Global Sourcing Logistics: How to Manage Risk and Gain Competitive Advantage in a Worldwide Marketplace PDF
Preview Global Sourcing Logistics: How to Manage Risk and Gain Competitive Advantage in a Worldwide Marketplace
90858_chFM (i-xxii).ps 9/7/06 1:29 PM Page i GGlloobbaall SSoouurrcciinngg LLooggiissttiiccss This page intentionally left blank 90858_chFM (i-xxii).ps 9/7/06 1:29 PM Page iii GGlloobbaall SSoouurrcciinngg LLooggiissttiiccss HHooww ttoo MMaannaaggee RRiisskk aanndd GGaaiinn CCoommppeettiittiivvee AAddvvaannttaaggee iinn aa WWoorrllddwwiiddee MMaarrkkeettppllaaccee Thomas A. Cook American Management Association New York • Atlanta • Brussels • Chicago • Mexico City • San Francisco Shanghai • Tokyo • Toronto • Washington, D.C. 90858_chFM (i-xxii).ps 9/7/06 1:29 PM Page iv Special discounts on bulk quantities of AMACOM books are available to corporations, professional associations, and other organizations. For details, contact Special Sales Department, AMACOM, a division of American Management Association, 1601 Broadway, New York, NY 10019. Tel: 212-903-8316. Fax: 212-903-8083. E-mail: [email protected] Website: www. amacombooks.org/go/specialsales To view all AMACOM titles go to: www.amacombooks.org This publication is designed to provide accurate and authoritative information in regard to the subject matter covered. It is sold with the understanding that the publisher is not engaged in rendering legal, accounting, or other professional service. If legal advice or other expert assistance is required, the services of a competent professional person should be sought. Library of Congress Cataloging-in-Publication Data Cook, Thomas A. Global sourcing logistics : how to manage risk and gain competitive advantage in a worldwide marketplace / Thomas A. Cook. p. cm. Includes bibliographical references and index. ISBN-10: 0-8144-0892-3 ISBN-13: 978-0-8144-0892-6 1. Industrial procurement—United States. 2. Purchasing—United States. 3. Business logistics—United States. 4. Risk management—United States. I. Title. HD39.5.C662 2007 658.7—dc22 2006017378 © 2007 Thomas A. Cook. All rights reserved. Printed in the United States of America. This publication may not be reproduced, stored in a retrieval system, or transmitted in whole or in part, in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without the prior written permission of AMACOM, a division of American Management Association, 1601 Broadway, New York, NY 10019 Printing Number 10 9 8 7 6 5 4 3 2 1 90858_chFM (i-xxii).ps 9/7/06 1:29 PM Page v To Travis, Hunter, and Lindsay. . . who do me proud every day and inspire me to be creative, futuristic, and progressive in the work I do This page intentionally left blank 90858_chFM (i-xxii).ps 9/7/06 1:29 PM Page vii Contents Foreword xv Preface xvii Acknowledgments xix Chapter 1 1 Developing Foreign Sourcing This chapter sets the stage for the volume of compre- hensive and critical material covered in the balance of the book. It explains in an overview format just why companies look to sourcing overseas, how they will interface with for- eign companies, and just what options exist in finding and managing these vendor relationships. There is also an intensive guide to finding and qualifying overseas partners. Overview Sourcing vs. Outsourcing Global Purchasing Management 101 • Skill Sets for Purchasing Managers Why Develop Sourcing Options in Foreign Markets? • Locating Manufacturing Sources • Developing Relationships with Foreign Partners Joint Venture, Own, or Contract Out? vii 90858_chFM (i-xxii).ps 9/7/06 1:29 PM Page viii Chapter 2 17 The Global Sourcing Model This chapter begins the process of dissecting the risks of global sourcing, framing the issues, and providing necessary benchmarking ideas for evaluating the importance to your organizationís supply chain. Various case studies will be reviewed that provide insight and informed concepts into your own decision-making processes. Identifying the Risks of Global Sourcing. • Competition for Resources • Lack of Expertise • Force Majeure • Local and Regional Politics • Currency Issues • Local and Regional Economics • Relationships between the United States and Other Countries • Language and Culture • Energy, Communication, and Transportation Infrastructure • Government Posture • Legal and Proprietary Rights • U.S. Customs • The Physical Risks of Transporting Goods from Overseas to the United States Putting the Risks into Perspective. • Cook’s Law of Global Risk Case Studies: • Where Foreign Sourcing Makes Sense • Where Foreign Sourcing Makes Little Sense Options to Global Sourcing Foreign Trade Zones viii CONTENTS 90858_chFM (i-xxii).ps 9/7/06 1:29 PM Page ix Chapter 3 37 Landed Costs Landed Cost becomes the key factor in making sure that foreign sourcing provides competitive advantage. It is the total aggregate of all the costs to develop and bring a prod- uct to produce utilization or revenue. Understanding how landed cost works is a key ingredi- ent for making sure that off shore production is viable and to assure competitive inbound supply chains Developing Landed Cost Models • Import Landed Cost Matrix • Export Landed Cost Matrix Integrating Domestic Supply Chain Requirements Landed Cost AnalysisCase Study • Landed Costs Reducing Landed Costs Sourcing from China • Best Practices from PRC China Transportation and Logistics • Managing Service Providers: Freight Forwarders, Customhouse Brokers, and Carriers • Third Party Logistics Chapter 4 59 Post 9/11 and The Affect on Global Purchasing The world changed on 9/11. This chapter peels through the layers of government scrutiny in dealing with the vari- ous government agencies engaged in enforcement and reg- ulatory controls. The reader will have a very detailed composite of all the necessary documentation, procedures, and legal ramifica- tions involved in importing goods and merchandise into the United States. CONTENTS ix
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