SCM Idealist

photo credit: Jeremy Brooks

Organizations today often encourage changes for better approaches in dealing with suppliers and customers. However, these changes are often hard to achieve. This leads us to observe emerging trends in supply chain in hope of optimizing business.  What are the new trends and why are they important to company?  Emerging trends in supply chains are new approach than impacts company’s bottom line and gives competitive advantage. These trends impact how company behave and perform business practices. By understanding how these trends impact companies and what values it brings to companies, will allow supply chain to be much more effective. David Gustin, author of the article Emerging Trends in Supply Chain Finance, discuss excellent topic on data triggered finance. He argues that data triggered finance is shifting market toward open accounts. He goes step further and shows six trigger that are in early stage of migrating to data triggered finance. There triggers include:
1.    Purchase Order Issuance
2.    Work in Progress Payments
3.    Vendor managed Inventory
4.    Inventory in Transit Financing
5.    Proof of Delivery via forwarded cargo receipt and other documents
6.    Buyer Approved Invoices

In reviewing article and relating to my work experience, I agree with author. From technological perspective, no one ever taught that supply chain can have huge impact on company. Thank to advanced technological innovation, companies are operating at high efficiently and have huge impact on bottom line.  The trigger that author has proposed are perhaps in early stage of emerging trends but it is matter of time before technologies would allow company to exchange finance transactions from data triggered.

Vendor Managed Inventory is becoming more popular these days. Perhaps it will be even more attractive choice in near future. However, what David Gustin proposed which is finance through data makes sense and optimize both buyers and seller.  Companies are already keeping good record of VMI and to manage inventory.  So why not take step further and integrate finance aspect of managing inventory. Same can be said for other triggers such as poof of delivery and buyer approved invoices.

Future trend in supply chain is never ending story. However, it is one that is important because it create competitive advantage, add values, and have huge impact on bottom line. There is enormous pressure from internal and external, making organization to seek out innovated ways to impact bottom line. In final words, Supply Chain must force them self to adapt to ever going changes and seek out new trends in supply chains.

photo credit: mescon

In modern business, it is not enough for organization to have simply all the parts, but rather organization must have the parts in right place at right time. In hope of achieving such approach organization often practice different inventory strategies to gain benefits.  This brings us to important topic. What is inventory? Why is it important to organization? What strategies are to be considered? And more important, how is inventory related to sales, finance, supply chain and logistics? In paragraphs to follow, these questions are discussed, as well as the challenges presented in managing inventory along with inventory strategies.  In modern world inventory strategies are crucial in ensuring positive impact on bottom line. Many organizations often implement supply chain and logistical strategies in managing inventories.

“Inventories are stocks of goods and materials that are maintained for many purposes, the most common being to satisfy normal demand patterns.” (Murphy R. and Woof F, 2004) In manufacturing world, the raw material and sub components are kept in inventory to complete assembly of final product.  Furthermore, the final product is also kept in inventory to meet its demand.   This is also known as cycle stock which is an inventory kept in stock to meet demand. For example, if the organization consumes 10 packs of paper a day, then organization may buy in 100 packs of paper at a time. This will satisfy the demand for 10 days. Furthermore, organization may also buy few extra packs known as safety stock to ensure any uncertainty in demand.  For organization to buy, store then satisfy demand many sound simple, but challenge is also pay attention to cost such as carrying cost, shrinkage, obsolete parts, storage cost, handling cost, insurance cost, taxes, interest charges, and any opportunity cost. In addition, most important challenge of all is keeping satisfied customer through service.

