Going Global Global Supply Chain

Management and Importing

Chapter 1

Introduction to Global Supply Chain

Management

INTRODUCTION

What is a global

supply chain?

What is global supply chain

management?

MANAGING A GLOBAL SUPPLY CHAIN

CHALLENGES

Coordinating flow of materials, information and finance

Intellectual property protection

Conflicting business objectives and requirements between suppliers and buyers.

Identifying and assuring the reliability of international business partners

Inherent uncertainty between markets and consumer demand

Assessing finance and insurance

Currency fluctuations Compliance with international regulations and standards

Supply chain processes

SCOR model

Chapter 2

Planning the Global Supply Chain

Supply chain planning

Level One

Refine and confirm the business objectives that the supply chain must

support

Review the external markets:

• The economic environment • Current regulations in the market • Technological developments • Cultural, demographic, and infrastructural issues • Review the competing organizations in the international marketplace

Review internal processes: • Product characteristics • Service characteristics • Operational strategy • Competitive strategy analysis

Examine existing supply chain processes and assess how they match business requirements

Network

Processes

Information systems

Organization

Risk management

Supply chain planning

Level Two

Supply chain planning

Plan reverse logistics

or returns

Plan delivery

Plan product build

process

Plan sourcing strategy

Add operational

detail to basic

supply chain design

Level Three

ELEMENTS OF A SUPPLY CHAIN PLAN

• Cover page

• Executive summary

• Supply chain maps

• Supply chain strategies

• Human resources required

• Sourcing

• Production

• Materials management and handling

• Product modifications (if required)

• Inventory management

ELEMENTS OF A SUPPLY CHAIN PLAN

• Storage and warehouse space

• Order processing

• Shipping and transportation

• Delivery

• Quality control

• After-sales service and customer satisfaction

• Risk management

• External support partners

• Financial requirements

• Implementation schedule

Supply chain plan

Implementing the plan

Managing organizational

change

Chapter 3

Managing Procurement and Sourcing

Global sourcing

What is global sourcing?

Risks involved:

• Quality

• Ethical considerations

• Patent protection

• Transportation costs

• Shipping and distribution

schedules

• Risks related to extended transit

times

• Cultural differences

• Documentation intricacies

• Instability of foreign

governments

• Weather conditions

The sourcing process

Global sourcing

E-

procurement

Primary

and

Secondary

sourcing

Supply

base

rationalization

and

consolidation

Total

acquisition

cost

analysis

Make or

buy

analysis

Efficient sourcing

Outsourcing

Advantages Disadvantages

Reduction in costs Possibility of increased costs

Gaining outside expertise

Loss of company control

Customer service improvements

Negative impact on company employees

Focus on core competencies

Negative impact on customers

Obtaining outside technology

Relationship problems

Considerations

• Method of payment

• Payment terms

• Ensuring receipt

Compliance with

international law

Exporting considerations

International export regulations

Exchange control licenses

Export quotas

Exporting documents

Commercial invoice

Bill of lading

Export declaration

Packing list

Insurance document

Certificate of origin

Compliance with

international law

Importing considerations

Import regulations

Importers liability

Import quotas

Antidumping legislation

Tariff classification

Importing documents

Commercial invoice

Bill of lading

Import declaration

Packing list

Insurance document

Certificate of origin

Chapter 4

Incoterms

Incoterms

Summary of Incoterms

Departure (EXW)

Main Carriage Unpaid (FCA, FAS, FOB)

Main Carriage Paid (CFR, CIF, CPT, CIP)

Arrival (DAF, DES, DEQ, DDU, DDP)

Incoterms

Choosing the right Incoterm

Location of the

purchaser

and seller A company’s

experience with

international trade

Ability for either party

to obtain cost

advantages for

transportation or

warehousing

Factors that help

determine which

Incoterm is the best one

for an organization to use

Chapter 5

Production Management

Production management

Monitoring

performance

Planning

demand

fluctuations

Meeting

requirements

Time buckets

and

planning

horizons

Scheduling

steps

Materials

requirement

planning

Production

planning

activities

Adapting product design

Packaging and

transportation

Concurrent

and parallel

processing

Standardization

Standards

Type

Performance standards

Work standards

Customer service standards

ISO 9000 standards

What is subject to

regulations?

Product Production

process

Packaging

and

labelling

Types of regulations

Type

Health and safety

Environmental

Packaging

Labelling

Packing

Marking

Safety

Product release procedures

Double checking product specifications and shipment numbers against customer orders

Examining random selections of the product for quality problems

Confirming all necessary documentation has been completed

Examining packaging to ensure it meets required regulations

Preparing audit reports confirming quality procedures that were implemented during production

Checking that any required certification procedures have been applied to the shipment

Chapter 6

Inventory Management

Inventory and

global supply chains

Category

Raw material

Finished product

Work in progress (WIP)

Consumables

Service, repair, replacement and spare items (S&R items)

Inventory type

Service

Pipeline

Contingency

Safety stock

Efficient procurement

Inventory management

terminology

Term Descriptions

Ordering Economic order quantity (EOQ)

