Managing the global pipeline

7 important questions on Managing the global pipeline

What is the goal of a global company?

Growing its business by extending its markets whilst at the same time seeking cost reduction through economies of scale and focused factories/assembly operations.

In which thee ways have business sought to implement their global logistics strategies?

  1. Focused factories
  2. Centralisation of inventories
  3. Postponement and localisation

Explain the square root rule.

The rule states that the reduction in total safety stock that can be expected through reducing the number of stock locations is proportional to the square root of the number of stock locations before and after rationalisation.
Thus, if previously there were 25 stock locations and now there are only four then the overall
reduction in inventory would be in the ratio of  or 5:2, i.e. a 60 per cent
reduction.
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Where does SCEM stand for and what does it mean?

Supply chain event management

SCEM is the process of monitoring the planned sequence of activities along a supply chain and the subsequent reporting of any divergence from that plan.

What is supply chain finance?

The idea is that often the customer is bigger than its suppliers and sometimes more soundly based financially, the customer can access finance at a lower cost than the supplier. Using a financial intermediary - usually a bank - the customer's credit rating advantage enables a lower financing cost to be applied to the transaction.

What are the guiding principles for organizing global logistics?

  1. Structure and control
  2. Customer service management
  3. Outsourcing and partnerships
  4. Logistics information

What is offshore sourcing?

Search for suppliers and production partners in countries with lower labour and material costs. To produce your products at lower cost.

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