1InternationalLogisticsInternationallogisticsisthedesignandmanagementofasystemthatcontrolstheforwardandreverseflowofmaterials,services,andinformationinto,through,andoutoftheinternationalcorporation.Throughtheimplementationofinternationallogistics,thefirmcanimplementcost-savingprogramssuchasjust-in-time(JIT),electronicdatainterchange(EDI),andsupplierinvolvement.2ThreeConceptsinGlobalLogisticsTotalCostConceptTrade-offConceptSystemsConcept3TheInternationalSupplyChainPhysicalDistributionManagementTransportationCorporationSuppliersCustomersDomestic/ImportSourcing

Domestic/ExportDistributionThroughflowInboundMaterialsOutboundMaterialsForwardandReverseFlowofInformation,Products,andFundsPhysicalDistributionManagement

Transportation

Transportation

TransportationOrderProcessingOrderProcessingOrderProcessingOrderPlacementInventoryManagementMaterialsManagementCustomerServiceStorageStorageStorageInventoryManagementInventoryManagementCostumer-FirmInterfaceSupplier-FirmInterface4Globaldistributionof…Clayfigurine,SpringFestivalpictures,fireddoughtwist,kitesTransportationInventoryPackaging…5DistanceCurrencyvariationBorder-CrossingProcess(additionalintermediaries)TransportationmodesPackagingandLabelingrequirementsInfrastructureDifferencesbetweenDomesticandInternationalLogisticsJohnWiley&Sons,Incc19986ManagingGlobalLogisticsOceanShippingAirFreightIntermodalTransportationWarehousingandInventoryManagementHedgingagainstInflationorExchangeRateFluctuationsBenefitingfromTaxDifferencesLogisticIntegrationandRationalization7TransportationInfrastructureAfirm’slogisticsplatformisdeterminedbyalocation’seaseandconvenienceofmarketreachunderfavorablecostcircumstances.Thepublicsector’sinvestmentpriorities,safetyregulations,taxincentives,andtransportpoliciescanhavemajoreffectsonthelogisticsdecisionsoffirms.Thelogisticsmanagermustlearnaboutexistingandplannedinfrastructuresabroadandathomeandfactorthemintothefirm’sstrategy.8VesselsUsedinOceanShippingLinerServiceBulkServiceTrampService9AirfreightAirfreightisavailabletoandfrommostcountries,includingthedevelopingworld.Internationalairfreightisexpectedtogrowto190billiontonsin2005,comparedtoonly70billiontonsin1995.Fortypercentoftheworld’smanufacturedtravelbyair.Itemsthatarehigh-valueorhighindensitytendtotravelbyair.10ConsiderationsforSelectingaModeofTransportPredictabilityTransitTimeCostNon-economicFactors11ExportDocumentationAbillofladingisacontractbetweentheexporterandthecarrierindicatingthatthecarrierhasacceptedresponsibilityforthegoodsandwillprovidetransportationinreturnforpayment.Acommercialinvoiceisabillforthegoodsstatingbasicinformationaboutthetransaction,includingadescriptionofthemerchandise,totalcostofthegoodssold,addressesoftheshipperandseller,anddeliveryandpaymentterms.Afreightforwarderspecializesinhandlingexportdocumentation.12InternationalInventoryIssuesInventoriestieupamajorportionofcorporatefunds,thereforeproperinventorypoliciesshouldbeamajorconcerntotheinternationallogistician.Just-in-timeinventorypoliciesminimizethevolumeofinventorybymakingitavailableonlywhenneeded.Thepurposeofestablishinginventorysystemsare:tomaintainproductmovementinthedeliverypipelinetohaveacushiontoabsorbdemandfluctuations13ThreeFactorsthatDecidetheLevelofInventoryOrderCycleTimeDesiredCustomerServiceLevelsUseofInventoriesasaStrategicTool14InternationalPackagingIssuesPackagingisinstrumentalingettingthemerchandisetothedestinationinasafe,presentablecondition.Becauseoftheaddedstressofinternationalshipping,packagingthatisadequatefordomesticshippingmaybeinadequateforinternationalshipping.Packagingconsiderationsthatshouldbetakenintoaccountareenvironmentalconditionsandweight.Onesolutiontothepackagingproblemhasbeenthedevelopmentofinter-modalcontainers.Costattentionmustbepaidtointernationalpackaging.15StorageFacilitiesAstationaryperiodisinvolvedwhenmerchandisebecomesinventorystoredinwarehouses.Thelocationdecisionaddresseshowmanydistributioncenterstohaveandwheretolocatethem.Storagefacilitiesabroadcandifferinavailabilityandquality.Thelogisticianshouldanalyzeinternationalproductsalesandthenrankorderproductsaccordingtowarehousingneeds.16SpecialTradeZonesForeigntradezonesareareaswhereforeigngoodsmaybeheldorprocessedandthenre-exportedwithoutincurringduties.Tradezonescanbeusefulastransshipmentpointstoreducelogisticscostandredesignmarketingapproaches.Governmentsandfirmsbenefitfromforeigntradezones.17ExportProcessingZonesandEconomicZonesInexportprocessingzones,specialrulesapplythataredifferentinotherregionsofthecountry.Thesezonesusuallyprovidetax-freeandduty-freetreatmentforproductionfacilitieswhoseoutputisdestinedabroad.Throughthecreationofspecialeconomiczones,theChinesegovernmenthasattractedmanyforeigninvestorsbringinginmillionsofdollars.18OutsourcingLogisticsServicesThesystematicoutsourcingoflogisticscapabilitiesisathirdoption.Bycollaboratingwithtransportationfirms,privatewarehouses,orotherspecialists,corporateresourcescanbeconcentratedonthefirm’scoreproduct.One-stoplogisticsallowsshipperstobuyallthetransportationmodesandfunctionalservicesfromasinglecarrier.19TheSupplyChainandtheInternetBecauseoftheinternet,firmsareabletoconductmanymoreglobalcomparisonsamongsuppliersandselectfromawidervarietyofchoices.Whencustomershavetheabilitytoaccessacompanythroughtheinternet,thecompanymustbepreparedfor24-hourorder-takingandcustomerservice.Forallcountries,butparticularlyindevelopingnations,theissueofuniversalaccesstotheinternetiscrucial.20LogisticsandSecurityAftertheterroristattacksof2001,companieshavetodealwiththefactthatthepaceofinternationaltransactionshassloweddownandthatformerlyroutinestep