Global Supply Chain Management: Extending Logistics’ Total Cost Perspective to Configure Global Supply Chains

Evaluating logistics network configurations for a global supply chain

“…With respect to the third group of researches, the focus of the present study, the configuration of global logistics networks implies the choice of the most suitable international transport mode (mainly ocean container shipping or airfreight), the design of infrastructures for freight consolidation and for serving end markets and the definition of the number of echelons composing the logistics network (Kruger, 2002). Prior literature analyses global logistics network design from two main perspectives: from global carriers' point-of-view (international forwarders or logistics service providers), or from manufacturers' side.…”

“…The variation of some input parameters can significantly affect the OLC and consequently the ultimate decision regarding the selection of the logistics network configuration. In the third step of the framework we try to generalise the obtained results, performing a sensitivity analysis aimed at studying the impact on the OLC of the variation of five key parameters, identified in literature as relevant elements for designing global logistics networks (Kruger, 2002;Vereecke We ran five test problems for each parameter, mounting up to a total of 25 cases. In the first test, we varied the annual demand (the total amount of goods sourced from suppliers, expressed in m 3 ) while keeping constant the other inputs (Table IX -part A).…”

“…Moreover, global sourcing creates the need to efficiently plan intercontinental transportation (Pollit, 1998;Bhatnagar and Viswanathan, 2000;Mattsson, 2003). Geographical distances in global contexts increase not only transportation costs, but also make it more complicated to solve the trade-off between inventory and physical distribution costs (Kruger, 2002). Low-cost off-shore sourcing strategies can end up as high-cost supply chain outcome (Christopher et al, 2006).…”