Roles that span the Strategic Tactical and Operational horizons Presentation to Georgia Institute of Technology H Milton Stewart School of Industrial and Systems Engineering ISyE 6340 Seminar in Global Supply Chain ID: 479254
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Supply Chain & New (Foreign) Markets
Roles that span the Strategic, Tactical and Operational horizons
Presentation to Georgia Institute of Technology
H. Milton Stewart School of Industrial and Systems Engineering
ISyE
6340, Seminar in Global Supply Chain
February 4, 2015Slide2Slide3
New Market Supply ChainEnsuring Market Foothold – Implementing the Strategy (1/5)
Customer development
Product Adaptation
Marketing
Sales
Profitability considerations
Price positioningCost structureCurrency effectsSupply Chain ComponentsDemand Planning/ForecastingInventory levels and managementDemand managementLogistics
Import model
– exploration and putting down rootsSlide4
New Market Supply ChainEnsuring Market Foothold – Implementing the Strategy (2/5)
Transfer Pricing impact on
Customs duties
Income taxes
Profitability considerations
Price positioning
Supply Chain ComponentsInventory levels and managementLogisticsImport model – exploration and putting down rootsSlide5
New Market Supply ChainEnsuring Market Foothold – Implementing the Strategy
T
he impact of
Transfer Pricing
Exporting country
Price to Hub versus
Price in local market
Hub
Re-invoicing considerations
Importing Country
Customs
Income Tax
Customs prefers highest invoice price.
Income Tax prefers highest profits. Slide6
New Market Supply ChainEnsuring Market Foothold – Implementing the Strategy (3/5)
Inventory and its management
Length of supply pipeline
The importance of Accounts Receivables
Profitability considerations
Price positioning
Cost structureSupply Chain ComponentsInventory levels and managementImport model – exploration and putting down rootsSlide7
New Market Supply ChainEnsuring Market Foothold – Implementing the Strategy
Per Unit Financials:
Price = 100
Cost = 50
For 100 units,
the value of
A/R = 10000 (30 day terms)Inventory = 50001 month of A/R (100 units) consumes the same working capital as 2 months of Inventory (200 units)Thinking of Inventory in terms or working capital (instead of units) can change your perspective on Inventory levels and help Sales.
Especially if you can encourage them to reduce payment terms so as to leverage working capital in their favor.
The importance of Accounts ReceivablesSlide8
New Market Supply ChainEnsuring Market Foothold – Implementing the Strategy (4/5)
Talent Development
Short vs Long term approaches
Signaling the market
Profitability considerations
Cost
structureSupply Chain Components
Import model
– exploration and putting down rootsSlide9
New Market Supply ChainEnsuring Market Foothold – Implementing the Strategy (5/5)
Nature of Establishment
Importer
Company Office
JV
Profitability considerations
Price positioningCost structureCurrency effectsSupply Chain ComponentsDemand Planning/Forecasting
Inventory levels and management
Demand management
Logistics
Import model
– exploration and putting down rootsSlide10Slide11
New Market Supply ChainEnsuring Market Foothold – Implementing the Strategy (1/6)
Site selection and development
Scale
For Local market only
For Local market and for Export
Construction
Facing the first challenges to Company valuesEstablishing relationships with the CommunityProfitability considerations
Price positioning
Cost structure
Currency effects
Supply Chain Components
Capacity Planning
Demand
Planning/Forecasting
Inventory levels and management
Demand management
Logistics
Manufacturing
– becoming a local playerSlide12
New Market Supply ChainEnsuring Market Foothold – Implementing the Strategy (2/6)
Manufacturing equipment sourcing
Local
Import
Establishing relationships and contributing to the local economy
Profitability considerations
Cost structureCurrency effectsSupply Chain ComponentsCapacity Planning
Logistics
Manufacturing
– becoming a local playerSlide13
New Market Supply ChainEnsuring Market Foothold – Implementing the Strategy (3/6)
Talent Development
Learning from previous experience
Short vs Long term approaches
Expressing confidence in the market
Profitability considerations
Cost structureSupply Chain Components
Manufacturing
– becoming a local playerSlide14
New Market Supply ChainEnsuring Market Foothold – Implementing the Strategy (4/6)
Plant start
up/ramp up
Meeting Company standards and expectations
Safety
Quality
ProductivityMeeting market expectationsUpholding Brand imageProfitability considerations
Price positioning
Cost structure
Supply Chain Components
Capacity Planning
Demand
Planning/Forecasting
Inventory levels and management
Demand management
Logistics
Manufacturing
– becoming a local playerSlide15
New Market Supply ChainEnsuring Market Foothold – Implementing the Strategy (5/6)
Raw Materials supply
Purchasing or Procurement
Profitability considerations
Price positioning
Cost structure
Supply Chain ComponentsCapacity PlanningDemand Planning/ForecastingInventory levels and management
Demand management
Logistics
Manufacturing
– becoming a local playerSlide16
New Market Supply ChainEnsuring Market Foothold – Implementing the Strategy (5/6)
Sourcing Substitution
Refocussing the supply chain
Local supply - autonomy
Export supply – integrating into the global supply chain
Profitability considerations
Price positioningCost structureCurrency effects
Supply Chain Components
Capacity Planning
Demand
Planning/Forecasting
Inventory levels and management
Demand management
Logistics
Manufacturing
– becoming a local playerSlide17Slide18
Supply Chain & New (Foreign) Markets
Roles that span the Strategic, Tactical and Operational horizons
Presentation to Georgia Institute of Technology
H. Milton Stewart School of Industrial and Systems Engineering
ISyE
6340, Seminar in Global Supply Chain
February 4, 2015
Thank you
Questions?Slide19
Framework and ContextSlide20
USA
France
China
India
DemographySlide21
Economic Development (1965-2004); Share of Industry in GDP
Source: IMF Report on the Boom in Non Commodity prices
IndustrializationSlide22
Institutional Quality measured by six World Bank governance indicators (political stability, government efficiency, corruption, etc)
Institutional Quality indifferent for growth to $12000 per capita
Example: Soviet Union collapsed as incomes reached $12000
ref: Fatas, Mihov, Insead
Governance