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About the Authors
- Yui-yip Lau, Adolf K.Y. Ng, Jorge Acevedo
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- Book:
- Principles of Global Supply Chain Management
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- Anthem Press
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- 09 July 2019
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- 15 June 2019, pp xxi-xxii
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Principles of Global Supply Chain Management
- Yui-yip Lau, Adolf K.Y. Ng, Jorge Acevedo
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- Anthem Press
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- 09 July 2019
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- 15 June 2019
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Supply chain management is a cornerstone of the competitive strategies of many present-day organizations and has evolved from the operational to the strategic level. Understanding this, ‘Managing Global Supply Chains’ offers a comprehensive insight into the global supply chain sector – analysing the strategic, operational and financial aspects of the industry, and addressing the key elements in the management of global supply chains. The book is based on four principles, namely, clarity (which makes it simple for readers to comprehend); richness (which identifies questions from various academic experiences and disciplines to encourage readers to find out possible unexplored research or key issues); innovations (which prompts readers to reflect on changing traditional, day-to-day operations for enhancement); and practicality (which equips learners with the skills and knowledge to work in the real world).
12 - Case Exercises in Global Supply Chains
- Yui-yip Lau, Adolf K.Y. Ng, Jorge Acevedo
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- Principles of Global Supply Chain Management
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- Anthem Press
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- 09 July 2019
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- 15 June 2019, pp 177-186
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Summary
Supply chain management is an applied subject. In order to facilitate the learners on how to apply the different learning knowledge and concepts into a practical workplace and dynamic business environment, various case exercises in global supply chains are provided in this chapter. In this chapter, we will achieve the following objectives:
• foster supply chain management subjects delivery as an additional learning tool to supplement textbooks and
• encourage learners to achieve the expected learning outcomes by providing them with supplementary exercises and case studies.
Specialized Warehouse
Assume that you are the business development manager of ABC Liner Shipping Company. Recently, ABC Liner Shipping Company launched a new shipping routing in order to create a new logistics business. The new shipping routing will pass through key container ports including Qingdao, Ningbo, Savannah, Charleston, Boston and New York. You need to select ONE container port to provide the recommendations on how to develop a specialized warehouse.
Note 1: Specialized warehouse is served for special handling commodities, for instance, cold storage, hazardous material, household goods, agricultural products, bulk petroleum and chemical storage, document storage, whiskey, bulk lumber and so on.
Note 2: The characteristics of liner shipping include (1) common carrier, (2) fixed schedule, (3) fixed route and (4) regularity
The Belt and Road Initiative in Maritime Transport Networks
The Belt and Road Initiative refers to the Silk Road Economic Belt and 21st Century Maritime Silk Road, a significant development strategy launched by the Chinese government with the intention of promoting economic cooperation among countries along the proposed Belt and Road routes. The initiative has been designed to enhance the orderly free- flow of economic factors and the efficient allocation of resources. It is also intended to further market integration and create a regional economic cooperation framework of benefit to all. Assume that you are the vessel planning manager of a liner shipping company. You need to manage four 2,000 TEU container ships, four 6,000 TEU container ships and four 10,000 TEU container ships for a 60- day sailing schedule. You are requested to design the ship routings for Intra- Asian regions and the Belt and Road Initiative countries. Also, you need to plan which container port(s) is/ are the hub port(s) and feeder port(s).
7 - Climate Change in a Global Environment
- Yui-yip Lau, Adolf K.Y. Ng, Jorge Acevedo
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- Principles of Global Supply Chain Management
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- Anthem Press
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- 09 July 2019
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Ports are increasingly influenced by the impacts posed by climate change. As they are critical nodes for international trade and shipping, it has brought notable implications for human welfare and the global economy. Hence, the time has come for a paradigm shift on how ports plan for and perform new strategies. In this chapter, we will achieve the following objectives:
• understand the relationships between climate change and sustainability of supply chains;
• provide discussions on the theoretical framework of institutions and institutional systems;
• present the experiences of climate change adaptation planning for ports of San Diego (United States) and Vancouver (Canada);
• learn about institutional theory and initiate new thought in planning and decision- making.
