Global supply chains are becoming more complex as industries fragment production across multiple countries. Managing processes that extend beyond company boundaries requires new skills and capabilities. A survey found major issues for global manufacturers included fragmentation from outsourcing, lack of project management resources, and poor internal coordination. There are different models for global supply chain management involving varying degrees of international versus global sourcing. Fully integrating processes and decision making across worldwide locations and functions allows for the greatest benefits but is also the most challenging to implement.

1. Global Supply Chains April 14, 2008 Gianluca Spina – MIP, Politecnico di Milano [email_address]

4. “ Pain Points” in global SC Survey in 10 top global manufacturers (Handfield e Steininger, 2006) Participants: over 100 SC senior executives (VPs and Directors) Fragmentation due to outsourcing and offshoring (LCC) 31% Lack of project mgmt and resources ( do more with less ) 12% Poor internal coordination among functions, depts, subsidiaries etc.. 10% Price fluctuations of commodities 10% LCC competition 10% Competence shortage 7% Power shift to retailers 7% Regulations & Security (post 9-11) 7% Information systems integration 5% Protection of intellectual property 2%

5. Local processes and global processes Local processes Global processes Sourcing markets Final markets Sourcing Prod/Ass Distrib. Sourcing Prod/Ass Distrib.

9. Globalization strategy in the automotive industry

10. Porsche and BMW: both compete globally

11. … but through different manufacturing and supply strategies

15. Dell Supply Chain Global suppliers Logistic centres End customers Dell plants Local suppliers Supplier-controlled 3PL Dell-controlled Suppliers of peripherals

25. Case: Enel – Power generation (*) Financial, Insurance Total Cost of Ownership: additional task to manage: travel, translation, consulting, expats, additional inspections 20 3 40 40 10 6 30 8 Current price Price from global sourcing Labor Materials Variable costs Overhead + Margin 100 57 Transport Customs Inventory Others* 5 2 1 2 67 Totale cost from global sourcing Real Saving o: 33 ? Hidden costs?