Global Sourcing in Aviation and Defence Sector

Importance of international sourcing and challenges in the supply chain management in Aviation and defence sector

1. CADORNA CALAWOD BEL A -ONG SAWIT

2. GLOBAL SOURCING t he p r oc e s s of ident i fyin g , developing, an d u t i li z in g the be s t sourc e of suppl y for the enterp r ise , regardle s s of locat i on

3. GLOBAL SOURCING Globa l sourcing compr i se s bot h sha r ed s e rvices an d o u tsourc i ng solut i ons t hat can b e i m plemen t ed dome s t i cally and offshore.

4. GLOBAL SOURCING Share d Servi c es con c entrat i on of an organ i zat i on’s re s o urce s ; pe rform i ng s i m i la r act i v i t i e s , nor m all y d i str i bute d across the organ i zat i on, to ser v i ce mu l t i ple i nt e rn a l part n er s w i th the com m o n g o a l of ach i ev i ng custo m er sat i sf a ct i on

5. Out s ou r cing GLOBAL SOURCING the pro v i s i on b y a th i rd part y of de f i ned ser v i ces, wh i ch can i n v ol v e a tran s fer of asse t s , i ntellectual pr o perty and/ o r staff

6. COMMON R EASON S FOR GLOBAL SOURCING R e duc i ng o v erall c o s t structure A v a il a b i l i t y of a new t echnology an d c apac i ty Est a bl i s h i ng al t ernat i v e so u rc e s of supply Ac c ess t o new des i gns or s pe c i a l i zed i ntellectual cap i tal Go v ernment i ncen t ives S u per i or qual i ty

7. GL O BA L SOURC I NG FACTORS G l obal s ourcing fac t ors t hat m u s t b e unders t ood and ba l ance d can b e se g m en t ed in t o si x ca t egories: 1 . M a ter i a l Cos ts

8. GL O BA L SOURC I NG FACTORS G l obal s ourcing fac t ors t hat m u s t b e unders t ood and ba l ance d can b e se g m en t ed in t o si x ca t egories: 2 . T ran sport a t i on Cos ts

9. GL O BA L SOURC I NG FACTORS G l obal s ourcing fac t ors t hat m u s t b e unders t ood and ba l ance d can b e se g m en t ed in t o si x ca t egories: 3 . I n v en t ory carry i ng o ut

10. GL O BA L SOURC I NG FACTORS G l obal s ourcing fac t ors t hat m u s t b e unders t ood and ba l ance d can b e se g m en t ed in t o si x ca t egories: 4 . C ros s- bor d er taxe s , tar i f f s , an d dut y c ost s

11. GL O BA L SOURC I NG FACTORS G l obal s ourcing fac t ors t hat m u s t b e unders t ood and ba l ance d can b e se g m en t ed in t o si x ca t egories: 5 . S u ppl y a nd opera t i on a l perform a nce

12. GL O BA L SOURC I NG FACTORS G l obal s ourcing fac t ors t hat m u s t b e unders t ood and ba l ance d can b e se g m en t ed in t o si x ca t egories: 6 . S u ppl y a nd opera t i on a l r i sks

13. HIDDE N COSTS OF GLOBAL SOURCING I nternal Ex p enses S uppl i er He a lth Post - c o ntract lull D u ty an d tar i ff c h anges Contract no n - compl i ance T rue i n v entory costs Log i st i cs Volat i l ity T e c hnology Q u al i ty breakdo w n

14. QUANTITA TIV E AND QUALITA T IVE ASPECTS

15. QUANT I TATIVE ASPECTS those that are ea s i ly measurable Logis t ics Econ o mic Quality Infor m ation an d Comm u nication

16. QUA LITATIVE ASPECTS those wh i ch are m ore d i ff i cu l t to quant i fy Po l it i cal Leg a l Cu l tu r al Bureauc r atic Envir o nmental Ethica l Natu r e

17. GL O BA L RISK ISSUES 1 . Distance the d i stan t betwee n the b u ye r an d sell i ng f i rm i s s i gn i f i cant i n terms of t i me zones an d phys i cal lo cat i on.

