1) Global supply chain management involves coordinating activities across international borders to bring products from conception to end use. It requires integrating supply chain functions like purchasing, logistics, operations, and marketing globally. 2) Developing an effective supply chain strategy is important for supporting a company's overall business strategy. The strategy must consider the company's operations, distribution channels, sourcing needs, and customer service approach on a global scale. 3) Managing supply chains globally allows companies to evaluate opportunities worldwide and strategically leverage activities in emerging markets that can help reduce costs and add value across international supply networks.

1. CHAPTER 1
GLOBAL STRATEGY
AND
GLOBAL SUPPLY CHAIN MANAGEMENT
Value chain and global value chain
Supply chain and global supply chain
Supply chain management and global supply chain management
Global supply chain management activities
What is global supply chain management?
2
What is value chain?
3
What is value chain?
4
Production
Assembly
Testing
Order
processing
Distribution
Advertising
Branding
Sales
R&D
Designing
After sale
services

2. The smiling curve
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Global value chain
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Global value chain
7
Toyota Global value chain
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3. 9 10
Value chain and Global value chain
¨ The value chain describes the full range of activities that firms and
workers do to bring a product from its conception to its end use and
beyond.
¤ This includes activities such as design, production, marketing, distribution and support
to the final consumer.
¤ The activities that comprise a value chain can be contained within a single firm or
divided among different firms (globalvaluechains.org, 2011).
¤ Value chain activities can produce goods or services, and can be contained within a
single geographical location or spread over wider areas.
¨ The value chain that is divided among multiple firms and spread across
wide swaths of geographic space is global value chain.
¤ In the context of globalization, the activities that constitute a value chain have generally
been carried out in inter-firm networks on a global scale.
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What is supply chain?
12

4. What is supply chain?
13
What is supply chain?
14
Source: Nada R. Sanders (2012), Supply chain management – a global perspective,
John Wiley & Sons Publisher, printed in USA.
What is supply chain?
15
Source: Nada R. Sanders (2012), Supply chain management – a global perspective, John Wiley
& Sons Publisher, printed in USA.
What is supply chain?
16
Source: Nada R. Sanders (2012), Supply chain management – a global perspective,
John Wiley & Sons Publisher, printed in USA.

5. Integrated Supply Chain
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What is supply chain?
18
¨ Supply chains include all of the companies that
participate in the design, assembly, and delivery of
products for buyers like you.
¨ Suppliers, Retailers, manufacturers, transportation
companies, and distributors are some of the key
players.
What is global supply chain?
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6. THE BOUNDARY-SPANNING NATURE OF SCM
¨ Intra-organizational
integration
¨ Cross-enterprise
integration
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SCM ACTIVITIES
Collaboration
Information
Sharing
Coordination
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The Bullwhip effect
¨ Fluctuation and distortion of information increases
as it moves up the supply chain, from retailers,
manufacturers, to suppliers.
¨ This is called the bullwhip effect as inaccurate and
distorted information travels up the chain like a
bullwhip uncoiling.
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Case - Boeing 787 delays
1. Boeing 787
Dreamliner: a
timeline of problems
2. Building Boeing's
Dreamliner: Why All
the Delays?
24

