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Global Logistics for Dummies


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Table of Contents

Introduction 1 About This Book 1 Foolish Assumptions 2 Icons Used in This Book 2 Beyond the Book 3 Where to Go from Here 3 Part 1: Taking Your First Global Steps 5 Chapter 1: Getting Started in Global Logistics 7 Understanding the Evolution of Global Logistics 8 Introducing SOLE - The International Society of Logistics 9 Getting Started: Some Basic Logistics Concepts 10 Deconflicting Some Unique Language of Global Logistics 14 Identifying the Need for This Global Logistics Discussion 15 Chapter 2: Understanding the Role of Logistics in Global Manufacturing and Sales 17 Manufacturing in a Foreign Location 18 Dealing with Foreign Distribution Chains 19 Anticipating the Impact of Geo-Politics and Social Change 21 Adapting to the Logistics of Global Internet Sales 22 Chapter 3: Providing Global Logistics Services 25 Defining Logistics Services and Logistics Service Providers 26 Providing Global Logistics Services 28 Culture, Culture, Culture 29 Working for Government Clients 29 Chapter 4: Supporting Global Humanitarian and Disaster Relief Efforts 31 Directing and Managing International Disaster Relief Efforts 33 Organizing for H&DR Logistics Support 34 Providing Logistics Support to H&DR Events: Dangerous but Rewarding 35 Part 2: Manufacturing in a Global Environment 37 Chapter 5: Making Your Product and Establishing Your Global Supply Chain 39 Establishing Your Presence 39 Keeping your corporate business model in mind 41 Developing a realistic foreign manufacturing strategy 42 Creating partnerships to support your manufacturing effort 43 Testing the waters: Starting small 44 Deciding How to Support 45 Assessing internal versus external logistics support 45 Establishing in-country manufacturing and supply chains 47 Making sure your decision supports the larger corporate goals 48 Managing Your Global Logistics Operation 50 Integrating domestic and foreign logistics elements and practices 51 Adjusting logistics operations to national and regional requirements 51 Leveraging foreign logistics service provider capabilities 52 Chapter 6: Stocking and Distributing Your Products 53 Building and Managing Your Inventory 53 Establishing and maintaining the proper inventory 54 Deciding how much inventory to stock 55 Managing stock-out risks 56 Warehousing and Distributing 56 Identifying your warehousing and distribution locations 56 Setting up your storage facilities for maximum efficiency 57 Creating an efficient distribution flow 58 Shipping and Receiving: From Beginning to End 59 Getting your raw materials to your manufacturing location 59 Moving your materials and products along the manufacturing line 60 Shipping your product back home from your foreign location 60 Dealing with your foreign-manufactured product returns: How far back? 61 Chapter 7: "Greening" Your Manufacturing Line 63 Safeguarding the Environment 64 Starting out 64 Demonstrating corporate social responsibility 65 Minimizing local environmental impacts 65 Creating the initiative of shared prosperity: Everyone wins 67 Growing a Green Operation 67 Developing a culture of environmental stewardship 68 Establishing goals and priorities for logistics processes 68 Embedding "green" into the manufacturing line 69 Applying Green Logistics Best Practices 70 Getting all the links in your global logistics chain working together 71 Minimizing your carbon footprint 74 Reducing, reusing, and recycling from within 75 Chapter 8: Keeping Everything Running Smoothly 77 Maintaining the Line 77 Establishing your level of foreign operational readiness 78 Knowing what and when to measure 79 Developing preventive maintenance schedules 80 Adjusting for unscheduled failures and equipment downtime 80 Implementing Tools and Metrics 81 Deciding what logistics indicators to measure 81 Stocking your logistics toolbox with metrics 82 Developing integrated logistics formulas and strategies for success 83 Managing Risks and Crisis 84 Reducing the risk of failures and stoppages 84 Reporting progress against logistics metrics and goals 85 Adjusting the processes to restore the line 85 Closing the circle: Precluding future failures 86 Establishing a Production Continuity of Operations Plan (Production COOP) 87 Identifying critical logistics functions and personnel 87 Developing corporate policies and plans to respond to production disasters 88 Implementing your production COOP 89 Chapter 9: Protecting Your Designs and Data 91 Developing Your Supply Chain Risk Management Plan 92 Identifying risk throughout the supply chain 92 Prioritizing internal and external supply chain risk 93 Mitigating the effects of supply chain risk on operations 94 Safeguarding Your Intellectual Property 94 Protecting designs and processes 95 Determining how to acquire foreign intellectual property protections and rights 96 Protecting other trade secrets 97 Fighting Industrial Espionage 97 Recognizing industrial espionage 98 Building your manufacturing and data firewalls 99 Embedding safeguards into your production and support lines 99 Testing your safeguards: Performing and responding to IP security audits 100 Preventing and Recovering