Introduction
Climate change is at the forefront due to the potential catastrophic risks posed to human lives and activities (Keohane and Victor, 2010; UNECE, 2010; Intergovernmental Panel on Climate Change, 2012). Schaeffer et al. (2012) warn that by 2100, sea levels may be up to 80 centimeters than what they are today. It is too late to avoid all the deleterious effects of climate change, in no small part due to uncertainties on how the problem should be addressed (Applegate, 2010). Thus, adaptation is not a choice but a necessity. In this case, supply chains are especially vulnerable to such risks. Despite strong evidence suggesting that institutional systems influence climate change adaptation due to ambiguity and competing political interests (Wheeler et al., 2009; Keohane and Victor, 2010; Preston et al., 2011; Osthorst and Manz, 2012), most attention focuses on physical and technical details of capitalintensive engineering projects, for example, elevation, levee, dykes and so on (National Research Council of the USA (NRC), 2010a). Adaptation is still not adequately investigated, especially in terms of the reduction of uncertainty in decision- making, public policy, and institutional practice. Indeed, the sustainability of supply chains depends on the extent to which supply chain facilities and infrastructures can adapt and remain resilient to climate change impacts.
Understanding such, this chapter dissects the dilemmas of climate adaptation planning. It investigates whether climate change adaptation has catalyzed a transformation of the nature and practice of planning. Two port cases, namely, San Diego (United States) and Vancouver (Canada), are used in our discussions. Ports are appropriate targets for illustrative purpose as they play important roles in affecting the efficiency of supply chains (Ng and Liu, 2014).
11 - Logistics Education
- Yui-yip Lau, Adolf K.Y. Ng, Jorge Acevedo
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- Book:
- Principles of Global Supply Chain Management
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- Anthem Press
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- 09 July 2019
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Education generates human capital and competitive advantages of nations, including the logistics and supply chain sectors. In order to meet everchanging logistics business environment, the logistics education in Hong Kong has undergone significant changes in the postmodern era. In this chapter, we will achieve the following objectives:
• provide an overview of Hong Kong's logistics education;
• evaluate the impact of the 334- education reform on the development of Hong Kong's logistics education; and
• summarize the restructuring of logistics education in Hong Kong.
Introduction
Logistics industry is traditionally one of the four economic pillars of Hong Kong (The Census and Statistics Department, 2016). Within service, the logistics industry has generated 6 percent of Hong Kong's total GDP in 2015. Thanks to the domestic demand and investments, Hong Kong's annual growth rate (in terms of GDP) has recorded an average of 5.38 percent between 1974 and 2015 (The Census and Statistics Department, 2016). Recently, Hong Kong has become an international hub for trade, business and finance, notably, with Mainland China entering the World Trade Organization (WTO) in 2001, the introduction of Mainland and Hong Kong Closer Economic Partnership Arrangement (CEPA) in 2003 and the introduction of the “Belt and Road” initiative in 2015. As such, the logistics industry has made significant economic contributions to the ever- changing global environment. However, Hong Kong's logistics industry has faced keen competition with neighboring countries in the Asia- Pacific regions. To further strengthen and consolidate the competitiveness of Hong Kong's logistics industry in the world, it would be crucial to develop a comprehensive logistics education. In today's global and dynamic environment, there has been increasing concern that professional education could be an effective approach to improve productivity, and employees of the highest quality have the quality and competency to respond effectively to continuous changes (Becker, 1993). Recently, there has been a tremendous growth in academic institutions considering apprentice- style, non academic learning approaches to add on their “professional” and “practicebased” programs (Bourner et al., 2001).
