Week 1 Module Overview PDF

WEEK 1 MODULE OVERVIEW Prof. Jeong Hugh HAN Lecture Outline Professor Module aim Textbook Lecturing Exams & Grading Class activity - narrations Professor Prof. Jeong Hugh HAN at Department of Int’l Business & Trade Contact: [email protected] http://trade.khu.ac.kr/trade/index.php?mid=professor&documen...

WEEK 1 MODULE OVERVIEW Prof. Jeong Hugh HAN Lecture Outline Professor Module aim Textbook Lecturing Exams & Grading Class activity - narrations Professor Prof. Jeong Hugh HAN at Department of Int’l Business & Trade Contact: [email protected] http://trade.khu.ac.kr/trade/index.php?mid=professor&document_srl=204 https://scholar.google.com/citations?user=aPufguIAAAAJ&hl=ko has received PhD from Cardiff University(UK, full scholarship) has served Cardiff University (Research Associate) has served Inha university (Assistant professor, Asia Pacific School of Logistics) Associate editor of Journal of International logistics and trade Research interests – Global logistics and SCM, Innovation in SCM Objectives of this module This module consists of two parts: 1) Global logistics (app 40%); 2) global supply chain management theories (app 60%). The philosophy of international logistics and its important elements will be thought in light of supply chain management approaches. Topics will cover international logistics issues and practice, warehousing, inventory control, purchasing and location analysis, risk management, supply chain strategies, etc. Textbook International Logistics: The Management of International Trade Operations by Pierre David, 2021, Cicero Books Managing Operations Across the Supply Chain by Swink et al.. 2024, Mcgraw-hill A summarized version (the short version) of the text book in the form of PDF format will be provided via LMS in advance Handouts in short (PPT style) and an extended version (PDF) will be circulated in advance It will be helpful if you read the relevant chapters (PDF) that are summarized in PPT formats. Lecturing This module will be dedicated to the context of practices (International logistics) and theories (global supply chain management) Prof. HAN will use English Prof. HAN will try to use simple and straightforward explanations & expressions Key concepts and important notifications will be delivered in both English and Korean Lecturing Your language is both of the two. You can use both English and Korean No penalty in using Korean in any situations You can answer your exam questions in both English and Korean However the exam will be strcutured with English Will use e-campus for the supplementary cases and ideas I count attitude to your grade. Please respect every participants in this class Only beverages (coffee, water) are allowed during the lectures Food and others will invite you automatic penalties to your grade Exams & Grading Multiple choice questions / Short answer questions / (and / or) Essay style questions in English The outlines of the exam will be clarified before the exam dates (a week or two ahead) Exam questions will be limited to the context you learned from the lecture Broad and integrative view on the teaching materials will be helpful to your good grade Exams & Grading Attendance will be worth 5 credits out of 100. Midterm (8th week) and final exam (16th week) worth 45 credits and 50 credits, respectively. Absolute evaluation (grading method) will be used for your grade. Rules and thumbs Absence more than 25% of the semester = automatic F 1 absence means minus 1 credit out of 5 Being late to class (more than 5 mins) 3 times = 1 absence No mid term exam participation or No end term exam participation = automatic F (regardless of your performance in the exam) Any cheating attempt (or suspicious action) during the exams = automatic F (regardless of your performance in the exam) There will be no notice for the automatic F as it is an automatic one. Class activity - narration At any given moment, tens of thousands of giant cargo ships are moving around the world's oceans. These ships, some of which are more than a quarter of a mile long, are the heavy lifters of the global economy, shifting everything from metal ores and compressed gas to fresh fruit and plastic toys. This interactive map shows the movements of the world commercial shipping fleet in 2012, based on hundreds of millions of individually recorded positions. Plotting all the raw positions at once shows an extraordinary extent of shipping’s reach. Even without a background map, the world's coastlines are clearly defined – albeit with plenty of variation, from a buzz of activity in the East China sea to the relative quiet of the Somalia's piracy afflicted waters Class activity - narration While ships can move freely through the open ocean, routes are predetermined closer to land and especially in tight straits such as the dual carriageway of the English channel. The most crucial shipping thoroughfare of all, though, are the man-made canal linking different bodies of water – such as the Panama Canal, opened a century ago to connect the Atantic and Pacific ccean and the even older and busier Suez canal, which saw 17,000 transit in 2012 alone. In some places, ships penetrate deep into continents via rivers and lakes – such as the massive Paraguay and Amazon rivers in South america or the Great lakes in North america, whose ports include Chicago, Milwakee and Toronto. Coloring the ships by category shows the flows of the global economy in more detail. Class activity - narration The red dots are the tankers, which shut oil from massive terminals in the Middle East, or from off-shore rigs in West Africa and elsewhere. While the blue dots are called dry bulk ships moving aggregates, ores and coal from mines and quarries, many of which are found of Australia and Latin America. Many of these raw materials are shipped to manufacturing regions to make finished goods that are themselves then moved back across the oceans in containers ships shows here in yellow. China is the center of the container shipping world; Shanghai alone moved 33 million units in 2012. Class activity - narration While all this shipping makes modern life as we know it possible, there is a down side. Moving billions of tones of ships and cargo relies on burning massive quantities of bunker fuel. The result is a huge amount of carbon dioxide or CO2 – the main driver of global warming. Commercial ships produce more than a million tones of CO2 every day – more than whole of the UK, or Canada, or Brazil. WEEK 1 INTERNATIONAL TRADE