from Logistics Data Disasters 102 Identifying critical logistics automated systems and data 102 Preparing for logistics data disasters 104 Establishing a response and recovery plan for logistics data breaches and compromises 105 Identifying the breach: When, what, and how bad? 106 Establishing continuity of operations and effecting recovery as quickly as possible 107 Part 3: Selling What You've Already Made 109 Chapter 10: Moving It from "Here" to "There" 111 Choosing Your Transportation Modes 111 Shipping by land, sea, and air - the pieces and parts 112 Deciding which mode is right for which product 115 Achieving efficiency through speed and flexibility 118 Establishing, Managing, and Maintaining Your Own Fleet 118 Deciding whether to own or lease 119 Managing fleet maintenance to avoid delays 120 Establishing the optimum transportation footprint 121 Modernizing the fleet: Both hardware and software 122 Using Freight Forwarders 123 Using experts to ship internationally 123 Dealing with customs, taxes, and tariffs 124 Accommodating and managing the exceptional shipment 124 Handling the exceptions, hiccoughs, and delays 126 Planning for what could - and does - go wrong 126 Embedding agility and flexibility to keep moving 127 Getting it to the right place for the right cost 128 Chapter 11: Keeping Everything Secure 129 Identifying Potential Distribution Chain Threats 129 Planning for natural and man-made breaks in the distribution chain 130 Identifying the weakest links in the chain 131 Safeguarding the bottom line from distribution chain failures 132 Combating Piracy: On and Off the Seas 132 Understanding the cause and avoiding the risks 133 Protecting everyone's investment 134 Planning for and recovering from acts of piracy 135 Screening Cargo: Both Coming and Going 135 Sharing the load: Your role in screening 135 Building and costing delay in the distribution schedule 136 Dealing with quarantines or impoundment 137 Dealing with Dunnage, Demurrage, and Damage 138 Controlling loss and damage in shipment 138 Minimizing the impact of shipment loss and damage 139 Chapter 12: Making the Sale 141 Identifying and Establishing Your Points of Sale 141 Leveraging logistics to enhance your marketing strategy 142 Adapting your product and packaging to satisfy customer needs 143 Working with national and regional agencies to establish your territories 144 Building a Winning Strategy 145 Growing a customer base for your product 145 Using local distributors to manage your sales 146 Setting realistic distribution metrics 147 "Capturing" the Sale 148 Designing and managing a global "point-of-sale" strategy 148 Getting and keeping customer loyalty through logistics 149 Supporting and Educating Your Customers 150 Creating a logistics support network 150 Leveraging logistics to keep customers informed 151 Chapter 13: Dealing with Losses, Theft, Damages, and Returns 153 Minimizing the Risk at the Point of Sale 154 Identifying what can go wrong and where 154 Developing secure storage, shipping, and handling policies 156 Recovering from the Damage or Loss 157 Getting a replacement in the customer's hands 157 Modifying the process to prevent future occurrences 158 Accepting Damages and Returns: Taking It All Back 159 Reversing the logistics chain 160 The impact of counterfeit goods on your company and the global economy 161 Part 4: Providing Logistics Services to Global Customers 163 Chapter 14: Understanding and Accommodating Cultural Differences 165 Confronting Cultural and Language Barriers 166 Anticipating and adjusting to language issues 166 Building respect and relationships 167 Adjusting to the role of religion in business 168 Understanding the Corporate Climate 169 Identifying the impact of your goals and objectives 169 Dealing with global versus local company perceptions 170 Adjusting and Responding to Social and Political Uncertainty 171 Accepting the impact of political uncertainty in developed countries 172 Dealing with social or political upheaval 172 Anticipating the near future 175 Chapter 15: Identifying Insurance and License Requirements 177 Identifying the Ground Rules 177 Determining the types of insurance required 178 Knowing when your standard insurance may not be sufficient 180 Identifying national and local license and permit requirements 181 Indemnifying and Protecting Your Operations 182 Establishing your intellectual property rights protection plan 183 Protecting and enforcing your methods and operating procedures 185 Getting and Keeping Your Permits and Licenses 185 Working with national and regional agencies 186 Using sponsor companies 187 Keeping up-to-date with change 188 Chapter 16: Deciding on Your Source of Manpower 189 Identifying Your Labor Pool: Internal versus External 190 Understanding the labor pool options 190 Using your own workforce 191 Hiring independent contractors 192 Understanding the Difference between Expatriates, Local Nationals, and Third-Country Nationals 193 Hiring expatriates 193 Hiring local nationals 195 Determining when third-country national hiring is the solution 195 Managing and Retaining Your Foreign Employees 196 Chapter 17: Understanding Foreign Labor Laws and Requirements 199 Integrating Labor Laws into Work Schedules 200 Complying with requirements