Global Supply Chain Management Overview

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Questions and Answers

What is the primary objective of global supply chain management?

To strengthen local supply chains

To create net value via different activities (correct)

To increase production speed

To minimize operational costs

What does the term 'value chain' refer to in global supply chains?

The total profit earned from a product

The number of suppliers involved in product manufacturing

The value added to a product as it progresses through supply chain stages (correct)

The cost of production minus the sale price

What significant challenge has affected global supply chains recently?

Decreased demand for global trade

Rising costs of raw materials due to inflation

Increased competition in local markets

COVID-19 pandemic causing disruptions (correct)

Which approach is necessary for effectively managing global supply chains?

Integrating global networks of organizations Signup and view all the answers

What has been a trend affecting the manufacturing sector in Western countries?

Steady shrinking in their manufacturing share of the global economy Signup and view all the answers

To remain competitive, what must Western manufacturers do?

Implement changes to enhance productivity Signup and view all the answers

What is one of the logistical issues that global supply chain management must address?

Balancing supply and demand across multiple regions Signup and view all the answers

What factor has helped Western manufacturers stay afloat in business?

Higher productivity Signup and view all the answers

What is the role of first-tier suppliers in a supply chain?

They provide products directly to the primary organization. Signup and view all the answers

Which of the following correctly describes wholesalers?

They receive goods directly from manufacturers and sell to retailers. Signup and view all the answers

What is the purpose of reverse logistics?

To manage the return of goods from final customers to manufacturers. Signup and view all the answers

Which statement about logistics in a supply chain is accurate?

Logistics plays a key role after procuring raw materials and before distribution. Signup and view all the answers

What distinguishes retail distribution from wholesaling?

Retailers sell to end consumers, while wholesalers sell to retailers. Signup and view all the answers

Which of the following best describes multichannel systems in supply chains?

Offering more than one channel for distribution to customers. Signup and view all the answers

What is a benefit of offshoring for companies?

Lower operational costs Signup and view all the answers

What is the significance of strategic decisions in supply chain management?

They can influence downstream decisions that need to be aligned. Signup and view all the answers

When evaluating supply chain decisions, what levels should be examined for alignment?

Strategic, tactical, and operational levels should all be considered. Signup and view all the answers

Which factor is not considered a risk of outsourcing?

Increased operational control Signup and view all the answers

What is one of the key advantages of nearshoring?

Operations in the same time zone Signup and view all the answers

Which of the following defines reshoring?

Bringing manufacturing operations back to the home country Signup and view all the answers

What is one of the risks associated with offshoring?

Job loss in the home country Signup and view all the answers

Which of the following has been a driver of globalization?

World Trade Organization's trade rules Signup and view all the answers

What is a significant result of globalization for businesses?

The ability to operate anywhere in the world Signup and view all the answers

What is a disadvantage of nearshoring?

Potentially higher costs Signup and view all the answers

Which of the following is NOT a driver of globalization?

Rigid supply chain structures Signup and view all the answers

What could lead to a company's decision to reshore its operations?

Rising labor costs and quality concerns abroad Signup and view all the answers

What has enhanced the interaction between global customers and companies?

The global economy Signup and view all the answers

Which transportation method had the highest speed from 1500 to the 1840s?

Human-powered ships Signup and view all the answers

How did the development of jet aircraft affect globalization?

Increased the speed of global connectivity Signup and view all the answers

Which statement best reflects a result of reliable sources of supply?

It allows businesses to respond quickly to demand changes Signup and view all the answers

What historical transportation method marked the fastest speeds in the period of early 1900s to today?

Propeller airplanes Signup and view all the answers

Why do businesses seek access to the latest trends and technologies in the context of globalization?

To enhance their competitive edge Signup and view all the answers

Which factors are presently affecting global supply chains?

Trade wars between countries Signup and view all the answers

What is one of the key topics covered in the course schedule related to supply chains?

