© 2002 Thomson Learning, Inc.

CHAPTER 15CHAPTER 15International Logistics andInternational Logistics andSupply-Chain ManagementSupply-Chain Management

Text by Profs. M. Czinkota, I. Ronkainen, Text by Profs. M. Czinkota, I. Ronkainen, and M. Moffettand M. MoffettMultimedia Presentation byMultimedia Presentation byProf. Milton PressleyProf. Milton PressleyThe University of New OrleansThe University of New Orleans

milton.pressley@uno.edumilton.pressley@uno.edu

© 2002 Thomson Learning, Inc.

• To understand the escalating importance of To understand the escalating importance of international logistics and supply-chain international logistics and supply-chain management as crucial tools for competitivenessmanagement as crucial tools for competitiveness

• To learn about materials management and To learn about materials management and physical distributionphysical distribution

• To learn why international logistics is more To learn why international logistics is more complex than domestic logisticscomplex than domestic logistics

• To see how the transportation infrastructure in To see how the transportation infrastructure in hose countries often dictates the options open to hose countries often dictates the options open to the international managerthe international manager

• To learn why inventory management is crucial To learn why inventory management is crucial for international successfor international success

LEARNING OBJECTIVESLEARNING OBJECTIVESLEARNING OBJECTIVESLEARNING OBJECTIVES

© 2002 Thomson Learning, Inc.

International Logistics DefinedInternational Logistics DefinedInternational Logistics DefinedInternational Logistics Defined• Materials ManagementMaterials Management• Physical DistributionPhysical Distribution• Systems ConceptSystems Concept• Total Cost ConceptTotal Cost Concept• Trade-Off ConceptTrade-Off Concept

© PhotoDisc

© 2002 Thomson Learning, Inc.

Supply-Chain ManagementSupply-Chain ManagementSupply-Chain ManagementSupply-Chain Management

• Supply-chain managementSupply-chain management

© PhotoDisc

© 2002 Thomson Learning, Inc.

Figure 15.1 – The International Supply ChainFigure 15.1 – The International Supply ChainFigure 15.1 – The International Supply ChainFigure 15.1 – The International Supply Chain

© 2002 Thomson Learning, Inc.

Supply-Chain ManagementSupply-Chain ManagementSupply-Chain ManagementSupply-Chain Management

• The Impact of International The Impact of International LogisticsLogistics

© PhotoDisc

© 2002 Thomson Learning, Inc.

The New Dimensions of The New Dimensions of International LogisticsInternational LogisticsThe New Dimensions of The New Dimensions of International LogisticsInternational Logistics• International Transportation IssuesInternational Transportation Issues

• Transportation InfrastructureTransportation Infrastructure• Logistics platformLogistics platform

• Ability of ModesAbility of Modes• Land bridges or sea bridgesLand bridges or sea bridges• Intermodal movementsIntermodal movements• Ocean ShippingOcean Shipping

• Linear serviceLinear service• Bulk serviceBulk service• Tramp serviceTramp service• Container shipsContainer ships• Roll-on-roll-off (RORO)Roll-on-roll-off (RORO)• PortsPorts

© PhotoDisc

© 2002 Thomson Learning, Inc.

The New Dimensions of The New Dimensions of International LogisticsInternational LogisticsThe New Dimensions of The New Dimensions of International LogisticsInternational Logistics

• Air ShippingAir Shipping• AirfreightAirfreight

© PhotoDisc

© 2002 Thomson Learning, Inc.

Figure 15.2 – International Airfreight 1960-2000Figure 15.2 – International Airfreight 1960-2000Figure 15.2 – International Airfreight 1960-2000Figure 15.2 – International Airfreight 1960-2000

© 2002 Thomson Learning, Inc.

The New Dimensions of The New Dimensions of International LogisticsInternational LogisticsThe New Dimensions of The New Dimensions of International LogisticsInternational Logistics

• DensityDensity

© PhotoDisc

© 2002 Thomson Learning, Inc.

Figure 15.3 – Loading a Train on a PlaneFigure 15.3 – Loading a Train on a PlaneFigure 15.3 – Loading a Train on a PlaneFigure 15.3 – Loading a Train on a Plane

© 2002 Thomson Learning, Inc.

The New Dimensions of The New Dimensions of International LogisticsInternational LogisticsThe New Dimensions of The New Dimensions of International LogisticsInternational Logistics

• Selecting a Mode of TransportSelecting a Mode of Transport• Transit TimeTransit Time

© PhotoDisc

© 2002 Thomson Learning, Inc.

Figure 15.4 – An Figure 15.4 – An Advertisement Advertisement for Cut Flowersfor Cut Flowers

Figure 15.4 – An Figure 15.4 – An Advertisement Advertisement for Cut Flowersfor Cut Flowers

© 2002 Thomson Learning, Inc.

