What to Consider Before Going Global with Your Logistics Operations
You may be considering globally expanding your successful domestic business operations; or providing logistics services for a foreign customer. There are many good reasons for “going global,” but a majority of companies — both large and small — fail in their initial efforts.
Before you make the final decision to “go global,” much research and planning is required to address and answer the following questions.
- Do you have to make changes to your product(s) or the packaging to ensure compatibility with your new foreign customer base? Will you have to accommodate a different measurement system (for example, metric) or operate on a different power source or voltage?
- Are there different ecological or safety restrictions in any or all of your global markets that will affect either the manufacture or use of your products?
- Will you have to modify your packaging to be more durable or climate resistant?
- Will you need to translate or expand your installation and repair instructions to accommodate additional foreign languages?
Your manufacturing processes
- Are you planning on using a different set of production equipment?
- Will the equipment warranties and other maintenance requirements be supportable at your new locations?
- Do you need to modify your internal manufacturing processes and procedures to accommodate your new workforce?
- Do you have the right production metrics in place for a facility in a foreign location?
- Are your new foreign facilities secure and sustainable, and do they comply with national, regional and local regulations?
Your distribution processes
- Have you established new supply and distribution chains for both the raw materials you need to support your production, as well as for the delivery of your finished products?
- Are there customs and other cross-border regulations that will affect your supply and distribution chains?
- Do you have to modify your raw material inventories to account for new procurement challenges?
- Will you have to adjust your product inventory levels and processes to accommodate foreign order and ship times?
- Do you know if your domestic transportation and movement processes and levels of in-transit security can be sustained in your foreign operations?
- Have you examined the various foreign transportation routes and modes to promote efficiency and prevent loss?
- Do you need to consider outsourcing some or all of your distribution?
Your marketing strategy
- Do you know what adjustments need to be made to your marketing policies and practices to accommodate the culture and traditions of your foreign markets?
- Do you have to change the way you market your product, in order to avoid misinterpretation?
- Are you going to be using traditional brick-and-mortar outlets or focusing on sales via the Internet?
- Will you have to modify your return policies to accommodate your new foreign customer base?
- Are you going to relocate your domestic workforce to manage your foreign facilities? Have you evaluated the tangible and intangible monetary and social costs associated with their housing, safety, health, and transportation?
- Are you going to employ expatriates, foreign nationals, local nationals, or a combination of employee types?
- Do you understand the national, regional, and local laws concerning all your workforce, to include work visas, work hours, overtime, leave, and required benefits?
- Do you know what the restrictions are (if any) for employing female workers or minors?
- Do you have to modify your employee training programs to accommodate local languages, cultures and traditions?
Your “bottom line”
- Will you need additional or different types of insurance to protect your foreign facilities, your foreign distribution chain, and your employees?
- Are there any additional liabilities that would have to be addressed or resolved under foreign, rather than domestic, legal channels?
- Have you reviewed your strategy for protecting your intellectual property in your foreign location?
- Will your domestic data management software and equipment operating and security policies have to be hardened to ensure prevention of or recovery from compromise, loss, or theft at your foreign sites?
- Can you get your foreign employees bonded, if necessary?
- Do you know what legal recourse you have should your foreign operations be affected by political disruption or sabotage?
- Have you investigated the instances of counterfeiting in your new market, and have a plan to protect your product and your brand?
- Will your domestic operations be able to assume the foreign operations’ product and service output should there be a stoppage or loss of foreign production capability?
- If your foreign expansion fails, how will it affect the company?