1. MULTINATIONAL LOGISTICS MANAGEMENT HOW DO INTERNATIONAL LOGISTICS DIFFER FROM DOMESTIC LOGISTICS?

2. STORAGE THE LOGISTICS SYSTEM (OR PIPELINE) STORAGE PLANT #1 PLANT #2 PLANT #3 WAREHOUSE C B A Raw Material StorageManufacturingFinished Goods Storage Movement/Transportation Raw Material Supply Points RAWMATERIALSRAWMATERIALS Markets The Procurement (or Supply) System The Operating SystemThe Distribution System Physical Supply Materials ManagementPhysical Distribution Marketing Logistics

3. Flows Within the Logistics Pipeline Flow of Information Function Flow of Material Forecasting Order Processing Finished product transport warehouse to customer Finished product inventory control Distribution center warehousing Transportation from plant to distribution center Packaging Product Planning Plant Storage Production material control Raw material storage Raw material transportation Raw material inventory control Procurement

4. Key Decisions in Logistics System Design Major Components Issues/Decisions Procurement Degree of centralization Supplier characteristics Multiple vs. single sourcing Degree of backward integration Order ProcessingOrder cycle design Information flows Degree of automation Inventory PolicyCoverage level Form/Location of inventories Transport PolicyTransport modes Utilization Degree of forward integration Customer Service PolicyFrequency of delivery Order communication Inventory coverage levels Order selection methods Facilities NetworkDegree of centralization Number of echelons For each: Number of facilities Location Scale Layout Product/process specialization Links between facilities: Information flows Sourcing Patterns

5. THE TWO FACES OF LOGISTICS TACTICALBROAD SHORT TERMQUALITATIVE QUANTITATIVELONG TERM DETAILEDSTRATEGIC

6. BASIC STRATEGIC ALTERNATIVES FOR MULTINATIONAL FIRMS IN LOGISTICS MANAGEMENT PLAN BUSINESS AROUND GEOGRAPHIC AREAS OR COUNTRIES (MULTIDOMESTIC COMPANIES) PLAN BUSINESS AROUND PRODUCTS (GLOBAL COMPANIES)

7. Basic Strategic Alternatives for Multinational Firms and their Implications for Logistics Management Multinational Firms Multinational Firms Tend to Plan Business Tend to Plan Business Around Geographic Areas Strategies Around or Countries When: Products When: Variations in customer needs for products or services from country to country are: LargeSmall Import restrictions on raw materials are:StringentLiberal Economies of scale in production are:SmallLarge Restrictions on monetary exchange are:StringentLiberal Differences in cost of labor from one country to another:SmallLarge Potential economies form coordinated planning of logistics are:SmallLarge The strength of management’s bias toward decentralization is:StrongWeak This will tend to produce a logistics management effort that is:Decentralized by Centralized by country product Not globally Globally coordinated Less visibleMore visible

8. INTERNATIONAL VS. DOMESTIC LOGISTICS RISKIER & MORE COMPLEX ATTENTION PAID TO CULTURAL, POLITICAL, AND ECONOMIC FACTORS INTERPERSONAL MANAGEMENT TASK MORE DIFFICULT: MULTIPLE PLAYERS HOME OFFICE INTERNATIONAL BUSINESS PARTNERS OFFICIALS IN CENTRAL AND LOCAL GOVERNMENT WORKERS IN THE VENTURE INVENTORY COSTS HIGHER WHY? PIPELINES LONGER & SLOWER PIPELINE INVENTORY UNCERTAINTY (POLITICAL AND PRODUCTION) SAFETY STOCK PRODUCT PROLIFERATION MORE SKUs INV. OF F.G. PILFERAGE AND RISK CARRYING COST

9. INTERNATIONAL VS. DOMESTIC LOGISTICS TRANSPORTATION MORE DIFFICULT AND COSTLIER MULTIPLE TRANSPORTATION MODES INTERNATIONAL TRANSPORTATION: OCEAN AND AIR CARRIAGE DOMESTIC TRANSPORTATION: RAIL AND TRUCK MANAGER HAS TO DEAL WITH: NEW INSTITUTIONS, NEW TERMS, COMPLEX DOCUMENTATION AND INTERMEDIARIES NEED OF CONSOLIDATION PLANNING EFFORT (LARGE ECONOMIC VESSELS) SLOWER AND COSTLIER SERVICE, MORE FREQUENT STOCKOUTS INTERNATIONAL FACILITIES NETWORK MORE DIFFICULT TO CONTROL: MANY LANGUAGES, CUSTOMS, LABOR NORMS LACK OF INFRASTRUCTURE DIFFICULT COMMUNICATION (2 YEAR WAIT TO GET A TELEPHONE!) ACCESS TO RAW MATERIALS AND LOCAL MARKETS