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    Group 5: Arroyo, Aileen Jane Hernandez, Jaya Ley Tumambing, John Dave

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    rl magsino
    The document discusses various topics related to global logistics and procurement. It provides definitions and explanations of inbound logistics, outbound logistics, international procurement strategy, supply strategies, and strategic components of logistics. It also discusses global outsourcing, including reasons for outsourcing, pros and cons, and how to implement an outsourcing strategy. Finally, it covers documentary credits and letters of credit, including roles, examples, and things to know about letters of credit.

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    Group 5: Arroyo, Aileen Jane Hernandez, Jaya Ley Tumambing, John Dave

    Uploaded by

    rl magsino
    111 views59 pages
    The document discusses various topics related to global logistics and procurement. It provides definitions and explanations of inbound logistics, outbound logistics, international procurement strategy, supply strategies, and strategic components of logistics. It also discusses global outsourcing, including reasons for outsourcing, pros and cons, and how to implement an outsourcing strategy. Finally, it covers documentary credits and letters of credit, including roles, examples, and things to know about letters of credit.

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    Powerpoint on Logistics

    Original Title

    Logistics

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    The document discusses various topics related to global logistics and procurement. It provides definitions and explanations of inbound logistics, outbound logistics, international procurement strategy, supply strategies, and strategic components of logistics. It also discusses global outsourcing, including reasons for outsourcing, pros and cons, and how to implement an outsourcing strategy. Finally, it covers documentary credits and letters of credit, including roles, examples, and things to know about letters of credit.

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    111 views59 pages

    Group 5: Arroyo, Aileen Jane Hernandez, Jaya Ley Tumambing, John Dave

    Uploaded by

    rl magsino
    The document discusses various topics related to global logistics and procurement. It provides definitions and explanations of inbound logistics, outbound logistics, international procurement strategy, supply strategies, and strategic components of logistics. It also discusses global outsourcing, including reasons for outsourcing, pros and cons, and how to implement an outsourcing strategy. Finally, it covers documentary credits and letters of credit, including roles, examples, and things to know about letters of credit.

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    © All Rights Reserved
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    Download as pptx, pdf, or txt
    of 59

    Group 5

    Arroyo, Aileen Jane


    Hernandez, Jaya Ley
    Tumambing, John Dave
    LOGISTICS
    IS THE MANAGEMENT FLOW OF GOODS,
    INFORMATION AND OTHER RESOURCES.

    IT INVOLVES THE INTEGRATION OF INFORMATION, TRANSPORTATION,


    INVENTORY, WAREHOUSING, MATERIAL – HANDLING, AND
    PACKAGING AND OCCASIONALLY SECURITY
    INBOUND LOGISTICS

    Activities associated with


    receiving, storing and
    disseminating inputs products
    HOW CAN INBOUND LOGISTICS CAN BE IMPROVED?

    1. LOCAL ECONOMICS
    2.PLANNING OF INBOUND LOGISTICS
    3.FORECASTING
    OUTBOUND LOGISTICS

    ACTIVITIS ASSOCIATED WITH


    COLLECTING, STORING AND
    PHYSICALLY DISTRIBUTING
    THE PRODUCT TO THE
    BUYERS
    INTERNATIONAL
    PROCUREMENT
    STRATEGY
    What is a Strategy?

    A strategy is an action plan


    designed to achieve specific
    long term goals and
    objectives.
    Strategic purchasing
    is the process of "planning,
    implementing, evaluating, and controlling
    strategic and operating purchasing
    decisions for directing all activities of the
    purchasing function toward opportunities
    consistent with the firm's capabilities to
    achieve its long-term goals
    The Strategic Role of Purchasing

    Perform sourcing related activities in a way that


    support the overall objectives of the organization

    by establishing external contacts with the supply


    market
    COMMON REASONS FOR A GLOBAL
    PURCHASING STRATEGY
    • REDUCING OVERALL COST STRUCTURE
    • AVAILABILITY OF NEW TECHNOLOGY AND CAPACITY
    • ESTABLISHING ALTERNATIVE SOURCES OF SUPPLY-
    REDUCED RISK
    • ACCESS TO NEW DESIGNS

    DOWNSIDE
    • INVENTORY MANAGEMENT INCREASE
    • INCREASED TRANSPORTATIOIN/LOGISTICS
    SUPPLY STRATEGIES
    • TRANSLATING ORGANIZATIONAL OBJECTIVES INTO SUPPLY
    OBJECTIVES

    • GLOBAL SOURCING BRINGS MORE PROFIT IN THE BUSINESS

    • THE SOURCING AGENT OF THE GLOBAL SOURCING COUNTRIES HELPS


    YOU TO IDENTIFY THE PROPER COUNTRIES.
    STRATEGIC COMPONENTS

    ANY STRATEGY CHOSEN SHOULD INCLUDE


    DETERMINATION OF WHAT,QUALITY, HOE MUCH, WHEN,
    WHAT PRICE, WHERE, HOW AND WHY
    Global
    outsourcing
    Definition
    ● Outsourcing can be defined as the strategic use of outside
    resources to perform activities traditionally handled by
    internal staff and resources.

