2-3 pages double spacedQuestion 1 is sustainability and talk about it a little bit about what it is and how it is involved in supply chain”You know, I want you to tell me what your supply chain focus has been as as as as a result of taking this class.”Question 2 and 3 is mainly just talking about innovation and problem solving mostly but incorporate it with sustainability “We’ve talked about innovative
supply chains. We talked about, you know, sustainable supply chains. We
talked about technology. We talked about network design. How do you want
to make your mark.””Are you going to be a problem
solver, or you’re going to facilitate the different aspects of the
global supply chain from procurement of raw materials, all the way to
delivering in an omni channel.”Question
4 and 5 can really be about anything that has to do with changing the
world but also having to do with supply chain. For example, sweatshops
in the Middle East being shutdown. Must include EPIC.”If you thought about the different
things we’ve worked on all semester what project would you, would you
like to bring to life, thats related supply chain. We talked about
different parts of the world. Tell me what region you like to work on
it, thinking about those epic charts.”Question 6 is going to be discussing omni-channels, technology, and blockchains. “what do you think would would help you on your project or help you in a global supply chain. Internet things, blockchain drones, omni channel network, etc.”There
really isn’t any right or wrong answers. My professor just wants to see
us be able to write out a well written paper with the knowledge we
acquired from this past semester. I will also be providing any power
points, documents, etc. that might be needed to better understand
anything.
epic_powerpoint.pptx

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SCMA 386: Global Supply Chain
Management
Strategic Alliances, Globalization and Risk
March 30, 2020
Our Passion and Manage those Risks
• Global Supply Chains are not linear– they are Integrated and Inclusive
• Must have deep understanding of GLOBAL:
•
•
•
•
Economic System
Geo-Political Stability
Infrastructure
Culture and Competency
• WE MUST REDUCE INVENTORY IN ALL PHASES
• WE ARE RESPONSIBLE FOR ALL ASSETS
• WE WILL VALUE RELATIONSHIPS AND SEEK TO CREATE STRATEGIC
COLLABORATION AND ALLIANCES
2
Remember
• Various types of partnerships can be used to manage the supply chain effectively.
• Framework that can help in selecting the most appropriate way to address a
particular logistics issue.
• 3PLs are becoming more prevalent.
• Both advantages and disadvantages to outsourcing the logistics function
• Many important issues to consider once the decision has been made and a 3PL
agreement is being implemented.
• RSPs are also becoming common.
• Issues and concerns relating to the implementation of RSP types of arrangements
• Distributor Integration (DI)
• Create risk-pooling opportunities across the various distributors
• Enable different distributors to develop different areas of expertise.
Managing Supply Chain Risk
• General risk issues in the supply chain of products and services
• What are common sources of risk?
• How can they be managed effectively?
• Risk must be evaluated relative to cost of exposure vs. probability of occurrence
• Risk and uncertainty are not synonymous
• Proactive strategies for mitigating risk are more effective than reactive
4
Balancing supply chain risk
• The key questions most companies must face is how to balance
supply chain efficiency (cost) with supply chain risk
• There is no right answer but risk must be addressed when making
decisions or you are assuming an effective risk of 0%
Categories of Supply Chain Risk
Disruptions
Delays
Information
Systems
Forecast
Intellectual
Property
Procurement
Receivables
Inventory
Capacity
6
How do company’s deal with risk?
