international trade, alen delic

7/28/2019 International Trade, Alen Delic

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International Logistics Management


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What is logistics ? SCM , What is the significance and what it

consists of ?

Why do we need to treat the customers well?

Does internationalisation imply a universalglobal approach of the supply chain?

Examples of Supply Chains and how it looks in

KONZUM d.d.


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trade activity has an important role in socialand economic life, as it enables the mostsuccessful association of producers and

consumers. modern trade is an increasingly active role in

the preservation of the value in use and itsfurther adjusting final consumption, increases

the production process and increases the valueof the goods.


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Specifically, about 60 percent of GDP in allcountries of the world goes to personalconsumption and private consumption largely

realized through trade.


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According to Council of logistics management:

Logistics is the process of planning,implementing and controlling the efficient,

effective flow and storage of goods, servicesand related information from point of originto point of consumption for the purpose ofconforming the customer requirement.


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Demand forecasting

Distribution communication

Inventory Control

Plant and Warehouse side selection

Procurement

Packaging

Customers Service

Time & Transportation


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The magnitude of global business are:

Increase in the magnitude global business.

Business are relying on foreign countries to

provide a source of raw materials and marketsfor finished goods.

Fall of global trade barriers.

Increase in Global competition .


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- A supply chain is consists of :

- Aims to match supply and demand,

- achieves (ideal logistics system)

Supplier Manufacturer Distributor Retailer Customer

UpstreamDownstream

SUPPLY SIDE DEMAND SIDE

The right

Product

Higher

ProfitsThe right

TimeThe right

CustomerThe right

QuantityThe right

StoreThe right

Price=++ ++ +


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Improve operations

Increasing levels of outsourcing

Increasing transportation costs

Competitive pressures

Increasing globalization

Increasing importance of e-commerce

Manage inventories


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Customers

Forecasting

Design

Processing

Inventory

Purchasing

Suppliers

Location

Logistics


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Strategic

Tactical

Operational


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Theodore Levitt said people dont buyproducts, they buy benefits

Why do we need to treat the customers well?

They are our bread and butter.

They are the reason for my job.

They are the reason the company exists.


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The whole purpose of supply chainmanagement and logistics is to providecustomers with the level and quality of

service that they require and to do so at lesscost to the total supply chain.

The perfect order is achieved when thecustomers service requirements are met in full.

One measure of the perfect order is on-time,in-full (OTIF).


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The 80/20 rule:

80 per cent of the profits of the business comefrom 20 per cent of the customers.

Furthermore, 80 per cent of the total costs toserve will be generated from 20 per cent of thecustomers (but probably not the same 20 percent!).


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Greet the customer with a smile. Dont use their first name unless asked to. You should sound energetic and confident. Compliment them for any special feature visible i.e a

nice tie, watch, decorated office, nice voice etc. Be a good listener. Make customer feel important and appreciated. Make customer understand your product and system. Be ready to help. Apologize when things go wrong. Give more then expected. Thank the customer for their visit.


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Do you know the inventory your distributioncenters hold?

Do you know the inventory your fellow retailer

holds? Centralised(local) vs internationalisation

Centralised inventories

All inventory is housed in the same way andhandled by the same people and methods oftransportation

lower factory-to-warehouse distribution costs


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Push vs Pull System In Push systems, work release is based on downstream

demand forecasts Keeps inventory to meet actual demand

Acts proactively e.g. Making generic job application resumes today (e.g.: exempli

gratia)

In Pull systems, work release is based on actualdemand or the actual status of the downstream

customers May cause long delivery lead times Acts reactively

e.g. Making a specific resume for a company after talking to therecruiter


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Warehousing stocking locations of finishedgoods until they are sold

Since holding of inventories can cost anywhere

between 30 to 40 percent of their value, theirefficient management is critical in supply chainoperations.


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JIT - A production approach widely followedin the automotive industry (views productionas a system where all operations, including thedelivery of materials needed for production,occur just at the time needed). This effectivelyeliminates the need for material stock.