7. Trends in supply chain management
1. Globalization
2. Outsourcing
3. Technology
4. Postponement
5. The lean supply chain
6. Managing supply chain
disruptions
7. Supply chain security
8. Sustainability and the
“green” supply chain
9. Innovation
¨ Wal-Mart, the world’s largest
retailer, operates 8,500 stores in
15 countries, under 55 different
names.
¨ Other multinational companies
such as IBM, General Electric,
Siemens, and McDonald’s have
a similar global reach.
¨ It is not uncommon for a
company to:
¤ develop a product in the United
States,
¤ manufacture it in Asia,
¤ and sell it in Europe.
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What is Global supply chain management?
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The integration and coordination of the
strategic leverage points embedded in the supply
chain functions – logistics, purchasing/sourcing,
operations and marketing globally
What is Global supply chain
management?
27
¨ In global supply chains, the starting point for
determining global leverage and achieving
maximum total value is to ask and answer 3 basic
questions:
1. How global is our industry?
2. How global should our strategy be?
3. How global should our supply chains be?
What is supply chain strategy?
Characteristics of a global competitive supply chain
Achieving a competitive advantage across the global supply chain
Building blocks of supply chain strategy
Global strategic supply chain management
Emerging markets and global strategic supply chain management
Global supply chain strategy
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8. What is supply chain strategy?
29
A business strategy is a plan for the company that clearly defines the company’s long-term
goals, how it plans to achieve these goals, and the way the company plans to differentiate itself
from its competitors. A business strategy should leverage the company’s core competencies,
or strengths, and carefully consider the characteristics of the marketplace.
A supply chain strategy is a long-range plan for the
design and ongoing management of all supply chain
decisions that support the business strategy.
Source: Nada R. Sanders (2012), Supply chain management – a global
perspective, John Wiley & Sons Publisher, printed in USA.
Characteristics of a competitive supply chain
30
Responsiveness
• The ability to respond to
customers’ requirements in ever-
shorter time frames has become
critical
Reliability
• The best way to reduce uncertainty is by
increasing reliability through the redesign of
processes that impact performance
Relationship
management
• Successful supply chains will be those
that are governed by a constant
search for win-win relationships
based upon reciprocity of trust
Achieving a competitive advantage across the
global supply chain
31
Source: Nada R. Sanders (2012), Supply chain management – a global perspective, John Wiley & Sons Publisher, printed in USA.
Achieving a competitive advantage across the
global supply chain
32

9. Building blocks of supply chain strategy
¨ Strategic SCM involves designing a supply chain that
is uniquely configured to meet the company’s overall
business strategy.
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Supply chain strategy is
directly impacted by the
decisions of the four
building blocks and how
they are used to support
the business.
Source: Nada R. Sanders (2012), Supply chain management – a global perspective, John Wiley & Sons Publisher, printed in USA.
Operations strategy
¨ The operations strategy determines the design and
management of a company’s manufacturing process, the
design of internal processes, use of equipment and
information technology, as well as the types of employee
skills needed.
¨ There are four options in this area:
1. Make-to-stock
2. Assemble-to-order
3. Make-to-order
4. Engineer –to-order
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Operations strategy
35
Operations strategy
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10. Distribution strategy
¨ A company’s distribution strategy is about how it plans
to get its products and services to customers.
¨ Dell
37
Direct-customer-
strategy
Sell through
retailers
Sourcing strategy
¨ Sourcing strategy relates to which of a company’s business it
is going to outsource versus the ones it will retain
internally.
¨ This includes decisions regarding supplies and component
parts, as some companies choose to make these themselves.
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Customer service strategy
39
Customer service is extremely important as it is about bringing value to the
customer.
The customer service strategy of a company should be based first on the overall
volume and profitability of market segments.
Source: Nada R. Sanders (2012), Supply chain
management – a global perspective, John Wiley &
Sons Publisher, printed in USA.
Supply chain strategic design
Competing
on cost
Competing
on time
Competing
on
innovation
Competing
on quality
Competing
on service
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11. Global strategic supply chain
management
Optimizing global strategy
entails evaluating for potential
inclusion all plausible leverage
points worldwide across the
inbound and outbound parts of
the chain.
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Global strategic supply chain
management
¨ Leverage becomes strategic only when the quality
received outweighs the cost endured.
¨ Coordination and integration if the internal
(purchasing, logistics, operations and market
channel functions) and external (supply chain
partners, activities, and resources) portions of the
supply chain relative to the costs and benefits
guide the strategic decision making in where to
add value
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Global supply chain management
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Global
Suppliers
LOGISTICS
Global logistics is responsible for transportation, inventory
management, packaging, and materials handling
Global
Customers
PURCHASING
Global purchasing is
responsible for the boundary
spanning role with suppliers
MARKET
CHANNELS
Global market channels is
responsible for the boundary
spanning role with customers
OPERATIONS
Global operations is responsible for the managing of production,
competitive priorities, vertical integration, and quality
Strategic considerations
1. Small vs. Large firms
2. Supply chain adaptability
3. Measuring productivity
4. Interpreting productivity
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12. Emerging markets and global strategic
supply chain management
¨ Countries: Brazil, India, Mexico, Russia, South
Africa, Turkey, Indonesia, China and Vietnam
¤ Moving to mixed or capitalist economies
¤ Increasing privatization
¤ Changing infrastructure
¤ Increasing economic growth
¤ Increasing population and business activities
¨ These countries represent nodes in global supply
chains that should be evaluated and leveraged to add
value across global supply chains
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