Inventory
Flexibility
Multiple
sourcing
Capacity
Pool or
Aggregate
Demand
Responsiveness
Capability
7
Our Approach
• Focus on a region
•
•
•
•
Sub-Saharan Africa
Middle East and North Africa
Central and Eastern Europe
Southeast Asia
• Know and understand EPIC
• Relate the categories of risk vs. characteristics of EPIC
• Look at various forms of action items (dealing with risk) and provide
recommendations for solution
EPIC Structure
Economy:
• GDP
• Population Size
• Foreign Direct Investment
• Exchange Rate Stability and Consumer Price Index
• Balance of Trade
Politics:
• Ease of Doing Business
• Legal and Regulatory Framework
• Risk of Political Stability
• Intellectual Property Rights
Infrastructure
• Transportation
• Utility
• Telecommunications
Competence:
• Labor Relations
• Educational Level
• Logistics Competence
• Customs and Security
Central and Eastern Europe
Cities
• Communism and economic recovery
• Prague: resilient
• Budapest, Warsaw: still struggling
• Political stability
• Kyiv and Bucharest
• Moscow and Saint Petersburg
• Infrastructure
• Good in the cities
• Linking between
• Poor in the rural areas
• Competency and capability
• Brain drain, exit of creativity
• Investment by companies
• Manufacturing comeback– especially in automotive industry
Stories
•
•
•
•
Alba Plant, Budapest, Hungary
Saint Petersburg
Agriculture in Russia, Romania and the Ukraine
Stakeholder activism
Agriculture
• The Ukraine agricultural sector has been a prime target for foreign private
investment and is logically seen by the IMF and World Bank as a priority sector
for reform.
• The agriculture industry in Romania is under intense scrutiny. After the postcommunist era the free-market approach towards land generated an obvious
change on the farming landscape.
• Based on the HDI and the analysis of ADM’s business presence in regions around
the world (market, employees, partnerships, etc.), the following ADM owned and
operated facilities and partners should be included as “Respect for Human
Rights” priorities:
• The oilseed crushing plant in Illichivsk, Ukraine
• The elevator and port facilities on the Danube and in Bucharest, Romania
Plenty of Risk
• There are approximately 15,000 sex workers either working in Hungary or of
Hungarian origin and based elsewhere.
• On 1/1/17, Ukraine amended the assessment, structure, and application
procedure with regard to the minimum salary:
• Minimum level of payment for a monthly (hourly) worktime standard that is performed by an
employee.
• Premium payments for night work, overtimes, and mobile working conditions, bonuses for
holidays and anniversaries.
• Employers must pay a relevant extra amount to an employee if his/her salary payable for fully
performed worktime standard is below the statutory minimum salary.
• “The workers spend the duration of their time living in a shipping container. The
Russian companies that hire North Korean laborers install the containers right
next to the construction site. The workers eat and sleep in them.”
Russia
• Saint Petersburg
• Agriculture
• Stakeholder activism
Economy
• Strengths
• Stable economies
• Potential for young and growing economies
• Rich in natural resources
• Weaknesses
• Aging population
• Decreasing birth rates
• Unstable exchanges
• Czech Republic and Romania have upside
• Be leery of Russian and Ukraine
Politics
• Strengths
• Low Tariffs
• Good legal frameworks
• Weaknesses
• Corruption
• Not easy to do business
• Conflict
• Relatively stable
• Stay out of Russia and Ukraine
Infrastructure
• Strengths
• Improving internet
• Several airports under construction
• Railroads being built
• Weaknesses
• Road infrastructure poor
• Congestion
• Weak energy
• Czech Republic and Hungary are relatively stable
• Rest of region isn’t
Competency
• Strengths
• Good skills and productivity
• Technical competencies in logistics
• Weaknesses
• Limited and poor availability of managerial talent
• Small pool of all labor
• Czech Republic and Poland
• Rest of region isn’t
Sub-Saharan Africa
?
?
?
?
?
?
?
