Bài giảng International Business - Chapter nineteen: Global Operations and Supply Chain Management

Learning Objectives Understand the concept of supply chain management Recognize the relationship between design and supply chain management Describe the five global sourcing arrangements Appreciate the importance of added costs of global sourcing Understand the increasing role of electronic purchasing for global sourcing Understand the just-in-time (JIT) production system and potential problems with its implementation

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Global Operations and Supply Chain ManagementMcGraw-Hill/IrwinInternational Business, 11/eCopyright © 2008 The McGraw-Hill Companies, Inc. All rights reserved.chapter nineteenLearning ObjectivesUnderstand the concept of supply chain managementRecognize the relationship between design and supply chain managementDescribe the five global sourcing arrangementsAppreciate the importance of added costs of global sourcingUnderstand the increasing role of electronic purchasing for global sourcingUnderstand the just-in-time (JIT) production system and potential problems with its implementation3Chapter ObjectivesUnderstand synchronous manufacturing and customizationComprehend the concept of Six Sigma systems and their applicationExplain the potential of global standardization of production processes and procedures, and identify impediments to standardization effortsKnow the two general classes of activities in manufacturing systems, productive and supportive, that must be performed in all manufacturing systems4Supply Chain ManagementProcess of coordinating and integrating the flow of materials, information, finances, and services within and among companies in the value chain from suppliers to the ultimate consumer5Lower Costs/Improved ProductsDesired results may be obtained throughImprovement within existing operationsOpening new operationsfinding outside sources for inputsOutsourcingHiring others to perform some of the noncore activities and decision making in a company’s value chain, rather than having the company and its employees continue to perform those activitiesCombination of above6Global Supply Chain ManagementInvolves total systems approach to managing flow ofMaterialsInformationFinancesServices7Supply Chain Network: A Hypothetical Example of an American Laptop Computer Company8Design of Products and ServicesDesign has fundamental relationship with type of inputs requiredImportant consideration is extent to which products and services will be standardized or adaptedOver-the-Wall approach is traditional approachSequential stepsAlternative approach is cross-functional participationMay involve customers9OutsourcingIncreasingly common optionRelocating some or all of a business’s activities or processes outside of the companyFocus on core competenciesLeverage skills of other companiesReduce costsImprove flexibility and speed of responseEnhance qualityCan outsource in same country or another countryOffshoring: a foreign locationChoices increased byGlobal access to vendorsFalling costs of interactionsImproved information technology and communication10Global SourcingConsiderationsCostsControlExpertise DistanceLanguagesLaws and regulationsBegin simpleThen move to complex11Global SourcingThe Lure of Global SourcingSuppliers with improved competitiveness CostQualityTimelinessSuppliers in less developed countries with low-cost laborAttractive for labor-intensive products with low skill requirements12Global Sourcing ArrangementsArrangement that provide a firm with foreign productsWholly owned subsidiaryOverseas joint ventureIn-bond plant contractorOverseas independent contractorIndependent overseas manufacturer13Use of Electronic Purchasing for Global SourcingGrowth of electronic procurement exchangesIdentify potential suppliers or customersFacilitate efficient and dynamic interactions among prospective buyers and suppliersRecognize strategic function of purchasing14Global Electronic ProcurementElectronic Exchange OptionsCatalog purchasesPermits buyers and suppliers to interact through a standard bid/quote systemFacilitates obtaining letters of credit, contracting for logistics and distribution, and monitoring dailyBenefitsCut costs and invoice and ordering errorsImprove productivity and internal purchasing processesReduce trading cycle time, paperCompare bids15Global SourcingProblemsUnanticipated added costsCurrency fluctuationsTransportation cost increasesE-procurement exposes business systems to wide range of potential security issues16Added CostsInternational freight, insurance and packingImport dutiesCustomhouse broker’s feesTransit or pipeline inventoryCost of letter of creditInternational travel and communication costsCompany import specialistsReworking of products out of specification17Advanced Production TechniquesSystems to improve