2 - Managing Outbound Logistics and Distribution
- Yui-yip Lau, Adolf K.Y. Ng, Jorge Acevedo
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- Principles of Global Supply Chain Management
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- 09 July 2019
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Outbound logistics is the downstream of supply chain management (SCM). The critical role of outbound logistics is to distribute products and services to final end users at the right time, to the right place, for the right people and at the right quality and quantity. In this chapter, we accomplish the following:
• understand the concept of SCM;
• investigate a supply chain strategy;
• explain the role of distribution in supply chains;
• analyze different distribution channels;
• compare different types of port operations, namely, container ports, midstream operations, dry bulk cargo terminals, liquid bulk cargo terminals, roll- on/ roll- off terminals and inland ports; and
• learn about Hong Kong's airfreight industry.
Supply Chain Management
The field of SCM emerged over a half century ago and continues to evolve. In the early 1980s, scholars began to connect SCM to “systems theory” and “holism” (New, 1997). In the 1990s, research on SCM significantly increased (Huan et al., 2004). However, the definitions of “supply chain” and “supply chain management” are not universally shared, with different scholars providing different perspectives. Before reviewing the role of outbound logistics in supply chains, we may develop a clear understanding of the supply chain. Thus, we examine some central concepts as follows.
Many scholars have tried to provide effective interpretations of SCM through different approaches. Simchi- Levi et al. (2009, p. 1) offered the following definition: “supply chain management is a set of approaches utilized to efficiently integrate suppliers, manufacturers, warehouses, and stores, so that merchandise is produced and distributed at the right quantities, to the right locations, and at the right time, in order to minimize systemwide costs while satisfying service level requirements.” SCM concerns the coordination of all activities related to the entire supply chain, starting with raw materials and concluding with a satisfied customer. The main objective of SCM is to reshape the supply chain to maximize an operator's competitive advantage over others (Heizer et al., 2017). In addition, Christopher (1992, p. 12) provided this explanation: “The supply chain is the network of organizations that are involved, through upstream and downstream linkages, in the different processes and activities that produce value in the form of products and services in the hands of the ultimate customer.”
Frontmatter
- Yui-yip Lau, Adolf K.Y. Ng, Jorge Acevedo
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- Principles of Global Supply Chain Management
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6 - Inland Ports in Global Supply Chains
- Yui-yip Lau, Adolf K.Y. Ng, Jorge Acevedo
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- Principles of Global Supply Chain Management
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- Anthem Press
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- 09 July 2019
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- 15 June 2019, pp 87-100
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Due to capacity expansion, environmental considerations, community restrictions and complex supply chain management, an inland port has emerged as a notable actor to connect a hub port and hinterland area. Mexico has demonstrated illustrative examples of inland ports in global supply chains. In this chapter, we will achieve the following objectives:
• understand a movement from a traditional supply chain with a lot of middlemen to a cheaper supply chain that is reliable and agile, without middlemen, to achieve direct benefits for Mexican producers;
• explore different types of inland ports around the world;
• analyze investment that recognizes the affordability issue of the current fresh produce supply chain system, its markets and warehouse storage, and how it does not displace that system with unaffordable rental levels;
• create new value chains through the introduction of business processing and technical business support facilities; and
• underpin the development of free trade negotiations (consortium) by delivering safer, low cost and higher quality products and promote supply chain infrastructure and use of the Centre Port partners.
Introduction
A supply chain is a series of organizations that interact with one another in order to bring products (goods or services) to the final consumer. Typically a supply chain includes customer or consumer, retail or retail stages, merchants or distributors, manufacturers or manufacturers and suppliers, among others (Chan et al., 2012; Tang and Lau, 2013; Lau et al., 2018).
One of the main purposes of managing supply chains is the coordination and improvement of interorganizational processes. The world's bestrecognized definitions come from the Council of Professional Supply Chain Management, formerly known as the Council of Logistics Management.
Before the 1990s, companies were oriented to managing their internal processes, but as the approach to supply chain management emerged, the emphasis shifted to managing interorganizational processes, which went beyond the boundaries of one's own institution.
In an integrated supply chain approach, organizations realize that they need to include not only their suppliers and customers, but also third- party service providers (intermediary and service providers) to identify and improve their critical processes, in such a way that can be gained collaboratively through synergies, in order to meet customer requirements at a lower cost, with greater quality and speed (Figure 6.1).
