Integrating Global Supply Chain and Marketing

7/29/2019 Integrating Global Supply Chain and Marketing

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Integrating Global

Supply Chain andmarketing



Presentation Overview

• GLOBAL SUPPLY CHAIN DEFINED• TOPIC EXPLANATION

• SURROUNDING ISSUES• REAL WORLD EXAMPLE



Global Supply Chain

An integrated process where several businessentities such as suppliers, manufacturers,distributors, and retailers work together to plan,coordinate and control materials, parts, andfinished goods from suppliers to customers. Oneor more of these business entities operate indifferent countries.



Supply Chain process



GLOBEL OPERATION DECISION



Supply for the manufacturing

• Domestic unavailability of some materials

• Poor quality materials at domestic market

• Higher local prices

• Low domestic technological standards



TRANSPORTATION

• 3 types of transportation

(1)Air (2) ship (3)road &rail

• Choice of transport methods

• How quickly final consumer requires the goods?

• The weight, size and handling characteristics of transporteditems

• Just in time product demand

• Costs of intermediate goods handling and storage



Manufacturing operations:-• (a) Widely desperate economic, technological and social

environments influence the production process in various states.

• (b) Coordination of the activities of production units in different

parts of the world may be difficult and complex.

• (C) Material and other inputs often have to be moved betweencountries. This could be expensive and involve lengthy delays.

• (D) Wage cost in developed and underdeveloped countries differ

enormously.



Global Marketing

• The process of conceptualizing and then conveying a finalproduct or service worldwide with the hopes of reaching theinternational marketing community.



• standardization• Developing standardized products marketed worldwide with a standardized marketing mix

• Essence of mass marketing

• adaptation• Mixing standardization and customization in a way that minimizes costs while maximizingsatisfaction

• Essence of segmentation

• Think globally, act locally



McDonald’s Global Marketing Marketing Mix Element Standardization Localized

Big Mac

Brand name

Advertisingslogan “I’m

Loving It”

Free-standing

Big Mac is$3.10 in U.S.

and Turkey

Product

Promotion

Place

Price

McAloo Tikka potatoburger (India)

Slang ’Macca’s

(Australia)

MakDo (Philippines)

McJoy magazine,“Hawaii Surfing

Hula” promotion

(Japan)

Home delivery(India)

Swiss rail systemdining cars

$5.21 (Switzerland)

$1.31(China)



Falling International Trade BarriersMean…



…Rising Profits.



Advantages of Global Supply Chains• Reduced total costs

• Inventory reduction

• Improved fulfillment cycle time

• Reduce cycle time• Increased forecast accuracy

• Productivity increase

• Improved capacity

• Expand international connections

• Increase intellectual assets

• Delivery improvement



Potential Global Supply ChainObstacles• Inefficient transportation and distribution systems

• Market instability

• Language Barriers

• Customs• Political turmoil

• Trade imbalances

• Export surges and recessions



Combating Obstacles• Join nation groups

• Be innovative

• Be flexible

• Research

• New technology

• Vertically integrate

• Form consortiums



Classical Logistic Issues

• Facility Locations

• Sourcing

• Distribution



INTERNATIONAL INFLUENCES ON LOGISTICISSUES…



Costs• Local labor rates

• Local space costs

• International freight tariffs

• Currency exchange rates



Customs Duty • Duty rates differ by commodity and level of assembly

• Impact of GATT: Changes over time

• Transfer pricing

• Duty Suspension



Taxes on Corporate Income

• Different markups by country

• Tax havens and not havens

• Make vs. buy effect



Offset Trade and Local Content

• Local content requirement for government purchases

• Content for preferential duty rates

• Offset trade requirements



Export Regulations• Export licenses

• Denied parties list



Time• Lead time

• Cycle time

• Transit time

• Export license approval cycle

• Customs clearance



Selecting a global supply chain model.



Different Types of Global Supply ChainModels

• Own and manage your own infrastructure

• Use strategic alliances

• Partner with an asset-based third-party

• Partnership with a global integrator of logistics services



Own and Manage Your OwnInfrastructure

Pro

• Maximumcontrol

Con

• Heavy costs



Use Strategic Alliances

Pro

• Convenience

• Large areas covered

Con

• Unreliable alliance-prone



Partner With An Asset-Based Third-Party

Pro

• Operational standards

• Uniform identity and

marketing strength

• Dedicated mgmt structure

Con

• Ignorance of complexcustoms regulations

•

Lack of connections• Local economic downturns



Partnership With a GlobalIntegrator of LogisticsPro

• Customer friendly

• In-country knowledge

• True information systemsintegration

• Uniform standards

Con

• Limited use

• Less control



Example – Digital EquipmentCorporation

Implemented a global supply chain model and…

• Reduced plants from 33 to 12

• Manufacturing costs decreased by $500million

• Logistics cost decreased by more than $300million

• Reduced service facilities from 34 to 17



• Annual cost reductions of more than $80 million

• Physical assets reduced by $34 million

• Inventory reduced by $74 million

• Increased unit reduction by 500 percent

• Increased revenue



Summary of Global Supply Chains

• Advantages include reduced costs, delivery performance, inventory reduction, forecastaccuracy, cycle-time, productivity, capacity,service, international connections

• Overcomes a variety of internationalobstacles

• Selecting and implementing a global supply chain model is effective when combined

with flexibility



Conclusion

Supply chain is the major function of thebusiness .Multinationals supply chain process is

very complex. Its contain different channels tocommunicate and to market .Its function is

divided in to territories from one territory toanother and the major element which we have tosee in this regard because culture varies somarketing techniques placement of product variesethics dilemma occurs other thing is that

negotiation with suppliers also vary.. The projectshow you the two side of one big picture whichstart from raw material till end consumer.

Integrating Global Supply Chain and Marketing

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