Chapter 8: LOGISTICS Fundamentals of International Business Copyright © 2010 Thompson Educational Publishing, Inc CHAPTER 8: Logistics Part 1

Chapter 8 Overview Types of Logistics Supply Chain Issues in the Supply Chain Culminating Activity Section 5: Marketing&Logistics Modes of Transportation LOGISTICS

Chapter 8: LOGISTICS Fundamentals of International Business Copyright © 2010 Thompson Educational Publishing, Inc. Chapter Objectives By the time you finish this chapter, you should be able to:  Compare the logistics of delivering a product to a local, national, or international market  Describe the key factors that influence the ways in which a company may deliver its product to an international market  Compare the advantages and disadvantages of different modes of transportation for distributing a product to different world markets  Identify, drawing on a variety of sources including the Internet, information to facilitate the import/export process  Explain the role of the Canada Border Services Agency

Marketing a product involves….. Marketing involves:  Research  Product Development  Pricing  Advertising and Promotion  Sales  _____________ Chapter 8: LOGISTICS Fundamentals of International Business Copyright © 2010 Thompson Educational Publishing, Inc.

Logistics……gone wrong

New Ad Campaign 1.Why make it? 2.How does UPS define logistics? 3.What is their main message? VIDEO

Chapter 8: LOGISTICS Fundamentals of International Business Copyright © 2010 Thompson Educational Publishing, Inc. Logistics Defined Logistics The _________ of the flow of goods and services both ______________an organization, from the point of origin to the point of consumption. It consists of transportation, inventory management, warehousing and storage, and packaging. Three types of logistics:

 Originally a military term  Referred to the skills used to calculate and plan the movement of _________________ and their supplies LOGISTICS - Military

THINK ABOUT IT….  In 1812, Napoleon Bonaparte led his French army of men from Italy to Russia. What logistics did he have to consider and what problems in logistics would he have had?

Chapter 8: LOGISTICS Fundamentals of International Business Copyright © 2010 Thompson Educational Publishing, Inc. LOGISTICS - Production ______________ logistics Logistic processes _____________ a company (usually a manufacturing business)  ensures that each machine and workstation in a plant has:  the right ____________  in the right ___________ and quality  at the right point in _________

____________ manufacturing Everyone involved in making a product – design and manufacturing engineers, suppliers, labour, marketing and salespeople – ________________ on it from concept through production. The TEAM is focused on one product, so there is a cycle of ___________________, resulting in cost savings (energy costs) and increased skill sets of combined workforce. Chapter 8: LOGISTICS Fundamentals of International Business Copyright © 2010 Thompson Educational Publishing, Inc.

LOGISTICS - Business _____________ logistics A process that ensures a ________________________ __________________to all parts of a business through a network of computer terminals, transportation links, and storage facilities. ______________ Inventory maintenance Order processing Acquisition Protective packaging ______________ Materials handling Information maintenance

Production / Business Logistics - Review ___________ Logistics  Logistic processes within a company (usually a manufacturing business)  ensures that each machine and workstation in a plant has:  the right material  in the right quantity and quality  at the right point in time ___________ Logistics A process that ensures a steady flow of needed materials and information to all parts of a business through a network of computer terminals, transportation links, and storage facilities

Chapter 8 Overview Types of Logistics Supply Chain Issues in the Supply Chain Culminating Activity Section 5: Marketing&Logistics Modes of Transportation LOGISTICS

Chapter 8: LOGISTICS Fundamentals of International Business Copyright © 2010 Thompson Educational Publishing, Inc. Logistics Defined Logistics The ______________of the flow of goods and services both ______________________ an organization, from the point of origin to the point of consumption. It consists of transportation, inventory management, warehousing and storage, and packaging.

Chapter 8: LOGISTICS Fundamentals of International Business Copyright © 2010 Thompson Educational Publishing, Inc. Supply Chain Supply chain The sum total of all activities involved in ________ ________________________________________ __________________________________ and moving the semi-processed or finished goods out of the organization toward the end-consumer.

Clover Leaf Tuna – WESTON FOODS

Chapter 8: LOGISTICS Fundamentals of International Business Copyright © 2010 Thompson Educational Publishing, Inc. Supply Chain ______________________ A form of business organization in which a company owns the ___________supply chain, or significant portions of it, from acquisition of raw materials to retailing.

WESTON FOODS HORIZONTAL BAKERY HOLDINGSRETAIL HOLDINGS

Chapter 8: LOGISTICS Fundamentals of International Business Copyright © 2010 Thompson Educational Publishing, Inc. Supply Chain _________________________ A method of ______________a company by acquiring its competitors.