1 - Introduction
- Yui-yip Lau, Adolf K.Y. Ng, Jorge Acevedo
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- Principles of Global Supply Chain Management
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Setting the Scene
This book provides a comprehensive introduction to the understanding of global supply chains. In the twenty- first century, firms encounter untold pressures including market expansion, globalization, keen competition and increasing customer expectations in a dynamic business environment, where competitors continuously upgrade capabilities so as to remain competitive. This encourages firms to provide superior customer service and reduce total cost via upgrading logistics capabilities. Firms such as General Electric, Wal- Mart, Dell, Cisco and Southern Book Company are able to control supply chains and root out volatilities. Indeed, a competitive supply chain is the key driver for firms to accomplish a competitive edge by improving productivity, decreasing operating cost, keeping strong partnership, increasing revenue and improving customer services (Chan et al., 2012). Hence, today business competition often is “a supply chain against another supply chain” rather than a company against another company (Bowersox et al., 2013). In this regard, the boundary between logistics and supply chain management (SCM) is often confused. The former is a subgroup of SCM that covers additional issues beyond the flow of products and services and incorporates logistics into a core supply chain focused function (Tang and Lau, 2013). The Council of Supply Chain Management Professionals (2007) distinguishes logistics management from SCM. Logistics management is defined as “part of supply chain management that plans, implements, and controls the efficient, effective forward and reverse flow and storage of goods, services and related information between the point of origin and the point of consumption in order to meet customers’ requirements.” SCM, however, “encompasses the planning and management of all activities involved in sourcing and procurement, conversion, and all logistics management activities. Importantly, it also includes coordination and collaboration with channel partners, which can be suppliers, intermediaries, third party service providers, and customers. In essence, supply chain management integrates supply and demand management within and across companies.” Logistics includes all relevant processes pertaining to warehouse, materials handling, packaging, transport, distribution, reception, customer relationship management, demand forecasting, inventory management, procurement and reverse logistics, to name but a few.
9 - Reverse Logistics
- Yui-yip Lau, Adolf K.Y. Ng, Jorge Acevedo
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- Principles of Global Supply Chain Management
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- Anthem Press
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- 09 July 2019
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Reverse logistics is the process of moving goods from their typical final destination for the purpose of capturing value, or proper disposal. Remanufacturing and refurbishing activities may also be included in the definition of reverse logistics. In this chapter, we will achieve the following objectives:
• provide an overview of key issues of reverse logistics;
• discuss reverse logistics management;
• describe reverse logistics management activities; and
• illustrate typical examples in reverse logistics management.
Introduction
Only a few decades ago, the world spoke about “quality” as a concept to add value in products and services; then the “just in time” concept appeared some years after. At that time, engineers, administrators and logistics strategists focused on designing intelligent and reliable strategies that would boost the concept of “supply chain” and guarantee greater efficiency in the delivery of products and services on time. It was essential to do what was necessary to achieve such, the production lines did not stop for any reason and added to the previous concept of quality and the consumers satisfied their need, taste or desire as soon as possible.
Quality refers to the ability of an object to meet implicit or explicit needs according to a parameter, a fulfillment of quality requirements (Figure 9.1). It is a subjective concept related to the perceptions of each individual to compare the thing with any other of the same species, and various factors such as culture, product or service, needs and expectations directly influence this definition.
The term quality of Latin is “qualitative.” A current view of the concept of quality in marketing indicates that quality is not delivering to the customer what they want, but delivering what they had never imagined they were looking for and that once they get it, realize it is what they have always wanted.
There is also quality control, quality assurance and quality management concepts that are related to quality in industries and services.
Preface
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- By Yui-Yip Lau, Division of Business and Hospitality Management, Hong Kong Community College, The Hong Kong Polytechnic University, Adolf K. Y. Ng, Asper School of Business, University of Manitoba, Canada, Jorge Acevedo Alarid, president of the Mexican Logistics Institute (Instituto Mexicano de Logística, IML).
