Global Sourcing Logistics: How to Manage Risk and Gain Competitive Advantage in a Worldwide Marketplace / Edition 1

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"More than ever, global sourcing is an economic necessity for companies large and small, and in every industry. But with advantages in price and terms come new risks that businesses must approach effectively lest their supply chain -- and ultimately the whole enterprise -- be undermined.

Global Sourcing Logistics offers businesses a blueprint for creating standard operating procedures for managing the risks of their inbound supply chains. Filled with hands-on solutions to the challenges of global commerce, the book covers:

• reasons to (or not to) source globally

• measuring the risks versus those of other sourcing alternatives

• how to reduce landed costs

• compliance management and new Customs and Homeland Security issues

• insurance, liability, and loss control

• and much more

A must-have resource for all sourcing, supply chain, risk management. and import/export professionals, the book features tools for creating a comprehensive program to ensure competitive advantage while avoiding the pitfalls that can undermine even powerful businesses and seasoned supply chain veterans."

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Product Details

  • ISBN-13: 9780814408926
  • Publisher: AMACOM Books
  • Publication date: 12/28/2006
  • Edition number: 1
  • Pages: 464
  • Product dimensions: 6.30 (w) x 9.00 (h) x 1.50 (d)

Meet the Author

Thomas A. Cook (Massapequa, NY) is the author of Mastering Import and Export Management and has more than 30 years of experience in global business and supply chain issues.

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Table of Contents

"Foreword xv

Preface xvii

Acknowledgments xix

Chapter 1 1

Developing Foreign Sourcing

This chapter sets the stage for the volume of comprehensive

and critical material covered in the balance of the

book. It explains in an overview format just why companies

look to sourcing overseas, how they will interface with foreign

companies, and just what options exist in finding and

managing these vendor relationships.

There is also an intensive guide to finding and qualifying

overseas partners.


Sourcing vs. Outsourcing

Global Purchasing Management 101

Skill Sets for Purchasing Managers

Why Develop Sourcing Options in Foreign Markets?

Locating Manufacturing Sources

Developing Relationships with Foreign Partners

Joint Venture, Own, or Contract Out?

Chapter 2 17

The Global Sourcing Model

This chapter begins the process of dissecting the risks of

global sourcing, framing the issues, and providing necessary

benchmarking ideas for evaluating the importance to your

organizationís supply chain.

Various case studies will be reviewed that provide insight

and informed concepts into your own decision-making


Identifying the Risks of Global Sourcing.

Competition for Resources

Lack of Expertise

Force Majeure

Local and Regional Politics

Currency Issues

Local and Regional Economics

Relationships between the United States and Other


Language and Culture

Energy, Communication, and Transportation


Government Posture

Legal and Proprietary Rights

U.S. Customs

The Physical Risks of Transporting Goods from

Overseas to the United States

Putting the Risks into Perspective.

Cook’s Law of Global Risk

Case Studies:

Where Foreign Sourcing Makes Sense

Where Foreign Sourcing Makes Little Sense

Options to Global Sourcing

Foreign Trade Zones

Chapter 3 37

Landed Costs

Landed Cost becomes the key factor in making sure that

foreign sourcing provides competitive advantage. It is the

total aggregate of all the costs to develop and bring a product

to produce utilization or revenue.

Understanding how landed cost works is a key ingredient

for making sure that off shore production is viable and

to assure competitive inbound supply chains

Developing Landed Cost Models

Import Landed Cost Matrix

Export Landed Cost Matrix

Integrating Domestic Supply Chain Requirements

Landed Cost AnalysisCase Study

Landed Costs

Reducing Landed Costs

Sourcing from China

Best Practices from PRC China

Transportation and Logistics

Managing Service Providers: Freight Forwarders,

Customhouse Brokers, and Carriers

Third Party Logistics

Chapter 4 59

Post 9/11 and The Affect on Global Purchasing

The world changed on 9/11. This chapter peels through

the layers of government scrutiny in dealing with the various

government agencies engaged in enforcement and regulatory


The reader will have a very detailed composite of all the

necessary documentation, procedures, and legal ramifications

involved in importing goods and merchandise into

the United States.