Inventory levels On-hand stock

Net stock

Net inventory

Stock-outs Stock-outs

Finances Average inventory value

Inventory carrying cost

Lost sales cost

Total policy cost

Demand Annual demand

Forecast annual demand

Lead time

Lead time demand

Inventory management

Select a system

for storing

inventory

Inventory

tracking

Maintaining optimum

inventory levels

Optimal

levels

Apply JIT

Vendor

managed

inventory

Quick

response

strategy

Planning storage

Warehouses

and distribution

Selecting locations

Centralized and

decentralized

warehousing

Chapter 7

Managing Delivery

Managing delivery

Planning transportation

Preparing a Transportation Activity Profile

Origins and destinations for required shipments between different supply chain locations, such as warehouse to retail store or supplier to manufacturing site

Required frequency of shipments between different supply chain locations

Time required to transport goods from origin to destination

Modes of transport available for the required shipments and their transit times

Transportation costs for each available mode of transport

Transportation activity profile

Carrier

contract

negotiation

Shipment

rating

Carrier

Route

selection

Modes of

transportation

Shipping

frequency

What needs

to be

planned

Upon arrival

Using foreign

cargo facilities

Customs

clearance Receiving payment

Chapter 8

Managing Intermediaries

Intermediaries

Types of

intermediaries

Freight

forwarders NVOCC

Trading

houses

Export

merchants

Export

agents

Import

agents

Import

merchants

Insurance

agents Financial

institutions

Third party logistics (3PLs)

Services offered:

Inbound freight

Customs and freight consolidation

Warehousing

Order fulfillment

Distribution

Management of freight to customers

Cargo insurance

Insurance conditions

Free of Particular Average (FPA) American Conditions (FPAAC)

FPA British Conditions (FPAEC)

With average (WA)

All risk

Special clauses

Marine extension clause

War clauses

Exemptions

Act of God

Enemies of the Queen or State

Defect or inherent vice in the goods

Act of default of the shipper or owner

The reverse supply

Type of Return

Close-outs

Buy-outs

Job-outs

Surplus

Defectives

Non-defective defectives

Salvage

Returns

Safety issue returns

Recalls

Chapter 9

Managing Returns

Managing the returns

process

Chapter 10

Managing IT

Information technology

System

Customer Relationship Management System (CRM)

Product Data Management System (PDM)

Product Lifecycle Management System (PLCM)

Inventory Management System (IMS)

Transportation Management System (TMS)

Warehouse Management System (WMS)

e-Commerce solutions

• Procurement and purchasing

• Online retail sales

• Customer relationship management (CRM)

• Inventory Management

• Transportation management

• Warehouse management

• Collaborative planning

Benefits of e-commerce

Cost

efficiencies

Automatic

notifications

Simplification

Tracking

Labelling

Reduced

administrative

costs

Auditing

Customer

service

improvements

Chapter 11

Trade Documentation

Trade documentation

Export Import

Commercial invoice Commercial invoice

Bill of lading Bill of lading

Packing list Packing list

Insurance document Insurance document

Certificate of origin Certificate of origin

Export declaration Import declaration

Standard Export and Import Documentation

Trade documentation

Export documentation

Export licenses or permits

Dangerous goods declaration

Exchange control document

Inspection certificates

Safety certifications

Additional documentation

Packing declaration

Inspection certificate

Quality certificate

Phytosanitary certificate

Fumigation certificate

Veterinary certificate

Public health certificate

ATA carnet

Import documentation

Special certificate of origin

Customs bond

Certified consular invoice

Transportation documents

Document

Waybill

Bills of lading

Straight bill of lading

Short-form bill of lading

House bill of lading

Intermodal bill of lading

Forwarder’s receipt

Chapter 12

Managing Risks

Supply chain risks

Security initiatives

• The Customs Trade Partnership against Terrorism (C-TPAT)

• The International Ship and Port Security Code (ISPS Code)

• The Container Security Initiative (CSI)

• Partners in Protection (PIP)

• Free and Secure Trade Program (FAST)

Chapter 13

Completing Import Documentation

Required documentation

• Bill of lading

• Carrier’s manifest (Cargo Control Documents)

• Canada Customs Invoice or Commercial Invoice

• Import permits, certificates or licenses (as required)

• Other documentation required to satisfy CBSA or other government departments

• Certificate of origin (if applicable)

Sample:

Bill of Lading

Sample:

Cargo Control Document

Sample:

Canada Customs Invoice

Certificate of Origin

• NAFTA (North American Free Trade Agreement)

• CIFTA (Canada-Israel Free Trade Agreement)

• CCFTA (Canada-Chile Free Trade Agreement)

• CCRFTA (Canada-Costa Rica Free Trade Agreement)

• Form “A” Certificate of Origin from certain developing countries

• For Canadian importers, the NAFTA certificate of origin is the one that is most likely to be used, because the majority of imports into Canada come from NAFTA countries.

Sample:

Certificate

of Origin

Consolidated shipments

• What are consolidated shipments?

• What are the documentary requirements?

Electronic data interchange systems

• Advance Commercial Information (ACI)

• Accelerated Commercial Release Operations Support System (ACROSS)

• Customs Self Assessment (CSA)

• Release Notification System

The importing procedure g

Release procedures

• Release with full accounting and payment

• Release on minimum documentation (RMD)

• G7 Import One Step Release on Full Documentation (RFD)

Chapter 14

Clearing Imports Through Customs

Clearance procedures

• Accounting

• Cargo Control Document

• Invoice

• Canada Customs Coding Form (B3)

• Certificates of origin

Calculating tariffs and duties

• When to pay GST

• Assessing value of imported goods

• Making payments

• Penalties and interest

• Self adjustments

• Re-determinations

• Duty drawbacks

Dispute resolution

• Making an appeal

• Appealing the decision