Identifying key drivers impacting global supply chains Signup and view all the answers

During which session is the focus on current challenges supply chains are facing?

Week 3 sessions Signup and view all the answers

What does the PESTLE analysis help understand?

Political and economic factors impacting business Signup and view all the answers

Which session of the course involves a team formation activity?

Week 1 Signup and view all the answers

What aspect of global supply chains is being evaluated through guided coaching?

Status updates of project work Signup and view all the answers

What is emphasized in the session focusing on Mexico's context regarding supply chains?

Industry-level management of supply chains Signup and view all the answers

What is one of the deliverables mentioned for the course?

Project work status updates Signup and view all the answers

What is a current component affecting global supply chains that involves government intervention?

Return of industrial policy Signup and view all the answers

What is one expected outcome from discussing global supply chains in breakout rooms?

Identifying supply chain conflicts Signup and view all the answers

Which country had the highest number of companies listed in the Fortune Global 500?

United States Signup and view all the answers

What was a reported significant change in Mexico's trade partnerships from 2000 to 2020?

Stronger ties with Asian economies Signup and view all the answers

What is one of the key factors that can make a country competitive in the global market?

Access to advanced technologies Signup and view all the answers

Which of the following trends has been observed in the report regarding Mexico as a competitive location?

Increase in manufacturing jobs Signup and view all the answers

What is a primary concern impacting companies' supply chain decisions?

Increased logistics costs Signup and view all the answers

What percentage of assembled parts must originate in member states according to the USMCA/T-Mec Agreement?

75% Signup and view all the answers

What sector has seen significant foreign direct investment (FDI) from 2000 to 2022 in Mexico?

Automotive Signup and view all the answers

Which challenge does Mexico face related to its human resources?

Developing and better remunerating talent Signup and view all the answers

Which of the following is a projected investment amount for EV auto parts in Mexico over the next few years?

$15 billion Signup and view all the answers

What is one significant issue related to infrastructure that Mexico faces?

Energy infrastructure challenges Signup and view all the answers

How much foreign direct investment (FDI) is estimated for Mexico in 2024?

$38 billion Signup and view all the answers

What has been the percentage of new investor companies in FDI in the last four years in Mexico?

7% Signup and view all the answers

What is one main factor affecting operational costs in Mexico?

Security issues Signup and view all the answers

Study Notes

Global Supply Chains

A network of interconnected organizations that aims to create net value through various activities
Value chain: a series of steps where value is added to a product as it progresses through different stages
The COVID-19 pandemic has caused disruptions to supply chains globally

What Is Global Supply Chain Management

A process to efficiently integrate a global network of organizations
It involves dealing with the challenges and deciding on an outsourcing plan
There are various logistical issues to consider
There has been a steady reduction in manufacturing share in Western economies
Western manufacturers have successfully maintained business due to higher productivity
Companies need to make changes to thrive in a highly competitive environment

Global Supply Chain Structures and Partners

First-tier suppliers: provide products directly to the primary organization
Second-tier suppliers: support first-tier suppliers' production processes
Wholesalers and retailers:
- Wholesalers receive goods directly from manufacturers and sell to retailers
- Retailers sell goods to end consumers
Multichannel systems: Offer more than one channel of distribution to customers
Storage: Use of warehouses to store products, components, or materials.

Logistics

Plays a crucial role in procuring raw materials and producing finished goods
Involves multitier suppliers, agents, and agencies
Reverse logistics:
- The movement of goods from the final customer to the distributor or manufacturer

Key Drivers of Supply Chains: Globalization

The global economy leads to direct interaction between global customers and companies
Globalization enables businesses to operate anywhere in the world
Allows businesses of all sizes to meet the needs of global consumers

Phases of Globalization

The death of distance refers to the reduction of travel time and cost due to technological advancements in transportation

Drivers of Globalization

Lower costs and access to global markets
The ability to quickly respond to changes in demand
Reliable sources of supply
Access to the latest trends and technologies

