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