One of the methods of overcoming inventory challenge is by forecasting. A lot of time, effort and money are spent trying to predict most accurate forecast as it has huge impact on bottom line. Inaccurate forecast can cause material shortage, lost of sales, inventory cost, and poor profit. Therefore, it is important for one to do its best to predict most accurate forecast. There is no such thing as 100% correct forecast, however, through quantities methods, one can create a forecast which may not be 100% accurate but it is fairly close given historic data, demand pattern and assumptions. Forecasting is one thing, but that forecast also needs to be measured to see its accuracy, also known as forecast error. Forecast error is the difference between actual quantity and forecast

Another method of overcoming the challenge of inventory is Make-to-order approach. Make-to-orders is a concept where good or service is made after the order is received from customer. Usually, the product is customer per specs than the standard or combination of both. This also means that longer lead time than standard product. On other hand Make-to-stock is concept where final product is manufactured and stocked before receipt of customer’s order. For this concept, normally customer places the order and supplier take the product off the shelf and delivers it in rather short time frame. Again, with inventory on hand organization must utilize forecast to ensure stock is maintained at optimal level.

In the service industry, inventory is little different from actual physical product inventory. Service inventory are normally found in travel agencies, insurance industries, and medical industries.  “service inventories allow firms to buffer their resources from the variability of demand and reap benefits from economies of scale while benefiting customers.” (Chopra S, Lariviere M, 2005) While high customer service level is important for organization, low service level may cause loss of sale due to unserved order.  Achieving just right balance is difficult, however, with forecast and historic demand pattern, it is in best interest of organization to set the level to optimal.

The challenges posed in managing inventory are sometime conflicting organization goal in stocking inventories.  For example, in typical organization, sales team may want to have higher inventory to make sure that there is no stock. On the other hand finance may want minimize inventory in order to reduce cost.  This conflicting organization objectives make a though challenges for one managing inventories.  However, managing inventories with optimal level is a critical for organization in ensuring competitive advantage regardless of product or service industry.

In final words, inventory is very important to organization. Organization that manages inventory properly can have huge impact on bottom line. While high inventory level may reduce lead time and provide better customer service, the low optimal level inventory is more appropriate choice for organization as it reduces cost while maintaining good customer service.

References

P.R. Murphy and D.F. Wood, Pearson/Prentice Hall, (2004) Contemporary Logistics (8th ed.) Upper Saddle River, NJ

Sunil Chopra, Martin Lariviere (2005) Managing Service Inventory to Improve Performance. Retrieved on August 12, 2008 from link

photo credit: mescon

Competing successfully in the modern world is not simple as getting order from customer and placing order to supplier.  In the modern world, one must know the customer, what is being purchased, where is it being shipped? Who the end user is?  What is the end product?   Additionally, one must also know where the suppliers are? Where the material comes from? How their suppliers manufacture the product? Where is it being stored? As the global competition increase, business must pay closer attention to both customers and the suppliers. Organizations often today are in tremendous pressure due to constant technological improvement and global competition. As a result, organizations often encourage changes, innovation, streamline effective operation methods, value system, and customer pull mythology.  However, these changes are not easy to accomplice.  This is where Strategic Logistic comes in play.  What is Logistics? Why is it important to organization?

Defining Logistics and Strategic Role

SCM is an integration of activities that procure materials, transform them in to intermediate good and final products, and deliver them to customers. This includes purchasing, supplier management, inventories, and sourcing.  Some of the other tasks involve is cutting cost, improving process, creating efficiency, and increasing bottom line.  Logistic is a typically considered to be sub-part of supply chain. Most people view Logistic as transportation of goods from one point to another.  However, Logistic is bit more than that.  It functions are order fulfillment, warehousing, shipping, receiving, imports, in-bound and out-bound freight.

