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Chapter 5+GSCM

Chapter 5 - supply chain management

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23 views18 pages

Chapter 5+GSCM

Chapter 5 - supply chain management

Uploaded by

thitran2580
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PPT, PDF, TXT or read online on Scribd
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CHAPTER 5

PURCHASING
IN GLOBAL SUPPLY CHAINS
Global supply chain management
2
Global purchasing strategy
3

Global purchasing refers to the functions


associated with the worldwide buying of
the goods, services, and/or information
required by the MNC
Global purchasing strategy
4

Demand planning Global sourcing and procurement

1. Demand forecasting 1. Strategic sourcing


2. Inventory reports 2. Measuring sourcing
3. Material performance
requirements
planning
Global purchasing involves
5

1. Worldwide management of a MNCs’ evaluation from


international to global purchasing

2. Various types of purchasing strategies

3. Outsourcing and off-shoring

4. Global customer and channel management

5. Order fulfillment and delivery

6. Global supplier selection

7. Global supplier networks


Demand planning
6

 Strategic forecasts
→ Hepl to set the strategy of how a firm will meet demand.
 Inventory planning
→ How much and when an inventory is needed and replenished
 Materials requirements planning
→ Billof materials file: product description, list of materials, parts,
components and the sequence in which the product is created.
→ Bill of materials file identifies all materials used to make each
item and the correct quantities of each.
Global strategic sourcing
7

Short Low
Request for
proposal
Spot
purchase
Request for bid
Contract And Specificity
duration Reverse auctions
Electronic
catalog

Strategic Vendor
alliance managed
inventory
Long High

High Transaction costs Low


Measuring sourcing performance
8

Cost of goods sold


Inventory turnover 
Average aggregate inventory value

 Average aggregate inventory value 


Weeks of supply   52 weeks
 Cost of goods sold 

Cost of goods sold means the annual cost for a firm to produce the
goods provided to customers
Average aggregate inventory value means the total value of all items
held in the inventory fpr the for, valued at cost (includes the raw
materials, work-in-process, finished goods, distribution inventory
considerd owned by the firm)
Types of purchasing strategy

Types of Purchasing Where to Purchase Types of Purchasing


(Where and How) (Domestic or Global) (Where and How)

Domestic
Internal Domestic
Purchasing Internal
Purchasing

Global Internal
Global
Purchasing
Purchasing
Decision
Domestic
External Domestic
Purchasing
External
Purchasing
Global External
Global
Purchasing
Global customers and channels
10

 Internationalization of purchasing refers broadly to


the types of purchasing done
 Buy from domestic suppliers in domestic markets
 Buy from foreign suppliers in domestic markets
 Buy from foreign suppliers in foreign markets
 Globalization of purchasing is tied to the level of
headquaters involvement
 No headquaters involvement
 Headquaters recommends standards and/or products
 Headquaters mandates standards and/or products
 Headquaters does the purchasing
Global supplier selection
11

1. Identify the main dimensions for global supplier


evaluation
2. Assign weights to the main dimensions for evaluation
3. Identify subdimensions for global supplier evaluation
4. Assgin weights to the subdimensions for evaluation
5. Define the scoring system for the main dimensions and
subdimensions
6. Evaluate each global supplier
7. Make the decision as to which global supplier to select
Main dimensions for global supplier evaluation
12
Cost
Speed
Quality
Flexibility
Competitive
Priorities --------------------
Industrial globalization
drivers
--------------------------------
Industry -
Security and risks
Global infrastructure
Infrastructure
Global supplier networks
13

 Refer to any form if association and/or network of global


suppliers dealing with firm-based or non-firm-specific
alliances.
 Take purchasing to a higher strategic level than
transactional relationships.
 Includes strategic intiatives:
1. International purchasing office (IPO)
2. Global supplier association
3. Global supplier networks

MNCs can rarely be successful without a supplier base


that is competitive on a worldwide basis.
International purchasing office (IPO)
14

 From a global supplier (internal) network


perspective, a typical IPO in a MNCs has the
responsibity for:
1. Identify supplier opportunities in the global
marketplace
2. Select global suppliers for partnerships
3. Coordinate input from buyers, deciders,
gatekeepers, influencers, and users that are
involved in specific global sourcing situations
Global supplier association
15

 MNC brings its key global suppliers as a formal group on a


regular basis (eg. “Annual global supplier conferences”) in
order to achieve strategic and tactical alignment.
 Toyota
 First firm to form a global supplier association in 1939
 Now, more than 200 members
 Help to facilitate global supplier development:
 Reducing costs
 Sharing best practices
 Trainning and development
 Strengthening the trust and mutual benefit of the relationship among
members
Global supplier networks
16

 Are supplier networks that are independent of any one


firm
 Provide a link between many global suppliers and many
global buyers.
 Sometimes with a broad product assortment
 Sometimes very industry-specific and/or very product-specific

 Ariba
 Using Internet to facilitate and improve the firm’s purchasing process
 Ariba Networks has more than 700.000 buyers and sellers doing
business in more than 140 countries without being tied to any one firm
Discussion: New Toyota Yaris
17

1. Why does Toyota support suppliers to improve


their technology?
2. How does Toyota global supplier networks help
to create a higher quality car?
Critical success factors for Purchasing in
global supply chains
18

1. Organizational support structure


2. Executive commitment
3. Organizational resource availability
4. Information systems and technology
5. Well-defined global sourcing process
6. Avalability of global suppliers
7. Performance measurement systems
8. Communication and coordination mechanisms

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