Supply Chain Globalization


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The origins of supply chain globalization and its effect.

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  • Good Morning, I am Pushkar Bajpai. And my topic for presentation deals with Effects of Globalization and Interrelated risks on the Supply Chain.
  • I like this definition because as an industrial engineer I am used to think in terms of an objective function and the constraints associated with it. This definition compels me to apply tools of operations research and other related techniques to the “supply chain” to improve its effectiveness. Above all it provides me with an objective that has to be optimized and that objective is the “cost”.
  • Supply Chain Globalization

    1. 1. Effects of Globalization & Risk Management Pushkar Bajpai Master of Science in Industrial Engineering State University of New York at Buffalo
    2. 2. <ul><li>INTRODUCTION </li></ul><ul><li>BEFORE GLOBALIZATION </li></ul><ul><li>AFTER GLOBALIZATION </li></ul><ul><li>RISKS IN A GLOBAL SUPPLY CHAIN </li></ul><ul><li>IMPROVEMENTS </li></ul><ul><li>ACTION STEPS </li></ul>
    3. 3. <ul><li>Alignment of firms that brings product or services to the market . (Lambert, Douglas M., James R. Stock, and Lisa M. Ellram, 1998, Fundamentals of Logistics Management, Boston, MA: Irwin/McGraw-Hill, Chapter 14) </li></ul><ul><li>Entire network related to the activities of a firm that links suppliers, factories, warehouses, stores and customers. (Steven Nahmias, 2005, Production & Operations Analysis, Boston, MA: Irwin/McGraw-Hill, Chapter 6) </li></ul>
    4. 4. Source:
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    6. 6. <ul><li>The process of planning, implementing, and controlling the operations of the supply chain as efficiently as possible. </li></ul><ul><li>Spans all movement and storage of raw materials, work-in-process inventory, and finished goods from point-of-origin to point-of-consumption. </li></ul><ul><li>(Source: </li></ul><ul><li>accessed on 11/21/2007) </li></ul>
    7. 7. <ul><li>SCM is a set of approaches utilized to efficiently integrate suppliers, manufacturers, warehouses and stores, so that the merchandise is produced & distributed at the right quantities, to the right location and at the right time, in order to minimize system wide costs while satisfying the service level requirements. (Simchi-Levi et al., 1999, Page 1* ) </li></ul>
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    10. 10. <ul><li>Just-in-Time </li></ul><ul><li>“ dock to factory floor” </li></ul><ul><li>Lean Manufacturing </li></ul><ul><li>“ waste reduction” </li></ul>
    11. 11. <ul><li>Because they eliminates the redundancies from the business process by: </li></ul><ul><li>Single source supplier…. </li></ul><ul><li>Locating sales and distribution facilities…. </li></ul><ul><li>Outsourcing non core-activities…. </li></ul><ul><li>Sharing of information electronically…. </li></ul>
    12. 12.
    13. 13. <ul><li>About 1/5 th output of U.S. firms is produced abroad </li></ul><ul><li>$500 billion in assets of foreign firms are held by U.S. firms </li></ul><ul><li>25% of U.S. imports and exports are between foreign affiliates and parent U.S.-based firms </li></ul><ul><li>(Source: Steven Nahmias, 2005, Production & Operations Analysis, Boston, MA: Irwin/McGraw-Hill, Chapter 6 ) </li></ul>
    14. 14. <ul><li>Most of our products are sent on ships to distribution centers, we need to shorten our supply chain from order to ship and increase the accuracy of our forecasting and planning . (Ralph Johnson, VP of IT Ansell Ltd., Red Bank) </li></ul>
    15. 15. <ul><li>When production and distribution operations are located around the world, the supply chain never rests. (The Business Week, 2005, The Global Supply Chain: Discovering the new opportunities across the “Flat World”, The McGraw Hill Company, Inc., Page 1 ) </li></ul><ul><li>Globalization is increasing the need for planning and supply-chain visibility. (Lora Cecere, Director at AMR Research Inc., Boston) </li></ul>
    16. 16. <ul><li>Geographic distances </li></ul><ul><li>Currency risks </li></ul><ul><li>Just-in-time </li></ul><ul><li>Infrastructure inadequacies </li></ul><ul><li>Inadequate communication systems </li></ul><ul><li>Weather disruptions & natural disasters (Hurricane Katrina in 2005) </li></ul>
    17. 17. Source: Aberdeen Group, 2006
    18. 18. <ul><li>Globalization is increasing the need for planning and supply-chain visibility , Companies want to plan corporately for global coordination, then execute locally. To do this, they require richer functionality for sales and operations planning as well as improved supply-chain visibility. (Lora Cecere, research director at AMR Research Inc., in Boston) </li></ul>
    19. 19. <ul><li>Supply chain visibility </li></ul><ul><li>Business-to-business collaboration </li></ul><ul><li>Trade compliance </li></ul><ul><li>Risk management </li></ul><ul><li>(Aberdeen Group, Global Supply Chain Benchmark Report, 2006) </li></ul>
    20. 20. <ul><li>Supply chain visibility is a firm's ability to collect and analyze distributed data, generate specific recommendations, and match insights to strategy (Noha Tohamy, Principal Analyst, Forrester Research) </li></ul><ul><li>Loss engineering </li></ul><ul><li>Simulation </li></ul><ul><li>RFIDs’ </li></ul><ul><li>Status information </li></ul>
    21. 21. <ul><li>Collaborate with partners, to improve global supply chain process, on areas such as: </li></ul><ul><li>Management </li></ul><ul><li>Sales and operations planning </li></ul><ul><li>Transportation </li></ul><ul><li>Forecasting </li></ul><ul><li>Replenishment planning </li></ul>
    22. 22. <ul><li>Compliance with local government rules & regulations </li></ul><ul><li>Centralized trade management information system </li></ul><ul><li>Flexible logistics network </li></ul><ul><li>Increasing global supply chain human resource </li></ul><ul><li>Business process outsourcing </li></ul>
    23. 23. <ul><li>Ability to keep the supply chain moving when faced with loss of supplier or logistics network </li></ul><ul><li>Managing exports </li></ul><ul><li>Managing imports </li></ul><ul><li>Currency volatility </li></ul><ul><li>Supply chain security </li></ul><ul><li>Logistics capacity </li></ul>
    24. 24. <ul><li>Supply the Moon and the Mars </li></ul><ul><li>“ Future space exploration, as envisioned by NASA's new Vision for Space Exploration, will use more complex supply networks, on the ground and in space.” </li></ul><ul><li> (David Simchi-Levi, 2006 , in </li></ul>
    25. 25. <ul><li>The New Supply Chain Challenge: Risk Management in Global Economy, FM Global, 2006 </li></ul><ul><li>The Global Supply Chain: Discovering New Opportunities Across the “Flat World”, Business Week, 2005 </li></ul><ul><li>Global Supply Chain Benchmark Report, Aberdeen Group, 2006 </li></ul><ul><li>Supply Chain Modeling Using Simulation, Chang, Yoon & Makatsoris, Harris </li></ul><ul><li>Production & Operations Analysis, Nahmias, Steven, McGraw Hill, 2006 </li></ul><ul><li> </li></ul><ul><li>And of course </li></ul>
    26. 26. <ul><li>To God </li></ul><ul><li>and to my parents </li></ul><ul><li>and of course to my friends </li></ul>