In today’s competitive market, in order to run successfully,

all supply chains must pay attention to all the security,

compliance, and regulatory affairs that have changed

importing and exporting since the events of 9/11.

Post 9/11 Overview

Compliance, Security, and Terrorism

Department of Homeland Security

U.S. Customs and Border Protection

Container Security Initiative

24 Hour Manifest

Customs-Trade Partnership Against Terrorism

Free and Secure Trade

Department of Transportation and the Transportation

Security Adminstration: Hazardous Materials

Operation Safe Commerce

Import Management Overview

Importer of Record

Reasonable Care

Supervision and Control

Ultimate Consignee

Power of Attorney

Due Diligence

Record Keeping

Documentation (Invoice) Requirements



Harmonized Tarriff Classification

Imported Product and Origin Markings


Duties and Taxes

Customs Ruling Online Research System

Intellectual Property Rights E-Recordation Online


Automated Customs Environment

Compliance Management: Post 9/11 Environment

How Supply Lines were Affected

The United States Government Reacts


90858_chFM (i-xxii).ps 9/7/06 1:29 PM Page x

Logistics Costs Escalate

Documentation Detail

Inbound Supply Chains Required Changes

Supplier Qualifications

Compliance Management

Foreign Sourcing Executives and Export

Government Agencies

Automated Export System and Census Bureau

United States Principal Partner of Interest

Export Licensing

Denied Parties

Deemed Exports

Bis Transshipment Country Export Control Initiative

Anti-Boycott Compliance

Department of Treasury

Department of State

Chapter 5 135

Risk Management and Insurance

When we choose to operate in foreign markets, we have

various insurance exposures that we now entertain. This

chapter takes a hard look at identifying the various exposures,

categorizing them, and offering risk management

strategies to eliminate or mitigate.

We would not build a facility today without a sprinkler

and alarm system as a method of managing the risks of fire

and burglary, so why would we build a supply chain in sourcing

from overseas suppliers and not build-in risk management

and loss control features?

This chapter outlines how we reduce the risks and maximize

our opportunity for a loss free global supply chain.

Insurance Exposures

Risk Management


Kidnap and Ransom

Property and Liability

Contract and Business Relationship Management

Marine Cargo

Broker and Insurance Company

Scope of Coverage


Geographic Limitations

Modes of Transit


Contingency or Unpaid Vendor Coverage or

Difference in Conditions

Duty and Taxes

Terrorism Risk Insurance Act

War Strikes, Riots, and Civil Commotions

Political Risk, Receivables, and Export Credit

Ten Steps in Managing Political Risk Insurance

Selecting Broker or Underwriter

Service Requirements

Combining Risk


Contract Review

Political Risk Intelligence

Rates, Terms, Conditions

Export Credit

Loss Control

Claims Procedures

Loss Control Management

Chapter 6 169

Developing an Inbound Supply Chain Risk Management


With all of the knowledge gained from the prior chapters, it is

now apropos to put it into motion and create a “plan of action.”

The reader will have the specific tools provided for securing

a program to reduce risk and create the most competitive

environment to make the inbound (import) supply

chain work successfully.

Developing an Inbound Supply Chain Risk Management


Spread of Risk

Applying Loss Control to Foreign Partners

Engage Foreign Partner

Exercise Patience

Invest in the Relationship

Managing the International Communication Terms

Supply Chain Standard Operating Procedures

Technology Options

Competitive Advantage

Compliance and Security Management

Federal Corrupt Practices Act

Radio Frequency Identification: Supply Chain Compliance

and Security Tool


Best Practices: Ten Step Management Approach

Chapter 7 211

Closing Remarks

Glossary 215

Guide to Abbreviations and Acronyms 227

Appendix 233

Import Regulations Reference Guide

Guidance on Reexports

FDA Enforcement

Tips for New Importers and Exporters

Managing the North American Free Trade Agreement


Inbound Customs Manifest Requirements

Outline of Terrorism Act of 2002

Key to International Web Sites


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