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Global Strategic Positioning

McGraw-Hill/Irwin Copyright © 2007 The McGraw-Hill Companies, Inc. All rights reserv
Table 12-1 Estimated 2002 National Logistical
Expenditures

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Table 12-2 Differential Characteristics of Global
Development

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Table 12-3 Common Forms of International Logistics
Documentation

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Table 12-4 Sourcing Guidelines

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CHAPTER 12 SUPPLEMENTAL

The following slides present supplementary materials.

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International Logistics Documentation
• Combined transport document. May replace the bill of lading if
goods are shipped by air (airway bill) or by more than one mode
of transportation.
• Commercial invoice. A document written by the exporter to
precisely describe the goods and the terms of sale (similar to a
shipping invoice used in domestic shipments).
• Insurance certificate. Explains what type of coverage is utilized
(fire, theft, water), the name of the insurer, and the exporter
whose property is being insured.
• Certificate of origin. Denotes the country in which the goods
were produced in order to assess tariffs and other government-
imposed restrictions on trade.
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1997 Global Logistics Expenditures

Gross Domestic Logistics

Product (GDP) Cost (US$ Logistics
Region Country (US$ in Billions) in Billions) Cost to GDP
North America Canada 658 80 12.1
Mexico 695 106 15.3
United States 8083 849 10.5
Total 240 1035 11
Europe Belgium/ Lux. 240 27 11.4
Denmark 123 16 12.9
France 1320 158 12
Germany 1740 228 13.1
Greece 137 17 12.6
Ireland 60 8 14
Italy 1240 149 12
Netherlands 344 41 11.9
Portugal 150 19 12.9
Spain 642 94 14.7
United Kingdom 1242 125 10.1
Total 7238 884 12.2

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Definition of Supply Chain Protection and Security

 The application of policies, procedures, and

technology to protect SC assets (product, facilities,
equipment, information, and personnel) from theft,
damage, or terrorism and to prevent the introduction
of unauthorized contraband, people, or weapons of
mass destruction.
Closs and McGarrell (2004)

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Security Initiative Drivers

Study Drivers of Security Initiatives

Aberdeen Group (2004) Brand damage from product recall or regulatory non-
compliance
Customer and trading partner requirements

Increased product safety and traceability concerns due to

outsourcing activity
Brand piracy, gray market activity and product
counterfeiting
EyeforTransport (2004) Government pressure

Customer requirements

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Primary Areas of Food Vulnerability

Author Vulnerability

Gips (2003) Any area that is highly accessible from

multiple modes (e.g. air, road, and rail)

Bulk milk tanks are very vulnerable to

contamination b/c they combine the milk
of many cows and one infected cow could
contaminate the whole tank

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Primary Areas of Food Vulnerability (cont.)

Wheelis et al. (2003) Farms/ranches next to international

borders
Chalk (2001) Small food processors
Cremin (2001) Small to medium sized firms
Products that don’t require cooking or
extensive preparation
Products that will elicit an emotional
response (e.g., baby food)
Bruemmer (2003) Perishable foods are a likely target as
they require little processing and their
lower shelf life means they are less likely
to be recalled in time

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Primary Areas of Food Vulnerability (cont.)

Nganje et al. (2003) High volume grain elevators

Strozniack (2004) Average, medium sized firms are
Bledsoe and Rasco (2002) Targets include corporations, universities,
and government research facilities

World Health Organization (WHO) (2002) Slaughterhouses are vulnerable

Bulk foods are vulnerable

The most readily accessible food
processes
Foods that are most vulnerable to
undetected tampering
Foods that are the most widely
disseminated
The least supervised food production
areas or processes
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Secure Supply Chain Requirements

 Not allowing any biological or chemical agent to be

introduced to the products
 Not allowing any illegal commodity to be intermingled
with the shipment
 Not allowing the replacement of the product with an
illegal commodity or person
 Not allowing the shipment to be used as a weapon

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Supply Chain Security Initiatives

 Customs-Trade Partnership Against Terrorism (C-TPAT)

– Certify known shippers through self-appraisals of
security procedures coupled with audits and verifications.
For a more detailed discussion regarding C-TPAT, see:
http://
www.cbp.gov/xp/cgov/import/commercial_enforcement/ctpat
/ A more detailed description regarding how to determine
if your trade partners are C-TPAT compliant can be found
at:
http://www.cbp.gov/linkhandler/cgov/import/commercial_enforc

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Supply Chain Security Initiatives (cont.)

 Container Security Initiative (CSI) – Pre-

screening of containers coupled with fast
tracking when cargo reaches the U.S. A more
detailed description can be found at:
http://www.cbp.gov/linkhandler/cgov/border_security/int

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Supply Chain Security Initiatives (cont.)

 Advanced Manifest Rule (AMR) – Require detailed cargo

data prior to admission to U.S. The following link
illustrates how AMR has influenced border operations.
http://www.cbp.gov/xp/CustomsToday/2004/March/Other/rules_
Advanced Cargo Information ( ACI) – Requires more
detailed information prior to acceptance into U.S.

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Supply Chain Security Initiatives (cont.)

 Free and Secure Trade (FAST) – Allows low-risk goods

transported by trusted carriers for trusted firms to pass
rapidly through border crossings. For a more detailed
discussion, see:
http://www.cbp.gov/linkhandler/cgov/import/commercial_enforc
Smart and Secure Tradelanes (SST) – Technology platform
to track containers globally and generate chain-of-
custody audit trails. For more information on this industry
driven initiative see: http://www.scst.info/info.html

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