Angola
DRC
Ethiopia
Kenya
Nigeria
South Africa
Sudan
Economy
• Strengths
• Rich with oil and other natural resources
• Potential for young and growing economies
• Can be a highly diversified economy, ability to leapfrog
• Weaknesses
• Inflation rates too high
• Unemployment of young is severely high
• South African is prepared, and Nigeria looks strong
• Not so much: Sudan
Politics
• Strengths
• Potential
• Welcoming new businesses
• Weaknesses
• Corruption
• Security
• Conflict
• South Africa is relatively stable
• Stay out of Sudan
Infrastructure
• Strengths
• Improving
• Construction of harbors
• Several airports under construction
• Railroads being built
• Weaknesses
• Corruption
• Security
• Conflict
• South Africa is relatively stable
• Rest of continent isn’t
Competency
• Strengths
•
•
•
•
Hard working people
Improving skills and productivity
Technical competencies in mining and agriculture
Kenya and South Africa have high literacy and education rates
• Weaknesses
• Limited access to employment opportunities
• Limited and poor availability
• Low competencies in logistics
• South Africa is improving
• Not so much: Sudan
DRC
Economy: B• GDP: B• Population Size: A
• Foreign Direct Investment: B• Exchange Rate Stability and Consumer Price
Index: F
• Balance of Trade: D
Politics: F
• Ease of Doing Business: F
• Legal and Regulatory Framework: F
• Risk of Political Stability: D• Intellectual Property Rights: F
Infrastructure: D• Transportation: D• Utility: D• Telecommunications: D-
Competence: D• Labor Relations: F
• Educational Level: D
• Logistics Competence: D• Customs and Security: D-
Kenya
Economy: C+
• GDP: B• Population Size: A• Foreign Direct Investment: D+
• Exchange Rate Stability and Consumer Price
Index: D• Balance of Trade: C
Politics: D+
• Ease of Doing Business: D+
• Legal and Regulatory Framework: D+
• Risk of Political Stability: D• Intellectual Property Rights: D+
Infrastructure: C• Transportation: C
• Utility: D+
• Telecommunications: D+
Competence: C• Labor Relations: B• Educational Level: B• Logistics Competence: D
• Customs and Security: D-
Nigeria
Economy: B+
• GDP: A• Population Size: A
• Foreign Direct Investment: B+
• Exchange Rate Stability and Consumer Price
Index: D
• Balance of Trade: B
Politics: D
• Ease of Doing Business: D+
• Legal and Regulatory Framework: D
• Risk of Political Stability: D+
• Intellectual Property Rights: F
Infrastructure: D
• Transportation: D+
• Utility: F
• Telecommunications: C-
Competence: C• Labor Relations: C
• Educational Level: C+
• Logistics Competence: D
• Customs and Security: F
South Africa
Economy: B
• GDP: B
• Population Size: A• Foreign Direct Investment: B• Exchange Rate Stability and Consumer Price
Index: B• Balance of Trade: A
Politics: B• Ease of Doing Business: B+
• Legal and Regulatory Framework: B• Risk of Political Stability: D
• Intellectual Property Rights: B+
Infrastructure: B• Transportation: B+
• Utility: C• Telecommunications: C+
Competence: B• Labor Relations: F
• Educational Level: B
• Logistics Competence: A• Customs and Security: A-
Southeast Asia
?
?
?
?
?
?
?
Indonesia
Malaysia
Myanmar
Philippines
Singapore
Thailand
Vietnam
Malaysia
Malaysia
Vietnam – Before
Vietnam – After
Middle East and North Africa
?
?
?
?
?
?
?
Algeria
Egypt
Ethiopia
Israel
Saudi
Arabia
UAE
Morocco
35
36
Economy
• Strengths
• Young and growing economies
• Israel is highly diversified, and the rest have oil and gas
• Weaknesses
• All dependent on oil and gas
• FDI laws are not improving and could lead to potential divestment
• Maybe? Saudi Arabia and Egypt: B+
• Not so much: Algeria
Politics
• Strengths
• Strong legal system
• Lower corporate tax rates
• Weaknesses
•
•
•
•
•
Corruption
Complex legal system
Some political instability
All dependent on oil and gas
Too much bureaucracy
• Israel and UAE: B+
• Stay out of Algeria
Infrastructure
• Strengths
• Advance and improving comprehensive transportation in Israel,
Saudi
Arabia and UAE
• Weaknesses
• Roads hazardous and aging (especially in Algeria and Egypt)
• Rail is general underdeveloped