The New Dimensions of The New Dimensions of International LogisticsInternational LogisticsThe New Dimensions of The New Dimensions of International LogisticsInternational Logistics

• PredictabilityPredictability• ReliabilityReliability• TrackingTracking

• Cost of Cost of TransportationTransportation

© PhotoDisc

© 2002 Thomson Learning, Inc.

© 2002 Thomson Learning, Inc.

The New Dimensions of The New Dimensions of International LogisticsInternational LogisticsThe New Dimensions of The New Dimensions of International LogisticsInternational Logistics

• Noneconomic FactorsNoneconomic Factors• Preferential policiesPreferential policies

• Export Documentation and TermsExport Documentation and Terms• Bill of ladingBill of lading• Straight bills of ladingStraight bills of lading• Shipper’s orderShipper’s order• Commercial invoiceCommercial invoice• Freight forwardersFreight forwarders

© PhotoDisc

© 2002 Thomson Learning, Inc.

The New Dimensions of The New Dimensions of International LogisticsInternational LogisticsThe New Dimensions of The New Dimensions of International LogisticsInternational Logistics

• Terms of Shipment and Sale Terms of Shipment and Sale • IncotermsIncoterms

© PhotoDisc

© 2002 Thomson Learning, Inc.

Figure 15.5 – Figure 15.5 – Selected Trade Selected Trade TermsTerms

Figure 15.5 – Figure 15.5 – Selected Trade Selected Trade TermsTerms

© 2002 Thomson Learning, Inc.

The New Dimensions of The New Dimensions of International LogisticsInternational LogisticsThe New Dimensions of The New Dimensions of International LogisticsInternational Logistics

• Ex-worksEx-works• Free carrier (FCA)Free carrier (FCA)• Free alongside ship (FAS)Free alongside ship (FAS)• Free on board (FOB)Free on board (FOB)• Cost and freight (CFR)Cost and freight (CFR)• Cost, insurance, and freight (CIF)Cost, insurance, and freight (CIF)• Carriage paid to (CPT)Carriage paid to (CPT)• Carriage and insurance paid to (CIP)Carriage and insurance paid to (CIP)• Delivered duty paid (DDP)Delivered duty paid (DDP)• Delivered duty unpaid (DDU)Delivered duty unpaid (DDU)

© PhotoDisc

© 2002 Thomson Learning, Inc.

International Inventory IssuesInternational Inventory IssuesInternational Inventory IssuesInternational Inventory Issues• Inventory Carrying CostsInventory Carrying Costs• Just-In-Time InventoryJust-In-Time Inventory• Inventory systemsInventory systems

• Order Cycle TimeOrder Cycle Time• Customer Service LevelsCustomer Service Levels• Inventory as a Strategic ToolInventory as a Strategic Tool

© PhotoDisc

© 2002 Thomson Learning, Inc.

International Packaging IssuesInternational Packaging IssuesInternational Packaging IssuesInternational Packaging Issues

• Packaging must get the merchandise to the Packaging must get the merchandise to the destination in a safe, maintainable, and destination in a safe, maintainable, and presentable conditionpresentable condition

• Packaging That May Be Adequate for Packaging That May Be Adequate for Domestic Shipping May Not Be Adequate Domestic Shipping May Not Be Adequate for International Shippingfor International Shipping

© PhotoDisc

© 2002 Thomson Learning, Inc.

Figure 15.6 – Stresses in Intermodal MovementFigure 15.6 – Stresses in Intermodal MovementFigure 15.6 – Stresses in Intermodal MovementFigure 15.6 – Stresses in Intermodal Movement

© 2002 Thomson Learning, Inc.

International Storage IssuesInternational Storage IssuesInternational Storage IssuesInternational Storage Issues• Storage FacilitiesStorage Facilities

• Location DecisionLocation Decision

• Special Trade ZonesSpecial Trade Zones• Foreign trade zonesForeign trade zones• MaquiladorasMaquiladoras• Special economic zonesSpecial economic zones

© PhotoDisc

© 2002 Thomson Learning, Inc.

Management of International Management of International LogisticsLogisticsManagement of International Management of International LogisticsLogistics• Centralized Logistics ManagementCentralized Logistics Management• Decentralized Logistics ManagementDecentralized Logistics Management• Outsourcing Logistics ServicesOutsourcing Logistics Services

• One-Stop logisticsOne-Stop logistics

© PhotoDisc

© 2002 Thomson Learning, Inc.

Logistics and the EnvironmentLogistics and the EnvironmentLogistics and the EnvironmentLogistics and the Environment• Reverse DistributionReverse Distribution

© PhotoDisc