Implications of poor Logistics and SCM

The author Michael Levans shows important of Logistics at Ashland Inc.  As he pointed out that, the key to creating strategic sourcing consists of purchasing, operation, and logistics personnel team. At Ashland Inc, while supply management at its best by taking strategic sourcing, one of the obvious problem was extremely high transportation cost. This is where strategic logistic played a key role in creating efficiency and saving millions in transportation cost by implementing partnership with carrier, streamlining truck routes and material handling management. One of the strategies that Logistics at Ashland Inc implemented was partnership with the carriers. “It may sound cliché…but you do need to have a partnership with you carriers. If you have everyone on board, and everyone sees the benefits and realities, everyone is a winner in this” (Michael Levans, 2008)

Customer Dissatisfaction or Satisfaction

Poor Logistic management can let to dissatisfied customer. This could cost company not only money bout also a potential future business. There are always expectations by customers. These expectations are to be met. Sometime these expectations are simple and sometime the expectations are complex.  Regardless, the expectations are to be taken seriously by Logistic to ensure fully satisfaction of customers.
In conclusion, the strategic role of Logistics discussed by author shows importance of why it is no longer just about purchasing, shipping or receiving, but rather its strategic role of Supply Chain and Logistics. The points of view covered by author were interesting and they show essential approaches to strategic Logistics and Procurement. The bottom line is that, it is no longer just enough to keep purchasing at cheap cost, but it is far more important to perform as strategic role of procurement, Operation and Logistics. In final words, the bottom line to organization could be tremendous if strategic Supply Chain and Logistic is managed correctly, as such, one can not afford to leave unchecked.

References
Michael Levans (2008) the Fine Art of Persistence, Retrieved on August 2, 2008 from http://web.ebscohost.com.ezproxy.apollolibrary.com/ehost/pdf?vid=1&hid=109&sid=52964abc-f373-4a31-b824-1f09eb263d3b%40sessionmgr109

1. Analysis of competitive price proposals – also known as competitive bedding. In this technique, RFQ is submitted to several supplier who submit the proposal to buyer. The proposal then is reviewed and compared with one another.
2. Comparison with regulated, catalog or market prices.
2.1 Regulated Prices– Price is set by laws or regulation. The supplier is not allowed to charge more or less than what government has determined as price. Although they can change price but it requires formal review, hearing and vote of regulatory authority.
2.2 Catalog Prices – catalog price is the list price normally maintained by supplier/manufacture in their catalog and made available to public.
2.3 Market Prices – The interaction between buyer and seller (supply and demand) can create a market price. It is the price that buyers and sellers are willing to trade, driven by market force.
3. Uses of Web-based e-procurement – prices are provided to buyers on web based portal also known as B2B e-commerce. Internet provides advanced form of communication between buyer and seller, giving full access to list price, net price, catalog and specification. Though this method, buyers are able to get up to date price in real-time.
4. Comparison with historical prices – The comparison can be achieved by comparing the proposed price with the historic quoted or purchased price. Few things to
5. Use of independent cost estimates – When the other (above) price analysis techniques are not appropriate, the supply manager must use the independent cost estimate to comparison.

Competing successfully in the modern world is not simple as getting order from customer and placing order to supplier. In the modern world, one must know the customer, what is being purchased, where is it being shipped? Who the end user is? What is the end product? Additionally, one must also know where the suppliers are? Where the material comes from? How their suppliers manufacture the product? Where is it being stored?. As the global competition increase, business must pay closer attention to both customers and the suppliers. In the paragraphs following, I have selected Wal-Mart and Dell as an example on how they are achieving competitive advantage.

