Masters Degrees (Logistics)

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Browsing Masters Degrees (Logistics) by Author "Boshoff, Oliza"

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    The hidden costs of automotive commodities procured from the People’s Republic of China
    (Stellenbosch : Stellenbosch University, 2008-03) Boshoff, Oliza; Pienaar, W. J.; Stellenbosch University. Faculty of Economic and Management Sciences. Dept. of Logistics.
    ENGLISH ABSTRACT: Globalization has shifted to a level where market competition is tougher. Therefore, multinational companies focus on cutting cost along the company’s supply chain with heavy scrutiny on procurement. Developing countries have become very attractive from which to strategically procure commodities because of low cost labour, especially from the People’s Republic of China. The business complexity, ethics and current market situation in China are often too modestly emphasized. Yet, these elements have a significant impact on the sourcing decision because it indirectly influences the total landed cost of a commodity but is not taken into account. Therefore, the total landed cost on which sourcing decisions are made, does not reflect the actual total landed cost of a commodity. In many cases multinational companies sourcing from China do not realise the impact of the hidden cost involved and do not reach the expected cost savings as calculated. The purpose of this study is to explore why more attention must be paid to hidden cost when automotive commodities are procured from China. This, as well as the research methodology used in order to obtain the data, is explained in chapter one. Chapter two of this thesis illustrates the change in a company’s supply chain and discusses this in a global sourcing context. The sourcing commodity, which is the point of focus in this study, is automotive commodities sourced from China and is discussed in chapter three. Based on China’s increased presence in global sourcing of automotive commodities, chapter four focuses on China’s integration into the global supply chain. The influential factors that have an impact (hidden cost) on the actual landed cost of commodities sourced from China are described in chapter five and identified as guanxi, indirect business logistic obstacles, quality of goods and supply, management, the labour market and training, and Intellectual Property Rights (IPR). In chapter six the influential factors, as described in chapter five, are analysed through a case study of Daimler Chrysler China Limited. Chapter seven is a comparative study of Japan’s miracle economy from 1960-1980 and the current economic trends in China to determine whether it will be feasible to procure automotive commodities from China in the future with regards to the economic indicators.