Chapter 8: LOGISTICS Fundamentals of International Business Copyright © 2010 Thompson Educational Publishing, Inc. Supply Chain The main links in the supply chain are:  Inventory management  ____________  Supplier co-ordination / management  Information processing / management  Physical distribution – modes of transportation

Chapter 8: LOGISTICS 1. _____________________________  For retailers, this requires a system that records sales  Usually a ___________________ terminal, a system that tracks retail sales by recording the code or stock number of each stock-keeping unit (SKU) – stock keeping unit UPC code (12 numbers)

Chapter 8: LOGISTICS Fundamentals of International Business Copyright © 2010 Thompson Educational Publishing, Inc. 2. ________________ Storage Four possible locations for the storage of goods:  Place where the goods are made  Warehouse  Distribution centre  Place that receives the goods Used under license from Shutterstock, Inc

Chapter 8: LOGISTICS Fundamentals of International Business Copyright © 2010 Thompson Educational Publishing, Inc. 2. _____________ Storage of goods takes up valuable space and increases the possibility of damage or theft. ________________ inventory systems are used to eliminate storage altogether. JIT requires suppliers to make and ship the materials that factory or retailer needs quickly enough that the goods and materials arrive at the workstation, factory floor, or retail store just as they are needed.

Chapter 8: LOGISTICS Fundamentals of International Business Copyright © 2010 Thompson Educational Publishing, Inc. 3. ____________________________ Involves negotiating ________ terms, setting up the method of payment, and arranging exchange of funds across the supply chain. _________________ A financial guarantee, issued by a buyer’s bank, that they have sufficient collateral on deposit to pay for a shipment. Letters of credit are often used for international transactions – MINIMIZE FINANCIAL RISK

Chapter 8: LOGISTICS Fundamentals of International Business Copyright © 2010 Thompson Educational Publishing, Inc. 4. _______________________ ____________ Often referred to as ____________ or procurement, the practice of finding reliable sources for the products and services that a business needs.

4. ______________________________ ______________: finding _____________suppliers  The process of finding _____________suppliers for:  Raw materials (e.g. palm oil, fisheries, steel, oil)  _____________ (e.g. food packaging machinery)  Technologies (e.g. database software program)  Manufactured components (e.g. auto parts)  Questions to Consider:  Where is the most cost effective supplier? Overseas or domestically? Which will reduce production costs?  Will you use a subsidiary, joint venture partner, or an independent contractor?

Chapter 8: LOGISTICS Fundamentals of International Business Copyright © 2010 Thompson Educational Publishing, Inc. 4. ______________________– Sourcing Terms _________________ The strategic use of outside resources (partners) to perform activities that were previously handled internally by the company itself. (e.g. call centers) __________________ Sourcing particular business functions or services, such as telemarketing, to a company in a foreign country that is relatively close in distance. ___________________ A company’s establishment of a specific division within the business, such as an advertising department or customer call centre, to handle a function that is normally outsourced.

Chapter 8: LOGISTICS Fundamentals of International Business Copyright © 2010 Thompson Educational Publishing, Inc. 4. _______________________ ________________ The transfer of certain business functions by a company to a branch of the company that is located in another country, usually to save on labour costs. _______________ A company’s contracting out of a function (e.g. accounting) to other businesses within its own country, for example to another state or province where labour is cheaper or facilities are better. Used under license from Shutterstock, Inc

Chapter 8: LOGISTICS Fundamentals of International Business Copyright © 2010 Thompson Educational Publishing, Inc. 5. _______________________ Each member of the supply chain requires instant access to information, and all members need to be ____________ to the same information source.

_______________________________  The management and ___________of information  The use of _________________is increasingly common  EDI allows businesses to use computers to communicate with each other and speeds up transmission of business data, documents, and the transfer of funds  Example:  When a product at GIANT is scanned for purchase, its supplier will be immediately informed via EDI 5. _____________________________

REVIEW –Supply Chain 1.__________________________(Point of Sale) 2._________________– JIT inventory systems 3.________________________– Letters of Credit 4._______________________– Sourcing 5.________________________________- EDI Chapter 8: LOGISTICS Fundamentals of International Business Copyright © 2010 Thompson Educational Publishing, Inc.

Homework  Think About It Questions  p. 219 & p. 227 Chapter 8: LOGISTICS Fundamentals of International Business Copyright © 2010 Thompson Educational Publishing, Inc.