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LOGISTICS IRELAND 2006 KEYNOTE PRESENTATION SUPPLY CHAIN GLOBALISATION: THREAT OR OPPORTUNITY? Dr Daniel Park MASS Consulting Group Manchester, UK 5 October 2006
STRUCTURE OF THE PRESENTATION ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
THREAT  AND  OPPORTUNITY ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
GLOBALISATION RECONSIDERED (1) First Thoughts “ By almost any economically relevant metric, distances have shrunk considerably in recent decades.” Dr Ben Bernanke, Chairman, US Federal Reserve, 2006 “ It’s no longer a competition between products or services, it’s a competition between business models.” Professor Gary Hamel. London Business School
GLOBALISATION RECONSIDERED (2) ,[object Object],[object Object],[object Object],[object Object],[object Object]
GLOBALISATION DRIVERS Policy Drivers Competitive Drivers Cost Drivers Market Drivers GLOBAL INDUSTRY POTENTIAL *  Integrative trade policies *  Compatible technical standards *  Common marketing regulations *  Simultaneous collaboration and rivalry *  Cross-border M&A *  Flexible (incl. time-based) structures *  Scale economics *  Low transportation costs *  High product development costs *  Jointly managed facilities *  Converging customer need *  Increasing search for variety *  High imports and exports *  Transferable marketing
IMPACT ON PRODUCT LIFE-CYCLE Yesterday’s profit-makers Today’s profit-makers Tomorrow’s profit-makers Critical Phasing Critical Phasing Time Compression TIME REVENUE - PROFIT
IMPACT ON ORGANISATIONAL DESIGN ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
HOW DID GLOBALISATION EVOLVE? Core - periphery Comparative advantage Intra-industry trade Networked supply chains Resource endowment Value creation Economies of scale/scope Reduced logistic costs
THE CURRENT PHASE ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
CORE AND PERIPHERY (Comparative Advantage) Natural Resources Agricultural Products Goods Capital Labour
MARKET FLUIDITY (1) ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
MARKET FLUIDITY (2) % domestic % foreign ownership ownership Stock market - Ireland 1995   58   42 2005   40   60 Stock market – UK/LSE  1995   70   30 2005   45   55 Stock market – USA/NYSE   1995   75   25 2005   70   30 Sources: AIB, Davy, LSE, NYSE
FRAGMENTATION OF ACTIVITY (Intra-industry trade) Product Package Tiered Supply Simplified Distribution incl. 3PL and 4PL Final Demand
INTEGRATION OF PROCESSES Source: Edward Sweeney “Managing Information Flows”  Logistics Solutions, Autumn 2006, page 19. Source Processors Retailers Suppliers Distributors Consumers PRODUCTS/SERVICES INFORMATION FUNDS
FORCES FOR CHANGE Asian Operations Multi-Process Alignment Value Migration
TRADE VERSUS INVESTMENT ,[object Object],[object Object],[object Object],[object Object]
TOWARDS A NEW VIEW OF GLOBALISATION A market is not so much about geographical demand as about the  value  of the decision-making authority located there. Central objective is to identify where value is created and to align resources and supply chain structures to gain share of this value. Globalisation is about the  capability  of contesting any market irrespective of geography.
WHERE ARE WE NOW ? ,[object Object],[object Object],[object Object],[object Object]
WHERE NEXT ? ,[object Object],[object Object],[object Object],[object Object]
WHERE NEXT FOR IRELAND INC ? (1) ,[object Object],[object Object],[object Object],[object Object]
SINGAPORE INC Singapore Economic Development Board International financial institutions Investment in education Singapore as R&D centre Creation of globally-minded indigenous enterprise Attraction of internationally mobile operations.
WHERE NEXT FOR IRISH COMPANIES ? ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
WHERE NEXT FOR IRISH COMPANIES ? (2) From “Gattorna-type” alignment of physical supply chains (service companies, 4 th -party logistics, etc) to alignment of multiple supply chains - physical, information, financial necessitating alliances, JVs, shared assets, time-based structures.