The Globalization of Business

The formation of the European Union led to strict quality and environmental standards for companies
The North American Free Trade Agreement (TMEC/USMCA) established a free-trade zone
The World Trade Organization expanded the scope of international trade rules
Offshoring: A company has full control over operations performed in another country
- Benefits: Lower costs, access to a larger pool of skilled labor, and so on
- Risks: Transfer of jobs to other countries, geopolitical risk, and so on
Nearshoring: A company outsources work to a geographically closer country
- Benefits: Operations in the same time zone, fewer cultural differences, and so on
- Risks: Fewer providers, higher costs, and potential cultural differences
Outsourcing: Hiring a third party on a contractual basis
- Enables a company to focus on core competencies
- Risks: Loss of sensitive information and confidentiality, poor quality, and so on

Reshoring

Reshoring is the process of bringing back a company's manufacturing operations to its home country
Factors responsible for the decline of offshoring include:
- Rising labor costs, quality and intellectual property theft, and long supply chains
The trend of reshoring appears to be greater in the United States

Breakout Room Discussion

Topics to discuss:
- Impact of trade wars on global supply chains
- The return of industrial policy
- Impact of conflicts on global supply chains
- Impact of technological advancements on supply chains

World Economic Outlook in 2050

Mexico is predicted to be the 15th largest economy in the world by 2050.

GDP 2020 Nominal – World Bank

Mexico has a GDP of 1.27 trillion USD (2020)

WEF – Global Competitiveness Report 2019

Mexico ranked 58th in the world for global competitiveness.
Mexico ranked 80th in the world for innovation.
Mexico ranked 65th in the world for business sophistication.
Mexico ranked 62nd in the world for infrastructure.

FORTUNE GLOBAL 500

There are 4 companies headquartered in Mexico on the Fortune Global 500 list.

Main Trade Partners Comparison 2000 x 2020

In 2020, the US accounted for 78% of Mexican exports.
In 2020, the US accounted for 53% of Mexican imports.

What makes a country attractive/competitive?

Institutions and Legislation
Labor – Talent – Knowledge
Location
Resources – natural endowments
Culture – Values
Trade and Investment Agreements
Size of the Domestic Market
Pre-existing Supply Chain

Mexico, the Diamond, Chance and Government

Mexico has a young and growing population, and a rich natural resource base.
Mexico has a strong manufacturing sector and a strategic location close to the United States.
The Mexican government is investing in infrastructure and education.
The Mexican government has implemented various policies to support economic development.

FDI in Mexico – 2000 to 2022

Mexico has accumulated 671 billion USD in FDI.
FDI in 2023 is estimated to be 36 billion USD.
FDI in 2024 is estimated to be 38 billion USD.
Major sectors attracting majority of investment: automotive, metal-mechanic, machinery, medical devices and equipment, domestic appliances, and electronic equipment.

Challenges for Mexico

Diversification of exports
Development coordination
High value-added economic sectors
Energy infrastructure
Water shortages
Housing shortage
Operational costs increased by 2% to 3% due to security issues.
Develop and better remunerate human resources
Corruption
Rule of Law

Mexico Automotive Industry Facts and Trends

Mexico has a large and growing automotive industry.
The USMCA/T-Mec Agreement dictates that 75% of assembled parts must originate in member states.
Investments are expected to reach 15 billion dollars in EV auto parts in the next few years.
EV production increased from 79,471 units in 2022 to 223,640 in 2023.
General Motors, Ford Motor, Stellantis, BMW, KIA, Tesla, Volkswagen, and Nissan are producing EVs in Mexico.

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Description

Explore the intricacies of global supply chains and the management processes involved in integrating various organizations to create value. This quiz covers the impact of challenges like the COVID-19 pandemic and examines supply chain structures. Test your knowledge on how companies adapt in a competitive environment!