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Global Supply Chain Management
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Table of Contents

Preface ix

Chapter 1
Global Strategy and Global Supply Chain Management 1
Welcome to the Intriguing World of Global Supply Chain Management 1
Global Trade and Global Supply Chains 5
Emerging Markets and Global Supply Chains 8
Global Strategic Supply Chain Management 13
Global Location of Value-Added Activities 16
Important Definitions and Distinctions 21
Integration of Global Supply Chain Functions 24
How Global Supply Chain Management Achieves Benefits 27
Supply Chain Management Integrating Processes 30

Chapter 2
Industry Implications for Global Supply Chains 33
Diagnosing Industry Globalization Potential 33
Understanding Market Globalization Drivers 37
Market Globalization Drivers' Implications for Supply Chains 38
Understanding Cost Globalization Drivers 44
Cost Globalization Drivers' Implications for Supply Chains 45
Understanding Government Globalization Drivers 51
Government Globalization Drivers' Implications for Supply Chains 52
Understanding Competitive Globalization Drivers 58
Competitive Globalization Drivers' Implications for Supply Chains 59
Guidelines for Diagnosing Industry Globalization Potential 64
Appendix: Measures of Industry Globalization Drivers 66

CHAPTER3
Global Supply Chain Infrastructure 69
Basic Worldwide Infrastructure Issues 69
Transportation, Communication, Utilities, and Technology Infrastructure 73
Supply Chain Security, Risks, and Value 81
Legal Considerations, International Contracts, and Insurance 89
Commercial Documents and Customs Clearance 93
Terms of Payment and Currency of Payment 96
International Commerce Terms (Incoterms) 97
World Customs Organization and the Harmonized System 100
globalEDGE (TM): Your Source for Global Business Knowledge 103
Guidelines for Assessing Global Supply Chain Infrastructure 107
Appendix: Logistics Performance Index 2012 109

CHAPTER4
Logistics in Global Supply Chains 111
Global Logistics Strategy 111
Global Distribution Centers 115
Global Inventory Management 120
Global Packaging and Materials Handling 123
Transportation 126
Reverse Logistics 136
Guidelines for Logistics in Global Supply Chains 138

CHAPTER5
Purchasing in Global Supply Chains 141
Global Purchasing Strategy 141
From Domestic to International to Global Purchasing 145
Types of Purchasing Strategy 150
Outsourcing, Offshoring, and Their Derivatives 152
Global Customers and Channels 153
Order Fulfillment and Delivery 155
Global Supplier Selection 158
Global Supplier Networks 164
Critical Success Factors for Purchasing in Global Supply Chains 165
Guidelines for Purchasing in Global Supply Chains 167

CHAPTER6
Operations in Global Supply Chains 169
Global Operations Strategy 169
Make-or-Buy Decisions in Global Supply Chains 173
Global Production and Manufacturing 178
Competitive Priorities in Global Supply Chains 180
Total Cost Analysis in Global Supply Chains 183
Process-Based Quality Standards 185
Supply Chain Operations Reference Model 188
1PL/2PL/3PL/4PL/5PL 190
Guidelines for Operations in Global Supply Chains 191

CHAPTER 7
Market Channels in Global Supply Chains 195
Global Market Channels Strategy 195
Customer Value-Creating Global Processes 198
International Market Entry Modes 202
International Wholesaling, Retailing, and Franchising 204
Exporting and Importing 208
Going Global Online 212
Place and the Other Three Ps 215
globalEDGE Diagnostic Tools and Market Potential Index (MPI) 217
Guidelines for Market Channels in Global Supply Chains 219

CHAPTER8
Managing Global Supply Chains 223
Value of Managing the Location of Global Activities 223
Importance of Coordination in Global Supply Chains 228
Coordination Mechanisms in Global Supply Chains 230
Interorganizational Relationships in Global Supply Chains 232
Value Propositions in Global Supply Chain Relationships 233
Stakeholders and Global Supply Chain Sustainability 236
Guidelines for Managing Global Supply Chains 238
Wrap-Up of the Intriguing World of Global Supply Chain Management 241

Notes 243
Index 249
Contents vii

About the Author

G. Tomas M. Hult is the John W. Byington Endowed Chair, professor of marketing and international business, and director of the International Business Center in the Eli Broad College of Business at Michigan State University. The Broad College has a Center for International Business Education and Research (CIBER), one of only 17 funded by the U.S. Department of Education, and is consistently ranked as a Top-25 business school. Learn more about Professor Hult at broad.msu.edu/facultystaff/hult A native of Sweden, Professor Hult received a mechanical engineer degree in Sweden before obtaining a PhD at The University of Memphis. In addition to Michigan State University, he has served on the faculties of Florida State University and the University of Arkansas at Little Rock. Dr. Hult holds visiting professorships in the International Business group of his native Uppsala University, Sweden (since 2013) and the International Business division of Leeds University, UK (since 2010). Michigan State, Uppsala, and Leeds are all ranked in the top 10 in the world in international business research. Several studies have ranked Professor Hult as one of the most cited scholars in the world in business and management. He served as editor of Journal of the Academy of Marketing Science, a Financial Times Top-50 business journal, and has published more than 70 articles in premier business journals, including Journal of International Business Studies, Academy of Management Journal, Strategic Management Journal, Journal of Management, Journal of Marketing, Journal of the Academy of Marketing Science, Journal of Retailing, Journal of Operations Management, Decision Sciences, and IEEE. He has also published several textbooks including International Business (McGraw-Hill) and Global Business Today (McGraw-Hill). Dr. Hult's other books include Second Shift: The Inside Story of the Keep GM Movement, Global Supply Chain Management, Total Global Strategy, and Extending the Supply Chain. He is a regular contributor of op-ed and articles in the popular press (e.g., Time, Fortune, World Economic Forum, The Conversation). Professor Hult is a well-known keynote speaker on international business, international marketing, global supply chain management, global strategy, and marketing strategy. He teaches in doctoral, master's, and undergraduate programs at Michigan State University. He also teaches frequently in executive development programs and has developed a large clientele of the world's top multinational corporations (e.g., ABB, Albertsons, Avon, BG, Bechtel, Bosch, BP, Defense Logistics Agency, Domino's, FedEx, Ford, FreshDirect, General Motors, GroceryGateway, HSBC, IBM, Michigan Economic Development Corporation, Masco, NASA, Raytheon, Shell, Siemens, State Farm, Steelcase, Tech Data, and Xerox). Tomas Hult is an elected Fellow of the Academy of International Business (AIB), one of only about 90 scholars worldwide receiving this honor, and serves as the executive director and foundation president of AIB. He also serves on the U.S. District Export Council and holds board member positions on the International Trade Center of Mid-Michigan and the Sheth Foundation. Tomas enjoys tennis, golf, and traveling as his favorite recreational activities. Professor of Marketing and Logistics at Michigan State University. He received his Ph.D. in marketing and logistics from Michigan State. Dr/ Closs is the author or coauthor of many publication in journals and proceedings, System Editors of the Journal of Business Logistics, and coauthor of Simulated Product Sales Forecasting.

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