- Yui-yip Lau, Adolf K.Y. Ng, Jorge Acevedo
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- Book:
- Principles of Global Supply Chain Management
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- Anthem Press
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- 09 July 2019
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- 15 June 2019, pp xvii-xx
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Summary
Absorb what is useful, discard what is useless and add what is specifically your own.
Knowing is not enough, we must apply. Willing is not enough, we must do.
— Bruce Lee, martial artist (1940– 73)When we were designing and planning for this book, a few quick questions came to our mind: how could we transform new knowledge into practice? How important were infrastructural issues in supply chains? Were there any key research topics that have been seriously neglected in previous books publication? Were active scholars participating in research dedicated to industrial practitioners? Indeed, these are core objectives of applied research that can contribute to academic, industry and community in an ever- changing world.
This book addresses the role of supply chain in the global economy and organizations. Although global supply chain management is critical with different stakeholders within policymakers, students, researchers, logistics associations, participators, even for governmental actors who need to make strategic decisions in sustaining economic competitiveness for their countries and citizens, the core topics are often overlooked. Understanding such deficiency, we strive to include interesting, innovative, and timely topics. The contents may be similar, but different readers may have diversified expectations. Industrial practitioners may look for insight to generate appropriate strategic decisions; students and researchers may look for new ideas to develop new research areas and secure research grants; policymakers may look for best practices that will help them to develop appropriate public policies; logistics associations may look for new knowledge to review their professional training programs that align with international academic/ professional standards. Taking three years to complete this book (from writing the proposal to its final publication), we based it on four main principles, namely, “clarity” (which makes it simple for readers to comprehend), “richness” (which identifies questions from various academic experiences and disciplines to encourage readers to find out possible unexplored research or key issues), “innovations” (which stimulates readers to reflect on changing traditional, day- to- day operations for enhancement) and “practicality” (which equips learners with the skills and knowledge to work in the real world).
This book offers fundamental knowledge with many practical cases that can fulfill the needs and expectations of different parties. Readers can get invaluable insight on the future direction of supply chain development.
Index
- Yui-yip Lau, Adolf K.Y. Ng, Jorge Acevedo
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- Principles of Global Supply Chain Management
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Contents
- Yui-yip Lau, Adolf K.Y. Ng, Jorge Acevedo
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- Principles of Global Supply Chain Management
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5 - Case Studies in Food Supply Chains
- Yui-yip Lau, Adolf K.Y. Ng, Jorge Acevedo
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- Principles of Global Supply Chain Management
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- 09 July 2019
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Summary
In this chapter, we will be providing two specific case studies on food supply chains. Halal food and wine are the two main emerging issues in food supply chains. Recently, the market for halal food has received much attention worldwide. Therefore, the demand for halal food is increasing tremendously. Additionally, a cold chain involves the transportation of temperature- sensitive products along a supply chain through thermal and refrigerated packaging methods and the logistical planning to protect the integrity of these shipments. Wine is a typical example to illustrate such a chain. Thanks to globalization, wine has become one of the important commodities in the global trading activities of the twenty- first century. In this chapter, we will achieve the following objectives:
• provide an overview of halal food market and wine market in different parts of the world;
• explain halal food and wine supply chain management (SCM); and
• analyze how to strengthen the Hong Kong halal food and wine supply chain in the Asia- Pacific regions.
Principles of Halal Food
Halal is an Arabic word that in English is translated as allowed, permitted, legal or lawful. The opposite meaning is haram, which is described as forbidden, unlawful or illegal (Department of Islamic Development Malaysia, 2005). Under Islamic principle, halal is a part of Shariah (Islamic law) and is mentioned in the Holy Quran. Shariah law is the fundamental guidance in developing the halal standard (Tan et al., 2012a) and a code of conduct for all Muslims to follow and apply to every activity including eating. Every product and service must exclude the use of non- halal ingredients (i.e., carrion, blood, flesh of the swine etc.) (Ab Talib and Johan, 2012).
