1. Supply Chain Doctors The Supply Chain Doctors Global Supply The Supply Chain Doctors Kimball Bullington, Ph.D. Cliff Welborn, Ph.D.

2. Supply Chain Doctors The Supply Chain Doctors A warehouse established by the state, or by private enterprise, in which goods liable to duty are lodged until the duty upon them has been paid. Wikipedia.org 3/31/07 Bonded Warehousing

3. Supply Chain Doctors The Supply Chain Doctors Processing may begin on some products without waiting on customs processing. Payment of duties is delayed until the goods are needed. Bonded Warehouses - Advantages

4. Supply Chain Doctors The Supply Chain Doctors A free trade zone (FTZ) is one or more areas of a country where tariffs and quotas are eliminated and bureaucratic requirements are lowered in order to attract companies by raising the incentives for doing business there. Wikipedia Free Trade Zone

5. Supply Chain Doctors The Supply Chain Doctors Free trade zones can be defined as labor intensive mfg. centers that involve the import of raw materials or components and the export of factory products. Wikipedia Most FTZ’s are located in developing countries. China’s Special Economic Zones are often examples of FTZ’s as well. Free Trade Zone

6. Supply Chain Doctors The Supply Chain Doctors China’s Special Economic Zones (SEZ) are often examples of FTZ’s as well. Important Chinese FTZ’s and SEZ’s include: –Shanghai Waigaoqiao FTZ –Tianjin Port FTZ –Guangzhou SEZ –Ningbo SEZ –Shenzhen SEZ Free Trade Zone

7. Supply Chain Doctors The Supply Chain Doctors Established in 1934, but truly effective since 1980, the Foreign Trade Zones allow U.S.-based manufacturers to bring foreign-sourced materials into the Zone, pay no duty, incorporate those parts or materials into a finished product using U.S. parts and labor, and if the parts entered U.S. commerce, pay duties only on the value of the foreign non-duty paid content. Foreign-Trade Zone Resource Center U.S. Foreign Trade Zone