Supply Chain Network Analysis and Design

Question 1

What are the strategic importance of Supply Chain Network design (7)

Answer 1

1. Changes to global trade patterns
   With the passage of time, it is easy to see significant changes in the patterns of global trade. This is due to the economies of regions and countries being dynamic and subject to continual change. Some of the factors that need to be considered include:
   • Currency exchange rates
   • Volumes of commerce between and within regions/countries of the world
   • Abilities of regions/countries to have ample availability of needed items for shipment to global locations
   • Global transportation infrastructure necessary to physically move items from place of availability to place of demand
   • Balance or lack of balance in global trade lanes (i.e., relates to the issues of supply and demand for global logistics and transportation services)
2. Customer service requirements
   The logistical requirements of customers are changing in numerous ways, and so the need to reevaluate and redesign supply chain networks is of great contemporary interest.
3. Shifting Locations of Customer and/or Supply Markets
   Considering that manufacturing and logistics facilities are positioned in the supply chain between customer and supply markets, any changes in these markets should cause a firm to reevaluate its supply chain.
4. Change in Corporate Ownership/Merger and Acquisition Activity
5. Cost Pressures
   A major imperative for many firms today is to figure out new and innovative ways to take cost out of their key business processes, including those relating to logistics and supply chain management.
6. Competitive Capabilities
7. Corporate Organisational Change
   It is not unusual for supply chain network design to become a topic of discussion at the same time that a firm considers any major corporate organisational change, such as downsizing.

Question 2

List the 9 Major Location Determinants

Answer 2

Labour climate
Transportation services and infrastructure
Proximity to market and customers
Quality of Life
Taxes and Industrial incentives
Supplier Networks
Land costs and utilities 
IT Infrastructure 
Company Preference