Global Supply chain Management

18MBASC401
Unit 1

Dr. Malini T N, Assoc. prof., NMIT

 Content
 Introduction
 Role of the supply chain
 Managing the supply pipeline for global trade flows
 National and International logistics
 Factors driving global supply chain management
 Customs and global supply chain management
 Trends towards globalization in scm
 Management of the Inventory in the supply chain analysis
including vender management
 Factors contributing to the development of logistics
 The new competitive framework
 Global logistic management process
 Problems and challenges faced by global supply chain and
logistic management
Dr. Malini T N, Assoc. prof., NMIT
 Introduction to SCM
 A supply chain is a network of facilities and
distribution options that performs the functions of
procurement of materials, transformation of these
materials into intermediate and finished products
and the distribution of these finished products to
the customers.
 Supply chain management is the process of
planning, implementing and controlling the
operations of supply chain as efficiently as possible.
Supply chain management spans all movement and
raw material, work in process and finished goods
from point of origin to the point of consumption.
Dr. Malini T N, Assoc. prof., NMIT
Introduction of Global Supply Management
 Global competition is transforming the way products are
produced and moved around the world.
 A new structure namely global supply chain has evolved
which is able to take advantage of the unique
competitive advantages in different countries.
 This structure needs to be properly tied with the
procurement, processing, and distribution activities of a
multinational firm.
 Given the reduced trade barriers, it’s now possible to
garner the competitive advantage that differing
countries have to offer.
 The various value adding activities of the supply chain
can be strategically dispersed among various countries
and coordinated to produce competitive advantage.
Dr. Malini T N, Assoc. prof., NMIT
 Introduction
 An integrated process where several business entities
such as supplies, manufacturers, distributors and
retailers work together to plan, coordinate and control
material, parts and finished goods from suppliers to
customers. One or more of these business entities
operate in different countries.

 Going “global” through global supply chains helps

facilitate entry into new markets, enables business
growth and provides firms with access to new
technologies through partnerships with foreign
firms.
Dr. Malini T N, Assoc. prof., NMIT
 Global Supply Chain System Components

International distribution systems :Manufacturing(domestically),

Distribution (overseas)
International suppliers :Raw materials and Components(foreign
suppliers),Final assembly/ Manufacturing(domestically)
Offshore manufacturing: domestic warehouses for sale and
distribution.
Fully integrated Product is sourced & manufactured in a single
foreign location, Shipped back to global supply chain: Products
are supplied, manufactured and distributed from factories
located throughout the world
In a truly global supply chain, it may appear that the supply
chain was designed without regard to national boundaries.
The true value of a global supply chain is realized by taking
advantage of these national boundaries
Dr. Malini T N, Assoc. prof., NMIT
 Role of Supply chain Management
 The sequence of events in a goods flow, which adds value
to the value of a specific good.
 These events may include conversion, assembling and
disassembling and movements and placements.
 The global supply chain crosses international
boundaries.
 A global logistics supply pipeline embracing
procurement, manufacturing the goods, quality control,
handling cargo on container, delivery to distribution
center, unloading container, delivery to store, bought by
consumer.
 The key to a successful supply chain is customization,
innovation, scalability, multi channel, security and
flexibility.
Dr. Malini T N, Assoc. prof., NMIT
Comparison between domestic and
international logistics
 Companies realize that trading overseas raises
standards at all levels with in the company and develops
a fast moving management culture change.
 National logistics operator serving local indigenous
market – aware of the structure of the market.
 Its infrastructure and all its elements, in particular
regulations all the costing elements from manufacturer/
production to distributor/ consumer, the supply chain
under the national government.
 Common language, a range of economic/ industrial
indices indicating the changing market/trends, taxation
levels, employment law, consumer protection and
competitive law.
Dr. Malini T N, Assoc. prof., NMIT
Cont…
 International logistic operator in designing the
supply chain permeates several countries and
may extend to several miles.
 It is a distant market & embraces numerous
conventions and complex regulations especially
in the area of trade law, international finance,
market entry regulations, customs, taxation,
language, transport regulations, product
specification, agency law, appointment of
direction, capital structure of company.

Dr. Malini T N, Assoc. prof., NMIT

Factors driving global SCM
 A centralization of a one production center-
may be more than one- generates long lead
times of supply.
 Global Cost factors
 Outsourcing
 International transportation
 Integrated suppliers

Dr. Malini T N, Assoc. prof., NMIT

Factors contributing to the
development of logistics
 The development of information technology.
 Infrastructure and International trade(WTO)
 Global container network
 Development of hub to spoke global container
network with the expansion of multi modalism.
 Mega container operators.(Inhouse global
logistic)
 Shorter product lifecycle, driven by a fashion
conscious international market and continuous
technical advancement, favors logistic
efficiency.

