SCMT $3643$ Exam $1$ Study Guide

Lesson $5$: International Sourcing Relevant Issues

Video $5\mathrm{.}1$: Total Landed Costs

Write down the example. What is the take away? All costs to the final destination need to be considered. Need to account for all costs while comparing domestic versus international suppliers

What is the concept of total landed costs? The sum of all costs of bringing the products from the supplier to the final buyer location.

Importance: This metric should govern decisions of supplier selection and location of every value added activity, such as assembly and manufacturing.

Challenges of calculating total landed costs: some costs fluctuate, some costs are difficult to measure $($e$.$g$.$ working with a foreign supplier, foreign fluctuation risk, managing defective shipments, etc$).$

A more comprehensive TLC calculation would also include the inventory costs: it would be a total logistics costs

Video $5\mathrm{.}2$: Nearshoring

What is nearshoring? What is reshoring?

Why are companies contemplating nearshoring? What are the expected advantages? Any fears?

The key role of total landed costs in nearshoring decisions

Why would some companies NOT move all operations to the US$?$

Patterns of global operations are changing, more regionalized: glocalization.