competitivenessJust-in-time supply chains (JIT)Highly synchronized manufacturing systemsMass customizationSix Sigma18Japan’s Use of JITRequirements to operate without inventoryComponents defect-freeComponents delivered to each point at specified time Sellers maintain inventory of finished productsProcess time reducedManufacturers simplified product linesSuppliers cooperateDesigners, managers, purchasing people and marketers work as a team19Total Quality ManagementSystem in which organization is managed so that it excels on all dimensions of product and service that are important to the customerTQM uses Quality CirclesSmall work groups meet to discuss ways to improve functional areas and product quality 20Problems with JIT in U.S.Failure to realize JIT is a total system, includes TQMCultural differences in U.S. workersHighly specialized workNo company loyaltyFailure to train and integrate suppliersJIT restricted to operations that produce same parts repeatedly If one operation stops, entire production line stopsAchieving a balanced system difficult: production capacities differ among machinesNo allowances for contingenciesMuch trial and error are required to put system into effect21Advanced Production TechniquesSynchronous ManufacturingManufacturing system with unbalanced operations that emphasizes total system performanceMass CustomizationFlexible manufacturing system to produce customized products and services Six SigmaBusiness management process for reducing defects and eliminating variation22LogisticsMovement of materialsMust interface with sourcing , manufacturing, design, engineering and marketingPackaging and transportation requirements can greatly increase logistics costsMany companies outsource logistics23Standards for Global OperationsStandardsDocumented agreements on technical specifications or other precise criteria used consistently as guidelines, rules, or definitions of the characteristics of a product, process, or serviceISO 9000 (International Organization for Standards) most used in Europe, for quality ISO 9001 most comprehensive standard 24Impediments to StandardizationEconomic ForcesWide range of market sizesCost of productionBackward vertical IntegrationArrangement in which facilities are established to manufacture inputs used in the production of firm’s final products25Impediments to StandardizationCultural ForcesDeveloping countries may lack skilled workersResources directed to professional vs. technical educationUse of specialized machines favoredAbsenteeism 26Impediments to StandardizationPolitical ForcesCountry needs new jobsGovernment insists on most modern equipment27Some Design SolutionsHybrid DesignHybrid capital-intensive mixed with labor intensive processes when abundant unskilled laborIntermediate TechnologyProduction methods between capital- and labor-intensive methods28Local Manufacturing SystemCommonly scaled-down version of that found in the parent companyHorizontal/Vertical integrationVertical more traditional Horizontal less prevalent in foreign subsidiaries29Design of the Manufacturing SystemManufacturing system:Functionally related group of activities for creating valueFactors involved in efficient operationPlant locationPlant layoutMaterials handlingHuman element30Design of the Manufacturing SystemPlant locationAffects both production and distribution costsNeeds labor, raw materials, water and powerMust locate in export processing zonesPlant layoutArrangement of machinery, personnel and service facilitiesMaterials HandlingCareful planning can save production costsPoor handling leads to excessive inventory, idle machinery, late deliveries and damaged goodsHuman elementEffectiveness depends on peoplePeople are affected by the system31Operation of the Manufacturing SystemManufacturing system has two classes of activitiesProductive activitiesSupportive activities32Operation of the Manufacturing SystemObstacles to Meeting Manufacturing StandardsLow outputInferior qualityExcessive manufacturing costs33Obstacles to Meeting Manufacturing StandardsLow OutputSupplier problems, absenteeismPoor coordination of production schedulingCulture differences,attitudes, educational levels, planningInferior Product QualityGood quality is relativeLack of maintenance and operating skillsExcessive Manufacturing CostsLow outputBudget problemsOveroptimistic sales forecastSupply problems, supplier, water/powerOverstocked inventoryResistance to lay off workers34Supportive ActivitiesQuality controlInventory controlPurchasingMust consider costsDevelop suppliersKnow import procedures and key government officialsMonitor foreign exchange35Supportive ActivitiesMaintenanceGoal to ensure acceptable level of productionTwo alternativesPreventiveBreakdownTechnical FunctionProvides operations with manufacturing specificationsChecks quality of inputs and finished productsInfluential in selecting sources of supply36