

risks of global sourcing : staffing

must either hire experts or develop specialists who have experience in global purchasing management, quality control, international business law, and accounting

global sourcing definiton

practice of sourcing from the global market for goods and services worldwide

steps to get to know your supply chain

provide incentives for identifying, disclosing , and addressing problems collaborate with non-governmental groups to facilitate monitoring and help suppliers self-identify problems make use of improving Chinese government data to augment internal supply chain transparency efforts work with multibrand forums to standardize Chinese supplier audit data at first-tier and lower-tier suppliers encourage environmental transparency as an efficiency tool

sustainable procurement

supplier selection and evaluation sustainability scorecard development of green products/inter-firm processes setting of sustainability goals sustainability supplier awards contracting and tendering

risks of global sourcing : distance

time zones

global sourcing procurement implications

to search, evaluate, and work with suppliers around the world to develop efficient operations and maintain controlled risks with these suppliers to keep cost down

TEN cycle

transparency engagement networks