• UAE: A
• Stay out of Algeria
Competency
• Strengths
• Flexible workforce
• Diverse, foreign impact, English speaking
• Understand international law and commerce
• Improving skills and productivity (even in Algeria and Egypt)
• Weaknesses
• Limited and poor availability
• Inadequate education for indigenous workforce
• UAE: A
• Stay out of Algeria
Israel
Economy: B
• GDP: B
• Population Size: B• Foreign Direct Investment: B
• Exchange Rate Stability and Consumer Price
Index: A
• Balance of Trade: A
Politics: B+
• Ease of Doing Business: B+
• Legal and Regulatory Framework: B+
• Risk of Political Stability: B• Intellectual Property Rights: B+
Infrastructure: B
• Transportation: B• Utility: B
• Telecommunications: B+
Competence: B+
• Labor Relations: B
• Educational Level: B
• Logistics Competence: B+
• Customs and Security: B+
Saudi Arabia
Economy: B+
• GDP: B
• Population Size: B+
• Foreign Direct Investment: A
• Exchange Rate Stability and Consumer Price
Index: A• Balance of Trade: B
Politics: B• Ease of Doing Business: B+
• Legal and Regulatory Framework: C+
• Risk of Political Stability: C
• Intellectual Property Rights: B+
Infrastructure: B+
• Transportation: B+
• Utility: A• Telecommunications: B+
Competence: B+
• Labor Relations: A• Educational Level: B
• Logistics Competence: B+
• Customs and Security: B
UAE
Economy: B
• GDP: B
• Population Size: C+
• Foreign Direct Investment: B
• Exchange Rate Stability and Consumer Price
Index: A
• Balance of Trade: A
Politics: B+
• Ease of Doing Business: A• Legal and Regulatory Framework: B• Risk of Political Stability: A• Intellectual Property Rights: B+
Infrastructure: A
• Transportation: A
• Utility: A• Telecommunications: A-
Competence: A
• Labor Relations: A
• Educational Level: A• Logistics Competence: A• Customs and Security: A-
Morocco
Economy: B• GDP: B• Population Size: A
• Foreign Direct Investment: B
• Exchange Rate Stability and Consumer Price
Index: B• Balance of Trade: B-
Politics: B
• Ease of Doing Business: B+
• Legal and Regulatory Framework: B• Risk of Political Stability: B+
• Intellectual Property Rights: C
Infrastructure: C+
• Transportation: B
• Utility: C
• Telecommunications: C
Competence: A• Labor Relations: A
• Educational Level: B+
• Logistics Competence: A• Customs and Security: A-
SCMA 386: Global Supply Chain
Management
Connecting to SCMA 420
January 29, 2020
EPIC Structure
Economy:
• GDP
• Population Size
• Foreign Direct Investment
• Exchange Rate Stability and Consumer Price Index
• Balance of Trade
Politics:
• Ease of Doing Business
• Legal and Regulatory Framework
• Risk of Political Stability
• Intellectual Property Rights
Infrastructure
• Transportation
• Utility
• Telecommunications
Competence:
• Labor Relations
• Educational Level
• Logistics Competence
• Customs and Security
Connecting to SCMA 420
?
Process Design
?
Facility Location
?
Resource Planning
?
Inventory
?
Quality/Process Control
•
•
•
•
•
•
•
•
Network Design and Planning
Supply Chain Integration
Procurement and Outsourcing
Supply Contracts
Distribution Strategies
Global Logistics
Strategic Alliances
Coordinated Product and Supply
Chain Design (Omni-Channel)
• Quality
• Relationships (Globalization)
• Life (Sustainability)
• Futuring
?
Forecasting
• Globalization
• Blockchain
Raw Materials
OILS AND LOTIONS
BATTERIES
FABRICS
STEEL
Pig Iron
Cobalt
Cocoa
Corn
Soybean
Palm
Cotton
6
Stuff in the Ground
Vietnam – Before
Vietnam – After
Categories of Supply Chain Risk
Disruptions
Delays
Information
Systems
Forecast
Intellectual
Property
Procurement
Receivables
Inventory
Capacity
9
How do companies deal with risk?

Inventory
Flexibility
Multiple
sourcing
Capacity
Pool or
Aggregate
Demand
Responsiveness
Capability
10
Career Overview
• No longer a back-office function for transactional procurement, this
field – once only rarely sought as a career choice – is now a highly
coveted area. People in sourcing now hold strategic roles with insight
at all levels of the company – the “strategic” is finally a valued part of
“strategic sourcing.”
