The Effect that Globalisation has on Supply Chains (1, 1)

Question 1

What additional risks might arise from sourcing globally?

Answer 1

• Reduced service levels
• Exposure to fuel price volatility
• Increased transit times / longer supply chains

Question 2

What steps might a company take to achieve a global status?

Answer 2

• Core strategic focus (exists for the business)
• Internationalise (core focus extended to international)
• Worldwide structure (country specific strategies develop)
• Global strategy (connected country strategies connected into a global)

Question 3

What is the difference between global sourcing and international procurement?

Answer 3

Global sourcing is strategic and is about setting up a global supply network to meet organisational global needs. International procurement is about importing.

Question 4

Typically an organisation will source locally. Then they will consider two things which will inspire global sourcing, what are they?

Answer 4

Risk vs Reward

Question 5

What additional challenges might a company encounter with logistics when sourcing globally?

Answer 5

Wide supplier network
Law
Finance
Culture, customs and practice
Formalities
Insurance

Question 6

What macro environmental factors will impact global supply chains?

Answer 6

S - Social
T - Technological
E - Environmental
E - Economic
P - Political
L - Legal
E - Ethical

Question 7

Ethics is increasingly important with global sourcing to ensure human rights are observed, children are not used for labour, bribery isn’t used and suppliers are treated fairly. What can a procurement team do to ensure ethical supply chains?

Answer 7

Develop standards and procedures
Supplier selection
Measures
Ethical monitoring

Question 8

What tools can be used to identify supply chain vulnerabilities?

Answer 8

SWOT analysis
Porters five forces
Supply chain analysis
Value chain analysis
Risk impact

Question 9

What are porters 5 forces?

Answer 9

Supplier Power
Buyer Power
Threat of new entrants
Threat of substitutes
Competition

Question 10

What can a buyer do to help reduce the risks of supply chain vulnerability?

Answer 10

• Write good specifications
• Set up contracts correctly
• Undertake effective supplier selection
• Implement supplier performance
• Relationship management