Dr. Malini T N, Assoc. prof., NMIT

 Cont…
 Improvement in the global infrastructure.
 Entrepreneurs' demand for total logistics product services.
 Mega logistic global operator
 Development of 3PL contractors
 The development of the free trade, free zones and
distriparks.
 Companies are primarily concerned with reducing delivery
times and improving responsiveness to customers,
reflecting the shorter product lifecycles they face.
 Equal emphasis is placed upon cost savings and improved
service quality.
Dr. Malini T N, Assoc. prof., NMIT
Managing the supply pipeline for
global trade flows
 Managing the flow of goods, information and
money across borders is highly complex,
regulated and dynamic process.
 GSCM is the core competency that justifies a
continuous investment in people, technology
and resources or it is a process best managed
by a partner whose primary focus and business
is achieving excellence in global trade
management.(GTM)
 The benefits of outsourcing all or part of
company operations may be summerized:

Dr. Malini T N, Assoc. prof., NMIT

 Cont…
Many companies do not believe that GTM is or should
be a core internal competency. The ability to scale
GTM resources and capabilities quickly & cost
effectively.Outsourcing partnerships typically provide
companies with better visibility/ transparency to their
GTM performance.
 Improves operational performance and process
control.
 Ability to scale global trade actives with out adding
resources/ cost.
 Reduction in customs duties paid.
 Better managed brokers network.
Dr. Malini T N, Assoc. prof., NMIT
Cont…
 Faster cycle time.
 More intelligent business decisions.
 Companies that trade globally also face an
increased level of financial risk.
 As Supply chain become more fragmented and
dispersed, the risk of terrorism, theft, smuggling,
counterfeiting and other issues also increases.
 Many companies engage in global trade to reduce
cost, particularly to find less expensive sources of
raw materials, finished goods or labor, but viewed
from prospective, total cost may actually increase
by going global.

Dr. Malini T N, Assoc. prof., NMIT

 Customs and GSCM
 Materials and goods are moved from one country to another
country, borders are crossed and any goods or materials
shipped/air freighted become subjected to customs authorities
control.
 Customs is an official department that administers and collects
the duties levied by the government on imported goods
 Customs authorities, by administering and supervising the
movement of goods and materials across national frontiers play
a key role. Costs for business:
1. Direct cost associated with paying duties embracing
2. Costs for business associated with the compliance of import
restrictions
3. Costs (opportunity cost) by failing to take advantage of any
customs regime or trade concessions.

Dr. Malini T N, Assoc. prof., NMIT

 Inefficient management of customs control can lead to
increased inventory costs, delays at frontiers and loss in
supply chain responsiveness. Custom facilities available to
buyers:
1. Import into free circulation(subject to import licenses)
2. Customs warehousing
3. Free zones
4. Inward processing relief supervision
5. Processing under customs control
6. Temporary importing
7. Returned goods relief
8. End use
9. Goods are re exported, destroyed or disposed with out
payment of duties
Dr. Malini T N, Assoc. prof., NMIT
Customs facilities for exporters
 Export goods
 Outward processing relief
 Community transit
 ATA carnet
 TIR carnet

Dr. Malini T N, Assoc. prof., NMIT

Documents required
• Bill of Entry:
• Commercial Invoice.
• Bill of Lading / Airway bill :
• Import License.
• Insurance certificate.
• Purchase order/Letter of Credit.
• Technical write up, literature etc. for specific
goods if any.
• Industrial License if any.

Dr. Malini T N, Assoc. prof., NMIT

Management of the Inventory in the SC
analysis – Vender management

 Each one in the supply chain process hold differing

inventory strategies.
 Cycle time – inventory - cost
 Inventory – working capital- company efficiency and
competitive pricing strategy.
 Causes for excess inventory:
 Loss of sales, Price strategy, obsolescence, absence if
a range of effective inventory management
measures, Planning, suppliers performance and
analysis, A unified approach embracing buying and
ordering transaction.
Dr. Malini T N, Assoc. prof., NMIT
 Inventory analysis
 Developing a lean inventory

Dr. Malini T N, Assoc. prof., NMIT

New competitive framework
 Technology domination
 Drone delivery
 Dominance of AI
 Online tracking of products

Dr. Malini T N, Assoc. prof., NMIT

Problems & challenges in GSCM
 Currency fluctuation
 Maintaining IP protection
 Identifying and assuring the reliability of International
Business
 Accessing financing and insurance
 Compliance with international regulations and standsrds

Dr. Malini T N, Assoc. prof., NMIT

Trends towards GSCM
 Outsourcing
 Technological Implications: Automation, IoT, AI,
AMR(Autonomous mobile robots ), Block chain
 Hub and spokes model implication
 MHE (Material handling equipment)
 Omnichannel scm
 Last Mile delivery
 Sustainability

Dr. Malini T N, Assoc. prof., NMIT

Thank You

Dr. Malini T N, Assoc. prof., NMIT