for work hours, overtime, and vacation time 200 Understanding work location restrictions 203 Accommodating Religious Requirements 203 Accommodating national and religious holidays 204 Understanding and dealing with other religious requirements 205 Understanding the Special Provisions for Employing Women and Children 206 Employing female workers 207 Employing minors 208 Addressing special provisions before they become a problem 208 Compensating Your Workforce 209 Compensating for hours worked - and not worked 209 Adjusting compensation for location and risk 211 Part 5: Being Part of a Global Humanitarian & Disaster Relief Logistics Team 213 Chapter 18: Understanding Global Humanitarian and Disaster Relief Logistics 215 Defining the Scope of Humanitarian and Disaster Relief 216 Before the affected country calls for international help 218 Transition to full international community H&DR support 218 The importance of H&DR logistics 219 Introducing the H&DR Logistics Delivery Framework 220 Assessment and planning: The framework foundation 221 The role of the United Nations and its components 221 Knowing and Understanding the H&DR Logistics Team 225 Identifying the Phases of Operational Response 226 Chapter 19: Defining Your H&DR Logistics Role 229 Making the Corporate Commitment 230 Deciding What H&DR Logistics Support to Provide 232 Providing cash or material donations 232 Providing relief services in the affected country 234 Achieving recognition by the international H&DR framework 235 Preparing Your Team: Establishing Internal Systems and Protocols 236 Adopting H&DR logistics management systems and controls 236 Developing H&DR logistics operational policies and procedures 237 Recruiting, training, and equipping the team 237 Supporting the families of your H&DR logistics team 238 Responding to the Call for Logistics Support 239 Assessing your company's ability to respond 239 Activating the H&DR Logistics Team 240 Chapter 20: Operating as Part of the H&DR Logistics Team 243 Deploying Your Humanitarian & Disaster Relief (H&DR) Logistics Team 243 Updating your mission assignment and equipment list 244 Getting personnel and equipment to the scene 245 Preparing for logistics relief efforts 246 Setting up team operations 247 Conducting H&DR Logistics Operations 249 Understanding the logistics of cluster CONOPS 249 Operating in different relief team structures 250 Participating in on-site briefings and reports 253 Managing the team's internal logistics 255 Closing out the Team's Mission: Reporting Out and Returning Home 257 Returning versus discarding assets 259 Improving your H&DR program: Lessons learned 260 Addressing the challenges of returning home 261 Getting ready for the next deployment: Training and exercising 262 Part 6: The Part of Tens 263 Chapter 21: Ten "Stars" of Global Logistics 265 Amazon.com: Leveraging E-Commerce to Support a Global Logistics Enterprise 265 Coca-Cola: Investing in Product Sustainment in Foreign Communities 267 Dell: Moving Manufacturing to Capture Global Demand 267 International Federation of Red Cross & Red Crescent Societies: Disaster Relief 269 International Flavors & Fragrances: Integrating Multiple Supply Chains 269 Mali: Revolutionizing the Logistics of Exporting Agricultural Products 270 McDonald's and Starbucks: Adapting to Local Customs, Traditions, and Tastes 271 Toyota: Streamlining the Global Management of Inventory 272 Volvo: Designing the Environment into Product Engineering 273 Walmart: Pioneering the Commercial Use of RFID 273 Chapter 22: Ten Examples of Global Logistics Gone Wrong 275 Best Buy Europe: Underestimating Cultural Differences in Technology Purchasing 276 Boise Cascade: Undone by Local Politics 276 British Petroleum: Inadequate Global Operating Standards 277 Ford Motor Company: Operational Mismatches 277 Home Depot: Missing the Cultural Mark 278 Korean Airlines: Older Is Not Always Wiser 278 Nestle: Failing to Understand the Actual Market 279 SNC Lavalin: Crossing the Ethical Line 280 Target: Global Is Better Only if Your Logistics Infrastructure Can Support It 280 Uber: Using Technology to Circumvent Regulatory Requirements 281 Chapter 23: Top Ten Resources 283 Global Logistics Manufacturing and Distribution 283 GACG - Global Anti-Counterfeiting Network 284 UN/CEFACT - United Nations Centre for Trade Facilitation and Electronic Business 284 UNIDO - United Nations Industrial Development Organization 285 WTO - World Trade Organization 285 Global Logistics Services 286 HBR - Harvard Business Review 286 ICC - International Chamber of Commerce 286 OECD - Organisation for European Economic Co-operation 287 Global Humanitarian and Disaster Relief Logistics 288 IFRC - The International Federation of Red Cross and Red Crescent Societies 288 OCHA - United Nations Office for the Coordination of Humanitarian Affairs 289 WFP - United Nations World Food Programme 290 Glossary 291 Index 299

About the Author

SOLE's writing team members have over 200 combined years of global government and commercial logistics experience, including hands-on experience with major manufacturing and consulting companies such as Battelle, Boeing, Booz Allen Hamilton, and General Dynamics Information Technology.

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