1.0 Understand the strategic logistical implications globalisation

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Global Logistics Strategy 


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Module purpose
On completion of this module, learners will be able to assess the strategic logistical implications of globalisation and evaluate global governance of the supply chain and the concept of reverse logistics.

Module aim(s)
Globalisation generates significant opportunities as well as increased risks for organisations. This means that global logistics strategy, the flow of resources and information between a business or source and the consumer is regarded as a key element of organizational success. Personnel responsible for leading and developing global logistics strategy are seen as significant contributors to competitive advantage and overall business success. This module is designed for procurement and supply leaders who are responsible for global logistics strategy and who require knowledge and understanding of the associated challenges, governance and requirements for successful strategic implementation.

Learning outcomes, assessment criteria and indicative content

1.0 Understand the strategic logistical implications globalisation

2.0 Understand global governance of the supply chain

3.0 Understand the concept of reverse logistics and its impact on global logistics strategy

1.1 Evaluate the logistics challenges that globalization presents
• Consequences for inventory handling and transport such as:
• Centralised vs. regionalised inventory holdings
• International logistics practices – storage and handling practices
• Extended transportation pipelines and time to market - obsolesce and inventory holding costs
• Global consolidation
• Economies of scale and batching
• Price and currency fluctuation
• Multiple freight modes and cost
• Location analysis
• Trade-offs between responsiveness to local markets and economies of scale

1.2 Assess the structure of a global strategic logistics and supply chain network
• Layering and tiering
• Information flow and coordination
• 3 and 4PL
• Influence of Original Equipment Manufacturers (OEM)
• Time horizons – preparation, finalisation, shipment and delivery
• Individual plants
• Changing role of distribution centres
• Flexibility to respond to local markets
• Response to governmental incentives – adjusting taxes, incentives and infrastructure to favour selection
• Reconfiguration processes
• Changing the global pipeline
• Local vs. global postponed manufacturing

1.3 Assess the strategic logistical risks of globalisation and the associated responses
• Supply chain volatility:
• Geopolitical threats
• Transportation and/or pipeline breakdowns
• Security threats
• Responses such as:
• Inventory policies and levels
• Transport network redesign
• Sole vs. global trading arrangements
• Contingency planning and risk protocols

2.1 Contrast the strategic influences on globalised supply chain governance
• Geographical spread and supply chain/network complexity
• Coordination between units and elements of the supply chain/network
• Embedded teams vs. virtual centralisation
• ‘Decentralised centralisation’ - central reporting and working but not centrally co-located
• Incorporating new regions into global governance
• The flow of goods vs. the flow of ownership

2.2 Assess the impact of international legislation on the globalised supply chain
• The role of international courts in deciding precedence
• Which legal system is generally accepted by all parties – multiple countries passed through during the course of the trade
• Which court has jurisdiction over form of contract, disputes, underperformance etc. – exporter, importer or third country
• Legal considerations in global markets, shipment, insurance, handling, clearance, payment and other related matters

3.1 Assess the concept and requirements of reverse logistics
• What is reverse logistics
• Waste reduction
• Point of consumption back to point of origin
• Why is the concept becoming more influential:
• Product returns
• Repairs and maintenance
• Reuse
• End of life returns and recycling or dismantling

3.2 Assess the strategic factors which influence reverse logistics
• Government policy and legislation
• Economic considerations
• Increasing landfill costs
• Increasing cost of disposal vs. profit from recoverable manufacturing
• Environmental considerations
• Triple bottom line and sustainability
• Corporate Social Responsibility
• Green logistics
• Buying sets of services
• E.g., include maintenance contract covering repairs and parts – return of broken products and take back at life-end

3.3 Contrast factors that influence strategic reverse logistics
• External factors such as:
• Legislation
• Customer demand
• Incentives
• Internal factors such as:
• Environmental concerns
• Strategic cost/benefits
• Volume and quality returns
• Resource
• Integration and coordination

3.4 Compare factors which affect the implementation of reverse logistics strategy
• No infrastructure and insufficient resources
• Difficult to forecast flow and composition
• Not a priority
• Driven by legislation and not identified business value
• Regarded as an additional cost
• Unpopular as regarded as a sign of failure

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