Reverse logistics deals with the flow of goodsthat go back up the supply chain for a numberof reasons, including: product returns, repairs,maintenance and end-of-life returns forrecycling or dismantling.


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Transportation is one of the most visibleelements of logistics operations.

The role of transport in national economy is

very crucial. Every business firm, regardless ofwhat it produces or distributes, requires themovement of goods from one point to anotherand, therefore, is involved in transportation.


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Air

Truck

Rail

Ship

Pipeline

Electronic


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The make or buy decision?

Benefits vs costs

In-house vs outsource decisions Sourcing is crucial. It affects efficiency

and responsiveness in a supply chain


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The environment in which international logisticiansoperate is quite different from the domestic environment.

The decisions regarding international transportation aremuch more complicated than domestic transportation.

The number of intermediaries involved is greater.

The inherent risks and hazards of internationaltransportation are much more significant.

International insurance is much more complex.

International means of payment are more complicated.

Terms of trade are more complicated.

The crossing of borders represents specific challenges


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KONZUM d.d. performs the wholesale andretail food and non-food products

More than thousand stores in Croatia and

Bosnia and Herzegovina


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Network Delivery value is composed ofcompanies, suppliers, distributors andcustomers who enter into partnerships witheach other to improve the performance of thewhole system.

Power and advantage of Konzum is powerfuldistribution network that is, the dispersion ofthe product.

This means - the task quickly blow up a largenumber of products by truck throughout thecountry.


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His network of stores, Konzum has spread allover Bosnia and Croatia, and operates inapproximately 1000 stores, which are divided

in two formats namely Konzum shops (smallshops), and Konzum hypermarkets (largecenters).


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Konzum currently distributes its goods in twoways: through a central distribution andthrough direct delivery from suppliers.

Direct distribution is the delivery of goods bythe vendor directly to individual storesKonzum.

very intensively used


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Slowely but surely increase usage of thisdistribution in last few years .

CD - done in a way that suppliers of their

goods are transported to the main center,which is done in storage and order picking ofgoods for the way ahead.

Road of goods may continue or transportdirectly to Konzum hypermarkets, and fromthese commodities transported further towardsto smaller formats of Konzum stores.


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warehouse logistics team in Konzum :- Required number of warehouses (almost every

major city has a large warehouse)- The storage location (located in industrial areas of

cities)- Centralization of storage service (one large center

for small shops)- Optimal inventory at some locations (all supplies

needed to power in one city at the same place, andthen distributed from there if needed)

- Storage and order picking systems- The most economical inventory control - ABC

Method


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Supplies in large quantities like truckshipments are done with a larger centralizedwarehouse.

Distribution center is a synonym for the stockwhich is collected, stored and prepared forretail sale in a particular area.


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Many products pass quickly through thedistribution center, and often without exposure tothe shelves.

With logistical standpoint, repackaging is justified,

that is repackaged economically decentralized,because:

- Lower transportation costs for goods in largerquantities

- Lower transport costs of return of empty containers- Freer storerooms stable i.e. empty containers (boxes,

crates) and occupy the same storage area thatholds when it is commodities.


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EDI system ( Electronic surveillance) - usage ofcomputer to connect stores with thedistribution warehouse, a warehouse with

computers of a major suppliers modern storage technologies provide quality

storage at minimal cost (better equipmentincreases the turnover of goods, and the lower

the supply.)


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This system was adjusted and controlled in therange of optimal cooperation betweenmanufacturers and retail merchants

In Konzum they intend to optimize range andoptimize the racks (shelves) and using thismethod are performed:

- Planning and control action sales

- Direct product profitability

- Analysis of consumer baskets


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modern way to manage and control the costsbased on the activities in the process flow ofgoods on sale.

By ABC method and calculations, do notevaluate all activities of the company equally.

based on the fast, accurate and completeresponse to customer requests.


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