• Though it’s still new to many companies – and in fact some entire
industries, strategic sourcing as a methodology has been around for
decades.
11
Career Overview
• Understanding by category what a company spends with external
suppliers;
• Understanding the marketplace of available resources;
• Developing a sourcing strategy for key categories and a Total Cost of
Ownership (TCO) approach;
• Rationalizing the spend by negotiating with a small group of suppliers
on price, service levels and other quantifiable items; and
• Implementing a contract and relationship from which the
organization can measure its results.
12
Job Description
•
•
•
•
Develop profitable purchasing strategies
Assess supplier profiles and analyze offers
Prepare and implement effective negotiation tactics
Manage relationships with key suppliers to maintain quality of goods, timely
delivery and compliance to terms of contracts
• Review supplies to ensure quality
• Discover profitable suppliers and initiate business and organization partnerships
• Negotiate with external vendors to secure advantageous terms
• Approve the ordering of necessary goods and services
13
Job Description
• Finalize purchase details of orders and deliveries
• Examine and test existing contracts
• Track and report key functional metrics to reduce expenses and improve
effectiveness
• Collaborate with key persons to ensure clarity of the specifications and
expectations of the company
• Foresee alterations in the comparative negotiating ability of suppliers and clients
• Perform risk management for supply contracts and agreements
• Control spend and build a culture of long-term saving on procurement costs
14
CEOs That Started in Sourcing, Purchasing
• Tim Cook, Apple: Prior to joining Apple, he worked at Compaq and
was responsible for procuring and managing all of Compaq’s product
inventory
• Mary Barra, GM: Co-op student at the Pontiac Motor Division in
purchasing and the Executive Vice President of Supply Chain
• Alan George Lafley, P&G: Started at the bottom, taking a junior buying
role after his discharge from the Navy during the Vietnam War in
1977,as a supply officer
• Fabian Garcia, Revlon: Served for almost seven years as Colgate
Palmolive’s Purchasing Director
Total Cost Management
• First assignment: 1997
• Workshops, organizational learning, site visits to analyze:
•
•
•
•
•
•
•
•
Transportation costs
Additional inventory
Quality and obsolescence
Schedule non-compliance
Risk
Payment terms
Administrative
Responsiveness
Aligned Business Framework
•
•
•
•
•
•
•
•
•
First assignment: 2002
SQA visits required
TCM workshops required
Minority suppliers required
Code of Working Conditions required
Participation in Automotive Industry Alliance Group (AIAG) recommended
GHG and water management encouraged
Self-selection and “downsizing” supplier base
ABS enabled supplier partnership, including insight into product development,
manufacturing technologies, and more business
17
Co-Location
• The Rouge
• Chennai, India
• Camacari, Brazil
• Chongqing, China
18
What Should Be Covered in Purchasing Policy
• The objective of the purchasing policy
• Role of purchasing
• Vendor setup and onboarding process
• Contract signing authority
• Purchasing authority levels
• The delegation of authority
What Should Be Covered in Purchasing Policy
• Purchasing process and accepted norms
• Invoices and accepted norms
• Competitive Bidding
• Ethical purchasing and conflict of Interest
• Supplier diversity
• Record retention
Ford
• Ford signs comparatively long-term agreements with strategic suppliers, which
lends to increased openness, dialogue and a partnership attitude
• Without the fear that non-compliance could mean the end of Ford’s orders,
suppliers are more open to discussing challenges and working together toward
solutions
• Assessments are used by Ford on a sampling basis only to better understand
conditions on the ground and, although used to ensure compliance on a site
basis, are considered to be a part of supplier development
• This approach is further enabled by current business efforts to reduce the supply
base and develop deep and transparent relationships with a fewer number of
suppliers for the long term.
• https://fsp.portal.covisint.com/web/portal/psform
• https://www.fordsdd.com/
Disney
• The Walt Disney Company is a diversified worldwide entertainment
company with operations in four major business segments: Studio
Entertainment, Parks and Resorts, Media Networks and Consumer
Products
• The Company’s Strategic Sourcing and Procurement organization works
with …
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