According to Islam and Shariah, all disputes and issues relevant to halal or haram should be based on Quran and Sunnah. Basically, halal is a series of rules “Halalan Thoyyiban” (Sungkar and Hashim, 2009). Almighty Allah clearly states that
He has forbidden you only the Maitah (dead animal), and blood and the flesh of swine, and that which is slaughtered as a sacrifice for others than Allah (or has been slaughtered for idols, on which Allah's Name has not been mentioned while slaughtering). But if one is forced by necessity without willful disobedience, nor transgressing due limits, then is no sin on him.
3 - Supplier Selection and Procurement
- Yui-yip Lau, Adolf K.Y. Ng, Jorge Acevedo
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- Principles of Global Supply Chain Management
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- Anthem Press
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- 09 July 2019
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Summary
Supplier selection is the upstream part of supply chain management (SCM). The critical role of supplier selection is to maintain the effectiveness of supply chain operations. In this chapter, we aim to achieve the following:
• explain the role of suppliers in the supply chain;
• identify supplier selection criteria; and
• understand the principles of globalization in procurement management.
The Role of Suppliers in the Supply Chain
The idea of the supply chain is gaining importance in the global business environment. The competitive advantage of a supply chain is largely dependent on the collaboration between supply chain members, who perform different supply chain activities interdependently. A supply chain involves several members and is responsible for ensuring the smooth flow of goods or services from suppliers to customers. The suppliers perform a particularly important role in the upstream supply chain, as their work can largely affect overall supply chain performance. We illustrate an overview of SCM in Figure 3.1. In a logistics firm, the roles of the purchasing manager and supplier are interrelated. In the past, the purchasing manager's job was mainly to (1) plan and carry out manufacturing requirements, (2) evaluate the quality of goods provided by the supplier, (3) buy supplies at the lowest delivered cost and (4) arrange for warehouse goods shipments. In the contemporary era, the purchasing manager is expected to (1) perform direct insertion into key suppliers’ facility needs with interpersonal skills, (2) examine complementary strengths and weaknesses of suppliers, (3) interact with suppliers about new product designs and production and (4) use the information in a supply chain and the different financial positions of suppliers to optimize cash flow and financing for the whole of the supply chain. Thus, procurement management attempts to improve quality, reduce cost and improve the firm's entire competitive position through supplier commitment and competency (Gomm, 2010).
It is now accepted that supply chain decisions determine the firm's capital structure, cost structure, profitability, risk level and market value. In other words, SCM is evolving from a tactical, back- office function to a creation of shareholder value.
Appendix
- Yui-yip Lau, Adolf K.Y. Ng, Jorge Acevedo
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- Principles of Global Supply Chain Management
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Consortium
A consortium is a group made up of two or more individuals, companies or governments that work together toward achieving a chosen objective. Entities participating in a consortium will pool resources but otherwise are only responsible to the group in respect to the obligations that are set out in the consortium's agreement. Therefore, every entity that is under the consortium remains independent with regard to their normal business operations and has no say over another member's operations that are not related to the consortium. (Source: Investopedia.com)
Concession Agreement
A concession agreement is a negotiated contract between a company and a government that gives the company the right to operate a specific business within the government's jurisdiction, subject to certain conditions. Concession agreements may also refer to agreements between the owner of a facility and the concession owners or concessionaires that grant the latter exclusive rights to operate a specific business in the facility under specified conditions. (Source: Investopedia.com)
Hitherto
up to this time; until now: a fact hitherto unknown to here. (Source: Dictionary. com)
List of Figures
- Yui-yip Lau, Adolf K.Y. Ng, Jorge Acevedo
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- Principles of Global Supply Chain Management
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List of Tables
- Yui-yip Lau, Adolf K.Y. Ng, Jorge Acevedo
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- Principles of Global Supply Chain Management
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4 - Warehouse Management
- Yui-yip Lau, Adolf K.Y. Ng, Jorge Acevedo
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- Principles of Global Supply Chain Management
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Since the rise of globalization, the role of warehouses has fundamentally changed from operational to strategic. Warehouses are one of the key players in supply chain management. Hardware and software are critical elements for facilitating smooth warehouse operations in the twenty- first century. In this chapter, we will achieve the following objectives:
• explain the role of warehouses in the supply chain;
• discuss a variety of warehouse activities;
• give an overview of warehouse management;
• learn about a case study of the adoption of RFID technology at air cargo terminals;
• illustrate the examples of three Hong Kong air cargo terminals on warehouse management (HACTL, AAT and Cathay Pacific); and
• study a bonded warehouse at a container terminal.