Wal-Mart

Wal-Mart is the largest retailer in the world. The first store was opened in 1962 by Sam Walton. Today, Wal-Mart has well over 3,000 stores worldwide. “The emphasis on customer satisfaction and always low prices has resulted in Wal-Mart becoming the world’s largest retailer with annual revenue exceeding $218 billion” (Principles of Supply Chain Management, Pg 124) One of the competitive advantages Wal-Mart has is ability market and sell mass volume of products at five to ten percent lower than competition. This may be disadvantage for the Wal-Mart’s supplier for selling at very low cost. However, due to tremendously high sale volume, the supplier makes up the profit. Wal-Mart uses method of collaborative planning, forecasting and replenishment (CPFR). The CPFR allowed Wal-Mart to move toward just-in-time (JIT) system which save Wal-Mart enormous amount of money and same can be said for its suppliers. Wal-Mart also implemented data warehouse program. This program enables Wal-Mart to store point of sale data and shipments data. As Wal-Mart grew, “warehouse was expanded to include much more data such as inventory, forecasts, demographic, markdown, returns and market basket by item by store, and by day” (Principles of Supply Chin Management, Pg 124). The warehouse not only contains data of Wal-Mart but its competitor as well. One of the key elements here is that these data was accessible by Wal-Mart employees and over 3000 approved supplier as well. End result is that both Wal-Mart and its suppliers were able to save million of dollars on inventory and reduce cost by forecasting accurately. As a result of data mining software, Wal-Mart has achieved increased accuracy in forecasting process and competitive advantage in the retail industry.

Dell

Dell Computer Corporation was founded in 1984 and has achieved record sales and profit growth in the past 22 years of operation. The secret to Dell’s success is their direct model which has focus on low cost, direct customer relationship, and virtual integration. This gives them competitive advantage in modern world business. Dell’s focus is direct sales to consumers and companies over the phone and through Internet sales. Dell does all its business via online. Dell gives its customer custom website with standard configured product along with pre agreed prices. This makes easy for many companies to procure product that they need. Dell also offers same type of external website to it supplier. Through custom built website, suppliers can see Dell’s inventory and orders in real time data. This allows supplier to forecast accurately and maintain inventory and the production. This cuts down on inventory and lead time for both Dell and supplier. This is method is known as just-in-time.

In summary, Achieving competitive advantage is not easy. It takes efforts from all sides. Innovation, use of advance technology, understanding demand, forecasting, and implementing strategic plan are key to successful competitive advantage. Wal-Mart and Dell has shown that competitive advantage can lead to successful business. In final words, Supply Chain is advantage and operational necessity.

References

Principles of Supply Chain Management (1st ed.) J.D. Wisner, G. Keong Leong, and Keah-Choon Tan Thomson/Southwestern, 2005 Mason, OH

photo credit: tiny dragons

Organizations today are in tremendous pressure due to constant technological improvement and global competition. As a result, organizations often encourage changes, innovation, streamline effective operation methods, cost saving, and improve profit margins. However, these changes are not easy to accomplice. This is where Supply Chain Management comes in play. What is SCM? Why is it important to organization?

Supply chain management can sound confusing to those unfamiliar with the concepts and terminology. These articles will help you become more familiar with the topic of supply chain management and the concepts and ideas that are used.

Lean Supply Chain Management
Lean supply chain management should be considered by businesses who want to streamline their processes by eliminating waste and non-value added activities. Companies have a number of areas in their supply chain where waste can be identified as time, costs or inventory. Lean supply chain management can improve the company’s competitiveness as well as improve the company’s overall profitability.

Introduction to Supply Chain Management
Supply chain management can be simple or complex, but all supply chains contain similar elements and are managed in a similar way. This article will give you a introduction to these concepts. Firstly, you will learn about the elements that define a company’s supply chain. Secondly, you will discover the three levels of management that are required to efficiently operate the supply chain.

SCM has many definitions. Base on my experience at ABB as buyer, one of my definitions of SCM is that, SCM get involved in everything from the point order is received to the point order is ship and delivered to customer. “The Institution for Supply Management describes supply chain management as the design and management of seamless, value-added process across organizational boundaries to meet the real needs of he end customer” (Principle of Supply Chain, Pg 7). SCM is an integration of activities that procure materials, transform them in to intermediate good and final products, and deliver them to customers. This includes transportation providers, suppliers, warehouse, order fulfillment, inventories, and purchasing. Some of the other tasks involve cutting cost and sourcing. Simply speaking, the life cycle of SCM includes plan, buy, make, move and sell.
In traditional methods of business, one company did all the work. Work meaning processing raw materials all the way through delivery of the final product. Nowadays, thanks to technological improvement in communication and concern over cost saving, many companies are adapting a new method of doing business which is integration of multitude of companies.

