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Logistics and Supply Chain Management

Notes The economic union is the fourth and most advanced stage of development because it implies
harmonization of economic policies beyond a common market. Economic union standardizes
monetary and fiscal policy among member countries. While not absolutely required, an economic
union likely includes common currency and harmonized tax structures. The economic union
implies that all goods and production factors can move freely according to market conditions
and that no major fluctuations in monetary exchange and interest rates will occur.

11.3.2 Integration Status

This section reviews the current status of each major global region, including a summary of
current and proposed trade acts. It also discusses the logistics implications of each trade act and
the strategies reported by enterprises to accommodate and take advantage of regional changes.



Caselet IBM Evolves a Globally Integrated Supply Chain

BM’s global supply chain encompasses hundreds of thousands of suppliers and is used
to address every product and service offering the company produces – from mainframe
Icomputers, servers and other hardware, to software, services and spare parts.
Orchestrating a supply chain of this size and complexity while achieving end-to-end
visibility and total integration is not a small task. In many respects, it came about as the
company itself evolved.
“Last year, IBM celebrated its 100th anniversary,” said Mike Ray, Vice President of Business
Integration and Strategy for IBM’s Integrated Supply Chain. “I mention this because in
many respects, the changes we have made to the supply chain over the years can be
mapped to the changes in the company over the years”.
There was a point in time, for example, when IBM, as a multi-national organization, let
every business unit within the company run itself. “The supply chain was similar,” Ray
acknowledges. “It was characterized by a widely distributed infrastructure and by widely
distributed procurement practices. Later, as IBM became a global and integrated enterprise,
the supply chain changed radically as well. Today, all of our supply chain processes are
fully integrated on a global basis, from purchasing to manufacturing and logistics. Nothing
in the system is done locally.”
Along with this company and supply chain integration was the recognition that if the
supply chain was going to be successful, it had to function in a circular and networked
fashion, and not in the older, linear model.
Like most global enterprises, IBM has gone through years of both evolution and
transformation in its business and supply chain. Today’s challenges require the company
to be competitive and responsive in an ever-changing global marketplace. This focus
demands a set of sound best business practices and best supply chain practices that will
enable the company to reach its goals.
Source: http://www.highbeam.com/doc/1G1-291360206.html

Self Assessment

Fill in the blanks:

7. …………………… economies are increasingly interlinked by material suppliers, logistical
systems, manufacturing capacity, and markets.

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