    ● It is where an organization contracts out major functions


    to specialized and efficient service providers, who then
    become valued business partners.
    Why do companies
    outsource?
    Why do companies outsource?
    ● External supplier has better capability
    ● Freeing resources for other purposes
    ● Reduction and control operating costs
    ● Sharing risks with a partner company
    ● Lack of internal resources
    ● Streamlining or increasing efficiency for time-consuming
    functions
    ● Desire to focus more tightly on core business
    ● Benchmark
    Pros & cons
    of global
    outsourcing
    pros cons
    • Greater flexibility • Long lead times/capacity
    • Lower investment risk shortages
    • Existing staff may feel
    • Improved cash flow
    disposable or threatened
    • Lower potential labor • Issues with product/service
    costs quality
    • Problems with communication
    • Loss of control over policies
    and procedures
    • Threats to data security
    How to implement
    outsourcing?
    The outsourcing life cycle
    Most important factors
    influencing success in
    outsourcing
    Most important factors influencing success in outsourcing
    ● Understanding company goals and objectives
    ● A strategic vision and plan
    ● Selecting the right, high quality supplier
    ● A properly structured, effective contract and contract
    monitoring
    ● Good relationship with the supplier
    Documentary
    credit
    Definition
    A Documentary Credit as an instrument of settlement of
    payment obligation between buyer and seller.

    ● Letter of Credit : A credit issued by the issuing bank and


    addressed to the Beneficiary in the form of a ‘Letter’
    ● Commercial Credit : A credit issued by the issuing bank in
    settlement of a commercial transaction
    Definition
    ● Documentary Credit : A credit issued by the issuing bank
    and requires the presentation of stipulated documents for
    compliance
    ● Standby Letter of Credit : A credit issued by the issuing
    bank to be used for settlement only where there has been
    some form of default or financial guarantee
    Sellers (exporters) and buyers

    Roles of letter (importers) have the following


    concerns when signing the

    of credit (LC)
    contract:
    ● Exporter/Seller : What if we ship
    the goods but they don’t pay us the
    Counterparts of a trade are usually located
    overseas. proceeds?
    ● Importer/Buyer : What if we are
    forced to pay the proceeds but the
    goods do not arrive?
    Role of LC
    An Letter of Credit is a letter issued by a bank to guarantee
    the payment of proceeds. The bank, which issued an L/C,
    guarantees that the proceeds will be paid even if the
    importer goes bankrupt or is unable to pay for any other
    reason, on the condition that the documents satisfying
    certain conditions (terms of L/C) are presented.
    Other Roles of LC
    1. Supplementation of credit of the buyer (importer). L/Cs
    make it easier for buyers to gain trust from sellers in
    selling their product.
    2. Convenient tool for the seller (exporter). Sellers will
    have the opportunities to receive finance for the
    proceeds from the bank easily, in the form of negotiation
    of export bills.
    What should we
    know about lc
    What should we know about lc
    ● U.C.P.600, Uniform Customs and Practice for Documentary Credits
    2007 Revision (UCP600) has been established by the International
    Chamber of Commerce (ICC), to standardized interpretations and
    procedures of L/Cs. Majority of L/Cs are subjected to the rules of UCP.
    ● L/C transactions are entirely based on the presentation of documents
    What should we know about LC
    ● Transactions with L/Cs are separate and independent from export contracts
    that are the background of the L/Cs. They are entirely based on the
    presentation of documents.
    ● Therefore, banks issuing L/Cs must pay the proceeds as written in the L/C so
    long as the documents fulfilling the terms and conditions of the L/C are
    presented, even if the goods or their shipment violate the export contract
    Example
    Flow of Documentary Credit
    INCOTERMS 2010
    Incoterms
    Abbreviation for INTERNATIONAL COMMERCIAL
    TERMS

    They are set of rules which define the responsibilities of


    sellers and buyers for the delivery of goods under sales
    contract for domestic and international trade

    1936 – First issued INCO terms


    Sept. 2010-January 2011 INCOterms 2010 launched
    INCO TERMS - is a registered trademark of the ICC

    This provide a common set of rules to clarify


    responsibilities of sellers and buyers for the delivery of
    goods under sales contract.

    Reduce misunderstanding among traders and thereby


    minimize trade disputes and litigation
    BENEFIT OF INCO TERMS

     The main benefit of incoterms is to reduce risk.

