Supplier overseas

Global seafood safety standards have not been established, and the FDA estimates that more than half of the seafood eaten in the U.S. is imported, from a total of 135 countries. The FDA now requires seafood importers to verify that their overseas suppliers comply with the National Shellfish Sanitation... 

A consolidation center is a facility, located near a manufacturing plant, that receives components and parts from many suppliers and delivers them to the plant. Practitioners of lean production use these centers to insulate the factory from overseas suppliers with long lead-times and from... 

Not every item needs to go through the consolidation center. Let us assume that its purpose is to insulate the plant from overseas suppliers and from domestic suppliers that do not deliver at the frequencies, in the quantities, and in the containers that the plant wants. Then, logically, the suppliers of all other items should deliver them directly to the plant. In particular, the following types of items should not go through the consolidation center ... 

Over time, the plant will most certainly attempt to localize sourcing for all items, and the populations of both overseas suppliers and uncooperative domestic suppliers will wither. The consolidation center should therefore be needed most when the plant is new, and less and less as the plant matures. No matter how far we look, however, not every supplier will have a factory within ten miles of the plant, and those who do not will be under pressure to open at least a warehouse there. The consolidation center can find a long-term mission in serving as a common warehouse for a group of these suppliers. 

That is, from the strict point of view of transportation, the economics of returnable containers are favorable with local suppliers but not with remote or overseas suppliers. The customer plant, however, always needs item-specific containers that present the parts appropriately, and cannot be cheap enough unless they are returnable. The consolidation center emerges as the solution to reconcile these conflicting needs. 

Supply chains are constantly exposed to multiple VaR and MtT type risks. Hence, these risks have to be combined and assessed for risk management and mitigation. For example, an OEM may be interested in assessing the total VaR or MtT type risk posed by a particular overseas supplier or in a given geographic region. This could be used as additional criteria for supplier selection. 

For both type of suppliers, the lead time remains the same irrespective of minimum order quantity (MOQ), total order quantity and quality parameters of the raw materials. Transit lead time will be dependent on the location of the supplier, that is, domestic and overseas suppliers. 

In general, adding a middleman between suppliers and users does not enhance a supply chain, and it is therefore surprising to find leading, lean carmakers doing it. They have many different motivations. A consolidation center can shield the factory from dealing with overseas suppliers with lead times in months. The consolidation center is then a domestic supplier, working with the plant as if it made its own parts on a day-to-day basis. 

Three in five companies have also expressed significant or moderate concerns about the health of their overseas suppliers, with insolvencies among overseas suppliers posing a significant threat of disruption to the supply chain. 

What capabilities can local suppliers in high-cost countries develop if they are to effectively compete against overseas suppliers in low-cost countries Discuss how each capability impacts the level of inventory in the supply chain. 

The presence of a DC allows a supply chain to achieve economies of scale for inbound transportation to a point close to the final destination, because each supplier sends a large shipment to the DC that contains product for all locations the DC serves. Because DCs serve locations nearby, the outbound transportation cost is not very large. For example, W.W. Grainger has its suppliers ship products to one of nine DCs (typically in large quantities), with each DC, in turn, replenishing stores in its vicinity with the smaller quantities they need. It would be expensive for suppliers to try to serve each store directly. Similarly, when Home Depot sources from an overseas supplier, the product is held in inventory at the DC because the lot size on the inbound side is much larger than the sum of the lot sizes for the stores served by the DC. 

After considering the possibility of the suppliers failing to deliver products on time, the aircraft wiring company has determined that there is a 97% chance that the overseas supplier will deliver on time and a 3% chance that they will not. There is a 99% chance that the local supplier will deliver on time and a 1% chance that they will not. With the information provided thus far, payoffs for each branch of the decision tree are calculated as follows ... 

Alternative 1 Use overseas supplier Overseas supplier delivers... 

In the end, this computes a weighted average for the two alternatives. The alternative with the highest e.xpected value is the better choice, thus the overseas supplier is selected. 

Going back to the lengthy shipping times for products made overseas, one should note that there is another pitfall involved. Too many buyers overlook the fact that this delay requires more working capital than would be the case for locally made products. Why First of all, most overseas suppliers want payment before the goods leave their factory for the docks and ocean delivery from Asia to the United States usually takes eight to ten weeks. 

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