SCM is important to today’s global environment because it helps companies reduce cost and operate most efficiently. Companies are no longer bounded by local suppliers and customers. Companies can take advantage of low cost manufacturing, material, and labor provided by other countries worldwide. As a result of this global environment, there is a huge supply and demand. This means companies have to keep up with the market and what their customers want and/or need.

Global company such as ABB has very effective Supply Chain. To give little background on ABB, was formed with merger of two European companies. Asea was founded in 1890. Brown Boveri which was founded in 1891. In 1987 both of these companies merged resulting in creation of ABB. The creation of ABB was unique as the reconstruction and organizing of the company globally was a great challenge. Today ABB generate revenue of more than 20 billion dollars and employs over 100,000 people around the world. Focusing on ABB’s SCM, it started out as purchasing department performing typical task to keep the operation moving. However, as ABB grew so did the purchasing and transformed to SCM. Ever since creation SCM, ABB has had good successes. On the other hand, even with the complex organization, buyers through out the world, SCM has proven to be very successful. One of the main focus of SCM is sourcing, cost saving, as well as risk evaluating. SCM has contributed many successful strategic plans. SCM at ABB strives to reduce cost by streamlining effective purchasing methods along with inventory control. It also ensures proper relationships with suppliers which makes doing business more effective. SCM allows one to be more competitive in market by planning, organizing and implementing sourcing programs globally.

In Summary, SCM is an important part of organization as a result of their involvement in many areas. SCM not only reduces cost but it also increases profitability. SCM not only involved on day to day operation but it also implements strategic plans in many areas that allow organization to compete in market place and succeed.

References
Principles of Supply Chain Management (1st ed.) J.D. Wisner, G. Keong Leong, and Keah-Choon Tan Thomson/Southwestern, 2005 Mason, OH

Make or buy can be challenging task for organization. Although it requires a lot of information, the right decision can help the organization bottom line tremendously. According to the text book author of text book, World Class Supply, following outline provide good guide when considering buy vs make.

To Make:
1. Desire to integrate plant operations
2. Cost consideration
a. Direct labor cost
b. Delivered purchase material cost
c. Inventory carrying cost
d. Overhead cost
e. Managerial cost
f. Capital cost
3. The productive use of excess plant capacity to help fix overhead
4. Design secrecy required
5. Unreliable suppliers
6. Desire to maintain a stable work force

To Buy:
1. Small volume requirements
2. supplier knowledge
3. desire to maintain stable work force
4. purchasing and inventory
5. Cost considered
a. Price of purchased parts
b. Freight or Transportation cost
c. Receiving and inspection costs
d. Purchasing cost
e. Other cost relates to quality or service
6. desire to maintain multiple-source policy.

b. Idle Time – This waste is a sum of all time wasted while the operator watch a machine run or more than normal time is taken to fix the part while the machine is running idle.
c. Delivery – The idea here is to get the part through assembly at minimum involvement. Each time the part is touch it added cost without any value being added.
d. Work Itself – the operation typically wants automated/efficient setup, however, many manufactures treat the time of molding changing setup as break time from production, a time that the staff take as break can be wasteful.
e. Inventory – Inventory is considered waste because it can add carrying cost and material handling cost. Excessive inventory even cost money should the part were to get obsolete and taxes or put negative cash flow.
f. Operator Movement – according to text book “any movement in which the operator does not add value to the part or service is a waste.”
g. Rejected Parts – rejected parts are considered waste because it can cost money and also tie up time that could have been used to make a good part.]]>

photo credit: chandamon618

Competing successfully in the modern world is not simple as getting order from customer and placing order to supplier. In the modern world, one must know the customer, what is being purchased, where is it being shipped? Who the end user is? What is the end product? Additionally, one must also know where the suppliers are? Where the material comes from? How their suppliers manufacture the product? Where is it being stored? As the global competition increases, business must pay closer attention to both customers and the suppliers. More importantly, this brings us to bigger question. What does future hold for purchasing? What is the future trend in Supply Management? In paragraph to follow, future trends in purchasing are covered.

