Global Supply Management Marketing 3860 – Purchasing August 3, 2004 Kimball Bullington, Ph.D. Associate Professor of Operations Management Middle Tennessee State University

Global Procurement We also are making exciting strides in two other important areas: internal product development and global procurement. Last year we assumed responsibility of global procurement from a third party. Wal-Mart Annual Report 2002

Global Procurement This allowed us to better coordinate the entire global supply chain from product development to delivery. In addition, our global procurement program allows us to share our buying power and merchandise network with all our operations throughout the world. Wal-Mart Annual Report 2002

Global Supplier Research  U.S. Department of Commerce (  Chambers of commerce  International Chamber of Commerce (  Suppliers  Importers and trade brokers  Banks  Professional associations

Global Supplier Research  Thomas Register (  Kelly’s Directory  Institute for Supply Management (  Purchasing Management Association of Canada (  CNN Financial News  Motley Fool (discussion boards)  Google and other search engines  Dun and Bradstreet (

Global Supplier Research  Thomas Register (  Kelly’s Directory  Institute for Supply Management (  Purchasing Management Association of Canada (  CNN Financial News  Motley Fool (discussion boards)  Google and other search engines  Dun and Bradstreet (

Countertrade  Barter / Swaps – exchange of goods instead of cash  Offset arrangements – Selling company agrees to purchase a given % of sales price in customer country (gov’t / military spending)  Counterpurchase – Requires original exporter to buy a specified value of goods from the importer during a specified time.

Countertrade  Buyback / Compensation – Selling firm agrees to set up a producing plant in the buying country  Switch trade – 3 rd party applies credits to a bilateral clearing arrangement

Global Supply Management: A lot of good (young) people on airplanes.

Sometimes you just have to show up and make something happen. Danner

Purchasing Wisdom from Yogi You can observe a lot just by watching.

Free Trade  Foreign Trade Zones Reduced duties Facilitated entry / exit  Maquiladoras  North American Free Trade Agreement – elimination / reduction of trade tariffs  Free Trade of the Americas Developing in South America (200%) Possibility of U.S. involvement thru expansion of NAFTA to include Chile

Reasons for Setting Up a Maquiladora  Low cost labor  Low overhead  Lower land acquisition cost  Green field  Less restrictive regulatory environment  Convenient to Mexican supply

Free Trade What advantage is there to the U.S. in free trade agreements within the Americas?

Free Trade What possible disadvantages are there to the U.S. in free trade agreements within the Americas?

Free Trade Is international trade a zero-sum game? (i.e., I win – you lose, you win – I lose)

U.S. Imports and Exports and Merchandise Trade Balance

Global Supply Management Marketing 3860 – Purchasing August 3, 2004 Kimball Bullington, Ph.D. Associate Professor of Operations Management Middle Tennessee State University