18. 2 . Comm u nicat i on can b e descr i be d a s the g l ue that ho l d s to gether a sourc i ng relat i onsh i p. GL O BA L RISK ISSUES

19. 3 . The val u e of money Currency Ex c hange Rate s . Depend i ng on the performanc e an d strength of the d o l l ar , g o o d s can c o s t Amer i can f i rms d i ffe r ent am o u nts from wh a t's expecte d . GL O BA L RISK ISSUES

20. 4 . Qual i ty I ssu e s the b u y i ng f i rm m u st spen d the neces s ar y t i me to c o rr e ctly spec i fy and art i c u late q ua l i ty expectat i ons. GL O BA L RISK ISSUES

21. 5 . Pipeline inventory p i pel i ne i nventory i s s ues w i l l alw ay s o c c u r whe n a th i rd part y ( the sh i pper ) i s i nv o lve d . GL O BA L RISK ISSUES

22. 6 . Staff i ng i f a b u y i ng f i rm i s to be eff e ct i v e w i th a n offshore sourc i ng strategy , i t must e i ther h i re experts or devel o p spec i al i st s that are as s i gned to offshore sup pl i er s . GL O BA L RISK ISSUES

23. NEGOTIATION Ne g o t i at i on i s a proces s i n wh i ch expl i c i t propo s a l s a re pu t f o rward for d i sc u s s i on i n order to reach a gre em ent on a n exchang e or on th e rea l i za ti on of a comm o n i ntere s t where con fl i ct in g i n t ere s ts a re pre s en t .

24. NEGOTIATION whe n neg o t i at i ng a pur c hase agreement, there are general attr i b utes i n dea l i ng w i th var i o u s offshore supp l i ers.

25. F O REIGN TRADE ZONES FTA Act of 1 9 34 create d tra d e zones t o enco u rag e exports from fore i gn co untr i es T he a ct a llowe d f or the s t orage of go o d s w i th i n the U . S bo u nd a r i es w i thou t pay m ent u nt i l the go o d s p a s s ed to the buy i ng com pa n y

26. E U (Europea n Union) the form ul at i on of th i s le a d s to the el i mination of cu s to m s for m a l i t i es betwe en co untr i es. T here a ls o w i l l b e tar i ffs red u ct i ons i n 4 categor i es of m a n u f a ctu r i ng g o ods a s wel l a s other sch e d u le s f or red u c i ng tra d e barr i ers. F O REIGN TRADE ZONES

27. COUNTER TRADE exchang e of g o ods f or go o d s i n fu l l or part i al pay m ent of a s a le s tran s act i on s . FORMS O F COU N TER TR A DE 1 . O ff s ets a re com mercia l prac t ices require d as a condi t io n of purcha s e of g oods and s e rvice s .

28. COUNTER TRADE exchang e of g o ods f or go o d s i n fu l l or part i al pay m ent of a s a le s tran s act i on s . FORMS O F COU N TER TR A DE 2 . I nd i re c t off s ets occur where prod u c ts o r s e rvices t ra n s f erred i n a n of f se t arr a ng e ment are u nrela t ed t o t he sp e cific prod u c ts referred t o i n t he export a g ree m ent

29. COUNTER TRADE exchang e of g o ods f or go o d s i n fu l l or part i al pay m ent of a s a le s tran s act i on s . FORMS O F COU N TER TR A DE 3 . Coproduct i on this f orm o f a gre em ent in v olves t ha t p u rcha s er bein g g ive n a s hare i n t he m a n u f a c t ure of a f oreign de s i g ned prod u c t .

30. COUNTER TRADE exchang e of g o ods f or go o d s i n fu l l or part i al pay m ent of a s a le s tran s act i on s . FORMS O F COU N TER TR A DE 4 . L i censed pr o duct i on i s whe n t he recipient ob ta in s a s h a re of t he produc t io n wor k for i t s ow order. n

31. COUNTER TRADE exchang e of g o ods f or go o d s i n fu l l or part i al pay m ent of a s a le s tran s act i on s . FORMS O F COU N TER TR A DE 5 . S ubcontractor product i on i n t his ca s e t he pri m e con t rac t or s u bs t i t ut e s a n exi s t in g s u p pl ie r wi t h one l oca t ed i n t he buy i ng co u n t ry.

32. COUNTER TRADE exchang e of g o ods f or go o d s i n fu l l or part i al pay m ent of a s a le s tran s act i on s . FORMS O F COU N TER TR A DE 6 . B arter t he non m o ne t a ry exchang e of go o d s - for- go o ds.

33. COUNTER TRADE exchang e of g o ods f or go o d s i n fu l l or part i al pay m ent of a s a le s tran s act i on s . FORMS O F COU N TER TR A DE 7 . Counter purchase t he s e ll er exchang es prod u c ts f o r compens a t ory amo u n t s of com m o di t ie s .