     Incoterms do not cover, however, ownership or title


    transfer of the goods. These terms are agreed upon
    separately between two transacting parties.
    The Categories
    The Steps of Global Logistics

    Customs Clearance
    for Export
    2 3 4
    Handling
    Loading Outbound
    1 Preliminary
    Transportation
    5
    Packing
    6
    Insurance
    Main
    Customs International
    Clearance Transportation 7
    Duties

    11 10 9 8

    Unloading Final Handling


    Transportation Inbound
    Acronym (…named location)
    Acronym dictates mode and where the lines are drawn

    SELLER Export Import BUYER


    Clearance Clearance

    Goods

    PRE -CARRIAGE MAIN CARRIAGE ON-CARRIAGE

    Seller’s Risk

    Seller’s Cost
    E Terms: Departure

     EXW (named place)


    Under E-terms, the seller minimizes his risk
    by only making the goods available at his own
    premises.
    Export Import
    SELLER Clearance BUYER
    Clearance

    Goods

    PRE -CARRIAGE MAIN CARRIAGE ON-CARRIAGE


    Seller’s Risk

    Seller’s Cost
    EXW = Ex Works

     The seller fulfills his obligation to deliver when he has made


    the goods available at his premises to the buyer.
     The seller is not responsible for loading the goods on the
    vehicle provided by the buyer
     The seller is not responsible for clearing the goods for export,
    unless agreed.
     The buyer bears all costs and risks involved in taking the
    goods from the seller’s premises to the desired destination.
    Group F: Main Carriage Not Paid
    by Seller

     FAS - Free Alongside Ship


     FCA - Free Carrier
     FOB - Free On Board

    Under F-terms, the seller arranges and pays for pre-carriage in


    the country of export. Including export clearance under FCA and
    FOB
    FAS (…named port of shipment)
    Seller
    • delivers goods alongside ship
    • evidence of delivery

    SELLER Export Import BUYER


    Clearance Clearance

    Goods

    PRE-CARRIAGE MAIN CARRIAGE ON-CARRIAGE

    Seller’s Risk
    Buyer
    • export documents
    • nominates carrier,
    Seller’s Cost • contracts carriage
    • pays freight
    FCA (…named place)
    Seller
    • clears export customs,
    • delivers goods to carrier
    • evidence of delivery

    SELLER Export Import BUYER


    Clearance Clearance

    Goods

    PRE-CARRIAGE MAIN CARRIAGE ON-CARRIAGE

    Seller’s Risk

    Buyer
    Seller’s Cost • nominates carrier,
    • contracts carriage
    • pays freight
    FOB (…named port of shipment)
    Seller
    • clears export customs,
    • delivers and loads goods on ship
    • evidence of delivery
    SELLER Export Import BUYER
    Clearance Clearance

    Goods

    PRE-CARRIAGE MAIN CARRIAGE ON-CARRIAGE

    Seller’s Risk

    Buyer
    Seller’s Cost • nominates carrier,
    • contracts carriage
    • pays freight
    Group C: Main Carriage Paid by
    Seller

     CFR - Cost & FReight


     CIF - Cost, Insurance & Freight
     CPT - Carriage Paid To
     CIP - Carriage & Insurance Paid to

    Under C-terms, the seller arranges and pays for the main
    carriage but without assuming the risk of the main carriage.
    CFR (…named port of destination)

    SELLER Export Import BUYER


    Clearance Clearance

    Goods

    PRE-CARRIAGE MAIN CARRIAGE ON-CARRIAGE

    Seller’s Risk

    Seller’s Cost
    CIF (…named port of destination)

    SELLER Export Import BUYER


    Clearance Clearance

    Goods

    PRE-CARRIAGE MAIN CARRIAGE ON-CARRIAGE

    Seller’s Risk

    Seller’s Cost + Insurance


    Ocean vs Other
    ● Ocean Terms Other Terms

    ○ CFR CPT

    ○ CIF CIP
    Group D: Arrival

     DAF - Delivered At Frontier


     DES - Delivered Ex Ship
     DEQ - Delivered Ex Quay
     DDU - Delivered Duty Unpaid
     DDP - Delivered Duty Paid
    Under D-terms, the seller’s cost/risk is maximized because he must make
    the goods available at the agreed destination. Including import clearance
    under DEQ and DDP
    DAF (…named place)

    SELLER Export Import BUYER


    Clearance Clearance

    Goods

    PRE-CARRIAGE MAIN CARRIAGE ON-CARRIAGE

    Seller’s Risk

    Seller’s Cost
    DES (…named port of destination)

    SELLER Export Import BUYER


    Clearance Clearance

    Goods

    PRE-CARRIAGE MAIN CARRIAGE ON-CARRIAGE

    Seller’s Risk

    Seller’s Cost
    DEQ (…named port of destination)

    SELLER Export Import BUYER


    Clearance Clearance

    Goods

    PRE-CARRIAGE MAIN CARRIAGE ON-CARRIAGE

    Seller’s Risk

    Seller’s Cost
    Ocean vs Other
     Ocean Terms Other
    Terms
    DES DDU
    DEQ DDP

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