Term
| Global Supply Chain Management |
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Definition
| The design and management of supply chains that control the flows of materials, money, and information into, through, and out of the firm across national boundaries to achieve its corporate objectives at a minimum total cost |
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| Global is more complicated due to multiple participants and new types of organizations and role players. More challenging, greater distances, and many distances involved. Extensive product handling and shipment visibility issues |
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| Globalization's impact on operations |
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Definition
| Impacts supply chain operations since inventory is higher, transportation is more difficult and costly, facilities network more difficult to control, and service is slower and more costly |
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| Identifying, evaluation, negotiating, and configuring supply across multiple geographies to reduce costs, maximize performance, and mitigate risks. Aims to leverage global efficiencies in the creation of a product or service |
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| Material costs, transportation costs, inventory carrying costs, and cross-border taxes, tariffs, and duty costs. |
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| The production of goods by one firm, under the label or brand of another firm |
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| Advantages of contract manufacturing |
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Definition
| Low financial risks, minimizes resources devoted to manufacturing, and focus firm's resources on other elements of the value chain. |
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| Disadvantages of contract manufacturing |
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Definition
| Reduce learning potential, reduced control (may affect quality, delivery schedules), and potential public relations problems |
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| Three letter acronyms accompanied by specifically named place |
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| Main carriage paid by seller. Seller responsible for getting goods through port of export to port of import |
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| Arrival. Seller takes full responsibility for getting goods to the buyer's location |
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| Departure terms. Buyer has full responsibility from door of seller. Seller only makes the goods available at his own premises. |
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| Main carriage not paid by seller. Seller responsible for getting goods to port of export. Buyer responsible from port of export to their location |
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| Importance of Documentation |
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Definition
| Drives the entire export process. Multiple documents required varying by country of export/import and must be available in advance of shipment. Accuracy is essential, it impacts application of tariffs and errors create delays and costs. Reasonable care provision since the importer of record is responsible for knowing what they import and the terms of the transaction |
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| Describes the transaction from start to finish. Must provide price, country of origin, product description, model number |
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| Shipment has been received by transportation carrier and placed on board a vessel to destination. States terms in which goods are to be carried. Based on mode of transportation. Between carrier and customer for freight services |
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| Verifies the country in which the goods were manufactured. Impacts import restrictions, duty rates, and preferential duty treatment. |
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| Must be as specified in the contract of sale and must be issued by insurance companies or their agents |
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| Escrow-like agreement between buyer's and seller's banks which guarantees payment if seller meets specified terms of the sale |
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| Risks as freight moves through global supply chains |
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Definition
| Financial liability for own product loss, general average liability, and owners of goods that arrive safely have a liability toward owners of goods that did not arrive. |
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Definition
| Decision that it is not economical to buy insurance |
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| Firm transfers risk to insurance company for a price |
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| Firm retains some risk and transfers the rest |
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| Best insurance, it is the shipper's responsibility, plan for the worst conditions, carriers not liable for improperly packed freight, and insurance will not cover poorly protected goods. |
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Definition
| Least expensive transportation mode. High capacity, fuel-efficient vessels, slow transit time, higher risk of damage and theft. For seasonal, lower value, low risk consumer goods, bulk, large items. |
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Definition
| Fastest mode, shorter transit time, reduced inventory levels, less handling for lower damage rates, most expensive mode on weight and space basis, and limited carrying capacity limits volume moves. For high value, fragile, and perishable goods. |
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Term
| Service rationalization trends |
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Definition
| Ocean carriers increase as air freight decreases |
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| Freight volume imbalances |
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Definition
| High demand for U.S. bound equipment |
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Definition
| Fewer carriers leads to less competition |
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| The pricing pendulum has swung in favor of carriers. Reduced capacity=higher rater |
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| For resale after importation>$2,000 |
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| To interior destination for customs clearance under bond |
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Definition
| To enter customs-bonded warehouse. Maximum 5 years. No explosives or perishables |
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| Baggage declaration and entry |
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Definition
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| U.S. Customs and Border Protection |
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Definition
| The administer Tariff Act of 1930, assessment and collection of duties and taxes, enforcement of laws, administer navigation laws and treaties, and combat smuggling and fraud. |
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| Facility for receiving ships and transferring cargo. Many have cargo-handling equipment such as cranes and forklifts used to load/unload containers from ships. Other ports focus on bulk materials or equipment handling |
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| Primary goal of port selection |
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Definition
| To facilitate the quick transition of freight from international carriers to domestic carriers for customer delivery |
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Definition
| To avoid paying import duties on a product. Stored under bond and in the joint custody of the importer, or his agent, and the customs offices. |
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| Identifying problematic social, environmental, and health and safety issues throughout the supply chain, assessing their impact and risks, and then trying to improve them |
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| Advantages of Sustainability |
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Definition
| Reduces costs, risks, absenteeism. Improves productivity and property value. Creates a healthy environment and allows a company to become a leader and increase profits |
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Term
| How does globalization impact supply chain operations? |
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Definition
| Transportation is more difficult and costly |
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| Complex type of global sourcing, a company buys major components from independent suppliers on a global basis |
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| Domestic Purchasing arrangement |
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Definition
| A company buys major components from independent suppliers at home |
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| Offshore subsidiary sourcing |
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Definition
| A company procures major components from its foreign subsidiary |
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| Domestic in-house subsidiary |
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Definition
| A company procures major components in-house by procuring them domestically |
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| "Hands on" approach in global sourcing |
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Definition
| Companies work closely with suppliers, have centrally coordinated decision-making, and maintain site-based control of operational activities |
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Term
| What situation may contribute to international sourcing moving closer to the U.S.? |
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Definition
| Demand for faster customer service, the shrinking value of the U.S. dollar, and increase in fuel prices |
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| Goal of Supply Chain Management |
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Definition
| Boost inventory velocity and reducing the cycle time from purchase order placement to product sales |
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Term
| Incoterms are applied to which mode of transportation |
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Definition
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Term
| When would it be most appropriate to transfer risk by purchasing freight insurance? |
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Definition
| The shipment is high value and you are moving it internationally |
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| International logistics expert that specializes in booking space on ocean ships, processing documentation, and performing related activities |
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| International logistics experts that provide shoreside activities at port facilities to support intermodal transfer of containers and pallets |
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| International logistics experts hired to speed the flow of imported goods across the border and into the country |
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| What should you consider when choosing a mode of transportation for international freight? |
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Definition
| Product density, transit time, freight rates |
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| When choosing between international ocean service and international air service you must be aware of |
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Definition
| Service rationalization efforts, comparative freight rates, and product characteristics |
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| Ultimately responsible for managing the customs entry process, knowing the terms of the transportation, and using reasonable care to correctly bring the goods into the country |
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| Occurs after an import shipment has been successfully reviewed by customs and correct payments have been made for the duties. Goods are now ready to be moved to the final destination |
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| Facility used to delay payment of duties and store goods for up to five years under the joint custody of the importer or his agent, and customs |
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| What would a sustainability-focused cell phone manufacturer do with products that are traded-in or returned? |
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Definition
| Recycle, reuse, refurbish |
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| What should organizations do to reduce supply chain related carbon emissions? |
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Definition
| Shorten distance to suppliers and customers |
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| Three-step approach used by Deutsche Post World Net to reduce its carbon footprint |
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Definition
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| Promotes sustainability initiatives in the organization to make them work |
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Definition
| Experience the greatest impact on an organizations sustainability efforts |
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