E-business

People are becoming dependent more-and-more on computer these days. Computers are being used for all aspect of people’s life from personal to business. Further more, recent trend in use or perhaps addiction to internet has gain more attention. Large portion of population worldwide is hooked to internet for popular increase in demand for emails, communication, entertainment and even doing business. For this new trend in addiction to internet, many organizations constantly making improvement to its ERP system and even implementing SAP system in hope of creating efficiency and business solution in hope of improvement to bottom line.

Partnership

Many companies are realizing the limitation of independent purchasing, and turning to partnership. Through partnership, organization will be able to collaborate as such that they will benefit greatly, and they will be more cost effective than being isolated. Partnership cans also giver organization the competitive advantage. As the global sourcing increasing it is only make sense to partner up which can ensure that both organization are working toward same vision and goal.

Green Purchasing

In recent year the attention to green procurement has been rising. Although there are some barriers such as product premium cost, lack of time or knowledge, many organizations are still adapting green policy as a result of concern over the future world, environment, and social responsibility. According to Sustainability Purchasing Network, the green purchasing is a purchasing that has following environmental benefits: 1) Reduce and prevent waste, 2) Reduces resource use, 3) Reduce pollution and toxins, 4) Reduce greenhouse gas emissions. As more companies play more active role in protecting the environment, the green purchasing trend is just the beginning.

Environmental & Social Consideration

Corporate Social Responsibility is additional corporate role beyond making money. It includes legal, ethical, and voluntary responsibilities. Legal responsibility of business is to obey local, federal, and international law. Ethical responsibility of business is to do what is right, just, and fair. Voluntary responsibility of business is to participate and support community. Basically, organization should consider human needs in their business world in same way they consider business needs in economy.

Many people believes that big company should do more than just gives community money to solve social problems. They think that big company should get involve, participate in social problems, and perhaps even help solve those problems. In my opinion, I also believe that companies should participate in community and take social responsibility. I also feel that, its not just responsibility of company but all people as well. Let face it, all people uses resources from around the world so why not take care of planet and the environment by taking social responsibility as employee of the company as well as on personal level.

Improving the bottom line is never ending game for executives. There is enormous pressure from internal and external, making organization to seek out innovated ways to reduce cost and improve profit margins. This is not easy. It takes efforts from all sides. Innovation, use of advance technology, understanding demand, forecasting, and implementing strategic plan, global sourcing are key to successful competitive advantage and it encourage new wave in future trend in purchasing. In final words, Supply Chain must force them self to adapt to ever going changes and seek out new trend in purchasing.

References
Sustainability Purchasing Trends and Drivers (2008) Retrieved on July 20, 2008 from http://www.buysmartbc.com/UserFiles/File/SPN-IC-SustainabilityPurchasingT rendsPaperDec07Final.pdf

Negotiation is important for all businesses – especially for large global companies such as ABB. ABB was formed by the merger of two European companies: Asea which was founded in 1890, and Brown Boveri which was founded in 1891. In 1987 both of these companies merged creating ABB. As a result ABB is a global power and automation technology company which has been in business for more than 100 years. Today ABB generates revenue of more than 29 billion dollars annually and employs over 115,000 people around the world. ABB is headquartered in Zurich, Switzerland and is present in over 100 countries. Regardless of its size and its presence, ABB faces negotiation challenges in competitive business world. The two countries in particular, Sweden and India are worth reviewing its ethnicity when faced with negotiation challenge.