The Role of Warehouses in the Supply Chain
For a supply chain to realize maximum strategic benefits from logistics, logistics management must be integrated. Integrated logistics management must include five functional areas of logistics work (see Figure 4.1). These functional areas are related to the capabilities for achieving logistics value from integrated logistics management.
The critical exigencies in the processes of logistics centers (LCs) can enhance the role of warehouse processes in outsourcing when customer behavior changes. The complexity and the opportunity to conduct additional logistics services beyond the range of warehousing and storage of goods have prompted the creation of buildings of different functionalities. It is therefore necessary to specify which buildings are warehouse buildings (WBs), warehousing centers (WCs) and LCs. Developers engaged in the development of storage space mistakenly define LCs; therefore, fundamental functional differences between the LC and other buildings should be filtered (Kolinska, 2016). Table 4.1 shows the evolution of the definition of the scope of the LC.
The main characteristic of LCs is the intermodal terminal object, although this is not the only feature that identifies LCs, WCs and WBs. Table 4.2 shows a comparison of the individual functionality of logistics infrastructure objects (Kolinska, 2016).
As products and materials are procured, a value- added inventory flow is initiated that ultimately results in the ownership transfer of finished products to customers. However, with the emergence of globalization, reducing lead times requires the continuous improvement of material flow throughout the logistics supply chain.
8 - Sustainability in Infrastructure-Based Supply Chains
- Yui-yip Lau, Adolf K.Y. Ng, Jorge Acevedo
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- Book:
- Principles of Global Supply Chain Management
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- Anthem Press
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- 09 July 2019
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- 15 June 2019, pp 115-128
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To maintain sustainable competitive advantage, logistics organizations design and implement sustainable infrastructure- based supply chains. The competitiveness of logistics is reflected in its ability to optimize the supply chain process in a cost- effective manner. In this chapter, we will achieve the following objectives:
• explain the concept of sustainable infrastructure-based supply chains;
• learn about the Holistic Vision Model® and Holistic Infrastructure Model in the management of global supply chains; and
• identify role and cost of infrastructure in the supply chain.
Introduction
Infrastructure by itself does not generate value. Logistics platforms, industrial zones and industrial parks were, and still are, one of the main instruments, in terms of cost and effectiveness, to promote the development of industry in growing economies, as well as to promote the economic development of rural and peripheral regions. However, the results depend on a set of internal and external factors that determine the growth of these developments, so it is expected that when some of these are not available in the necessary conditions, the achievements will be minimal compared to the high levels of investment, and even poor results may imply higher costs, mainly for businesses and governments.
In this context, when industrial and logistics infrastructure is developed that do not qualify the minimum requirements nor has the urban industrial equipment, it is possible that it cannot significantly influence the level of industrialization of a country, slowing down industrial production, even when the economies of agglomeration benefit the gradual establishment of new companies and investments. Thus, industrial infrastructure, logistics and associated services must meet certain localization factors, economic and extra- economic, capable not only of attracting companies, but retaining them and promoting their full development. Indeed, much of the world's poverty is due to inadequate access to opportunities, development, hopes and dreams, due to limited access to infrastructure and a highly vulnerable environment.
The global economy is experiencing a dynamism and volatility that puts investment at risk for the growth, strengthening and development of necessary infrastructure, which guarantees the demands for basic services, competitive supply chains and the sustainability of the environment.