Question

Discuss the role that duties and taxes play in logistics supply chain design. What are some of the unique characteristics regarding the role of duties and taxes.

Answer 1

With globalization of world economy,supply chain is the core of the business of any firm.Be it suppliers,total cost ,distribution methods or business strategy the role of duties and taxes are increasingly gaining importance among other features.We would shortlist certain roles wherein duties and taxes in the logistics/customs design plays an important part:

1)Competition/Product Market Fit:

Whenever a new market penetration strategy is being formulated the role of duties and taxes in the final product of the price assists in implementing the business decision of the product market fit in the long run and with advantage of favorable tax laws or trade agreements can give an edge over the competition

2) Strategic Business Management:

With a clear formulation and practices of duties and taxes in separate markets capacity planning can be easily done which further assists in Strategic Business Management

3) Role in Finance & Accounting:

When the duties and taxes are being constantly changed and implemented in newer and neutral markets ,the supply chain design hence can give a mirror view of company's financial strengths and weakness and thus attracts better informed investors .

4) Cost Leadership and Savings:

The duties and taxes by incorporating local tax regimes which are favorable than home business can give a cost saving edge to the business further assisting in supply chain management

With the above account we formulate a unique bird's eye view of the role of duties and taxes in logistics supply chain design encompassing all the major departments of an organization.