ABB is headquartered in Sweden. Sweden is one of many country located in Europe. It is a member of European Union since 1995. Sweden is fourth larges country in Europe consisting population of 9 million. “The indigenous population of Sweden is comprised of Swedes with Finnish and Sami minorities. Foreign-born or first-generation immigrants are typically of Finnish, Danish, Norwegian, Greek and Turkish ethnicity.” (Kwintessential, 2008) The majority of Sweden religion is Lutheran, about 87% of population. The remainders of 13% are catholic, Muslim, Orthodox, Jewish, and others. In Sweden, the business world is pretty formal and serious. When negotiating, ensure that one perform firm handshake and maintain eye contacts. Another thing to consider is to address the host with their appropriate business title. One of the tactics to use when dealing with Swedish is to maintain cool and control discussion. It is also very important not to demonstrate any emotions as it will be perceived negative. ABB is also located in India. However, for one of major component, India being the low cost country, it might just offer potential supplier ABB is looking for. India is a country with many culture and diversity. It has many languages with population of 1.1 billion, making it a second most populated country in world. According to the World Factbook, its ethnicity is Indo-Aryan 72%, Dravidian 25%, Mongoloid and other 3%. The religion break down is “Hindu 80.5%, Muslim 13.4%, Christian 2.3%, Sikh 1.9%, other 1.8%, unspecified 0.1%” (The World Factbook, 2008). In India, the business world is very hierarchical. Typically, the decisions are not made by the middle managers. The decisions are usually made by executive in highest level. One of the tactics that can be used when negotiating with Indian is go straight to decision maker. This will save time not dealing with middle managers. “Harmony about the parties is essential for successful negotiation. The use of aggressive tactics, confrontation or pressurizing to reach a decision is counterproductive.” (Global Marketing, 2008) Indians also do not give straight forward “no” as they find it impolite, they normally go around in creative ways instead of strait forward “no”. Indians also shake their head left and right when talking, this is simple there gesture indicating that they understand the issue and this gesture have no negative meaning as one would think form other nation. According to Geert Hofstede Cultural Dimensions, there are five indexes that measure difference in cross culture across different countries. The indexes are Power Distance, Individualism, Masculinity, Uncertainty Avoidance, and Long Term Orientation.

In comparison between India and Sweden, Indian’s Power Distance is very high compare to Sweden. The Individualism index shows that Indians are more lean toward individual where as Swedes are more team oriented. This means that Sweden normally makes decisions and consensuses are made across the team where as the In India, the decisions are usually left for higher level. The India has Masculinity index of 56, making it the third highest ranking in Hofstede dimension where as Sweden raked pretty normal. This is obvious that Indians have large gap between values of men and women where as Sweden are fairly equal. Indians are also more long term oriented where as Swedes are averages. In reviewing both countries, Sweden and India, they are very culturally diverse. This is important because, culture influences the negotiation. As mentioned earlier, Sweden normally makes decisions and consensuses are made across the team where as the In India, the decisions are usually left for higher level. Another thing to keep in mind is that India values men more then women so it would be good effective tactic for Swedes to select men to negotiate.

In conclusion, negotiation is perhaps important element of successful business practice at ABB. However, when dealing with negotiation across countries, organization should pay more attention to culture and ethnicity as it has great influence on negotiation. As for Sweden and India, both countries are very culturally diverse with its own unique characteristic. Depending on the situation, utilizing appropriate negotiating tactics can be very beneficial in effective negotiation.

References

Kwintessential (2008). Cross Cultural Solutions, retrieved on July 20, 2008 from http://www.kw intessential.co.uk/resources/global-etiquette/sweden.html

Global Marketing (2008) Retrieved on July 20, 2008 from http://www.globalnegotiator.com The World Fact book (2008) Retrieved on July 20, 2008 from https://www.cia.gov/libra ry/publications/the-world-factbook/print/in.html

Geert Hofstede (2003) Cultural Dimension, retrieved on July 20, 2008 from http://www.geert-hofstede.com/hofstede_dimensions.php?culture1=86&culture2=42#compare