What has local Outsourcing
governance decision ad
you should buy?
What has the a middle of Nearshoring
local and global
governance decision and
you should buy?
1. Factory-Gate Price
What are the 5 Hidden 2. Inventory Cost
Costs for the Global 3. Transport Costs
Supply Chain? 4. Risk costs
5. Other Costs
Factory-gate price The unit price per item coming out of the factory
Cost of pipeline inventory, safety stocks, and
Inventory cost
expediting costs
Transport costs Costs of global shipping which can be volatile
all extra costs associated with increased risk of
Risk costs global operations (e.g. stock-out, obsolescence,
loss of IP, corruption)
Other costs Duties, tariffs, travel, insurance, legal, etc.
- Longer performance cycles for international
What is the performance
operations
cycle length for global
- International is measured in weeks or months (e.g.
supply chains?
fashion merch takes 30 to 60 days)
What are reasons for Communication delays, Financing requirements,
longer order cycle to Special packaging requirements, Ocean freight
delivery cycle times? scheduling, Slow transit times, Customs clearance
For global supply chains, Days of Accounts Receivable + Days of Inventory
what is the cash to cash Held - Days of Accounts Payable = Cash-to-Cash
cycle formula? (C2C)
What does duplication of 1. Loss of economies of scale
activities for regional 2. Poor asset utilization
strategies in the global
supply chain lead to?
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