International Trade Growth International Trade Milestones Largest Exporting and Importing Countries International Trade Drivers International Trade Theories International Business Environment International Trade Growth Since World War II, global trade has skyrocketed, bringing economic prosperity to many nations. Countries that once struggled to feed their people have now become economic powerhouses, providing a modern standard of living for their citizens. The significant boost in international trade began when countries realized that trading with each other benefits their economies and improves the well-being of people worldwide. From 1953 to 2019, international trade has grown a staggering 2,858 percent. In 2019, it was 29.6 times larger than in 1953, showing an average annual growth rate of 4.96 percent. International Trade Growth International Trade Growth 1953-2019 (in 2019 constant dollars). Source: World Trade Organization International Trade Growth The increase in international trade over the last six and a half decades was triggered by a massive liberalization of international trade. It was also enabled by the creation of a number of international organizations designed to facilitate international commerce, and a significant decrease in transportation costs and transit times. During this period, a greater consumer acceptance of things “foreign,” from food to automobiles, allowed an increasing number of companies to expand sales beyond their domestic borders. Major Exporting Countries Major Exporting Countries (2019) Source: World Trade Organization Major Importing Countries Major Importing Countries (2019) Source: World Trade Organization International Trade Theories- historical mistakes The expansion of voluntary trade between nations has been a defining characteristic of the global economic system since the second World War. But peoples’ view on trade were not always so liberal. "government of the people, by the people, for the people, shall not perish from the earth“ The Gettysburg Address, 1863 Abraham Lincoln 1809-1865 International Trade Theories- historical mistakes President Lincoln once argued that… “To me that if we buy the rails from England, then we've got the rails and they've got the money. But if we build the rails here, we've got our rails and we've got our money.“ International Trade Milestones Treaty of Rome (1957) creates the European Union 1958: Belgium, France, Germany, Italy, Luxembourg, the Netherlands 1973: United Kingdom, Ireland, Denmark 1981: Greece 1986: Spain and Portugal 1995: Austria, Finland, Sweden 1999: Creation of the euro 2002: The euro becomes the currency of twelve countries 2004: Cyprus, Czech Republic, Estonia, Hungary, Latvia, Lithuania, Malta, Poland, Slovakia, Slovenia 2007: Bulgaria, Romania 2013: Croatia 2020: United Kingdom “Brexit” 2021: The euro is the currency of 19 countries International Trade Milestones Progressive steps in the creation of trade blocs Free-Trade Agreement Elimination of tariffs between group members North American Free- Trade Area (NAFTA), Trans-Pacific Partnership (TPP) Customs Union Common tariff structure for all group members Central American Integration System (SICA), Central American Common Market Free circulation of goods and persons between group members Asian Nations (ASEAN), Eurasian Economic Union (EEU) Economic Union Common economic and monetary policies among group members European Union Political Union Common government European Union International Trade Drivers Cost Drivers Companies increase their sales worldwide to recover their high investment costs. Companies in industries with high fixed costs try to spread these costs over many units, and therefore seek sales outside of their home markets. Automobile companies were among the first to seek sales abroad: Automobile production was dominated by 20 companies in 2017 (87 percent of all automobiles worldwide) Automobile production was concentrated in 15 countries in 2019 (87 percent of worldwide production) Yet, automobiles are sold worldwide. International Trade Drivers International Trade Drivers Competition Drivers Companies enter foreign markets to keep up with their competitors, retaliate against them, or enter a market first Companies that see themselves as global players seek to counter their competitors’ international moves in order to retain global market share. Every move by one of the players is met with some retaliatory measure: When Benetton—an Italian company—, entered the U.S. market, The Gap—an American company—, retaliated by entering the Italian market. When Carrefour—a French retailer—enters a market, Walmart enters another. And when Walmart enters a market, Carrefour does as well. International Trade Drivers International Trade Drivers Market Drivers Companies enter foreign markets because their customers expect them to be present in those countries. Companies in industries where customers travel will follow these customers internationally: Hotel chains were first to offer a standardized experience worldwide. Fast-food restaurants followed their customers abroad (McDonald’s first foreign ventures followed U.S. military personnel in Germany and Japan). International Trade Drivers Technology Drivers Companies enter foreign markets because their customers use technology to make purchases from these markets. Buyers and sellers are increasingly technologically savvy and purchase goods from all over the world. The internet makes this process very simple: Paypal can be used to make and receive payments in 53 countries and can be used to make payments in 84 countries. eBay's “international shipping program” allows sellers to ship to 94 countries. Shutterstock has contributors in 150 countries. Apple’s “App Store” is present in 175 countries. Global logistics/SCM professionals Global logistics/SCM professionals have been the main facilitators of international- trade growth. How? They have been the managers responsible for the safe and timely deliveries of these billions of dollars of goods. Such as arranging the transportation of goods over thousands of miles understanding the trade-offs between the different modes of transportation choosing the right carrier determining through which ports and terminals the goods will transit making sure that the goods are packaged properly for their journey understanding the risks the goods face while in transit, and insuring against these risks appropriately These are the example of the contents we will explore on this semester.