WHERE NEXT FOR IRISH COMPANIES ? (3) ,[object Object],[object Object],[object Object]
CLOSING THOUGHTS ,[object Object],[object Object],[object Object],[object Object]

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Logistics ireland dp presentation 2006

  • 1. LOGISTICS IRELAND 2006 KEYNOTE PRESENTATION SUPPLY CHAIN GLOBALISATION: THREAT OR OPPORTUNITY? Dr Daniel Park MASS Consulting Group Manchester, UK 5 October 2006
  • 2.
  • 3.
  • 4. GLOBALISATION RECONSIDERED (1) First Thoughts “ By almost any economically relevant metric, distances have shrunk considerably in recent decades.” Dr Ben Bernanke, Chairman, US Federal Reserve, 2006 “ It’s no longer a competition between products or services, it’s a competition between business models.” Professor Gary Hamel. London Business School
  • 5.
  • 6. GLOBALISATION DRIVERS Policy Drivers Competitive Drivers Cost Drivers Market Drivers GLOBAL INDUSTRY POTENTIAL * Integrative trade policies * Compatible technical standards * Common marketing regulations * Simultaneous collaboration and rivalry * Cross-border M&A * Flexible (incl. time-based) structures * Scale economics * Low transportation costs * High product development costs * Jointly managed facilities * Converging customer need * Increasing search for variety * High imports and exports * Transferable marketing
  • 7. IMPACT ON PRODUCT LIFE-CYCLE Yesterday’s profit-makers Today’s profit-makers Tomorrow’s profit-makers Critical Phasing Critical Phasing Time Compression TIME REVENUE - PROFIT
  • 8.
  • 9. HOW DID GLOBALISATION EVOLVE? Core - periphery Comparative advantage Intra-industry trade Networked supply chains Resource endowment Value creation Economies of scale/scope Reduced logistic costs
  • 10.
  • 11. CORE AND PERIPHERY (Comparative Advantage) Natural Resources Agricultural Products Goods Capital Labour
  • 12.
  • 13. MARKET FLUIDITY (2) % domestic % foreign ownership ownership Stock market - Ireland 1995 58 42 2005 40 60 Stock market – UK/LSE 1995 70 30 2005 45 55 Stock market – USA/NYSE 1995 75 25 2005 70 30 Sources: AIB, Davy, LSE, NYSE
  • 14. FRAGMENTATION OF ACTIVITY (Intra-industry trade) Product Package Tiered Supply Simplified Distribution incl. 3PL and 4PL Final Demand
  • 15. INTEGRATION OF PROCESSES Source: Edward Sweeney “Managing Information Flows” Logistics Solutions, Autumn 2006, page 19. Source Processors Retailers Suppliers Distributors Consumers PRODUCTS/SERVICES INFORMATION FUNDS
  • 16. FORCES FOR CHANGE Asian Operations Multi-Process Alignment Value Migration
  • 17.
  • 18. TOWARDS A NEW VIEW OF GLOBALISATION A market is not so much about geographical demand as about the value of the decision-making authority located there. Central objective is to identify where value is created and to align resources and supply chain structures to gain share of this value. Globalisation is about the capability of contesting any market irrespective of geography.
  • 19.
  • 20.
  • 21.
  • 22. SINGAPORE INC Singapore Economic Development Board International financial institutions Investment in education Singapore as R&D centre Creation of globally-minded indigenous enterprise Attraction of internationally mobile operations.
  • 23.
  • 24. WHERE NEXT FOR IRISH COMPANIES ? (2) From “Gattorna-type” alignment of physical supply chains (service companies, 4 th -party logistics, etc) to alignment of multiple supply chains - physical, information, financial necessitating alliances, JVs, shared assets, time-based structures.
  • 25.
  • 26.