class session 18

International BusinessInternational Business

Chapter EighteenChapter Eighteen

Global Manufacturing and Global Manufacturing and Supply Chain ManagementSupply Chain Management

Inte

rnatio

nal B

usin

ess 1

0e

Danie

ls/Radebaugh/S

ulliv

an

2004, Prentice Hall, Inc 18-1

PresentationsPresentations

WednesdayWednesday• Global sourcingGlobal sourcing lecturelecture• Laura Janakes – Laura Janakes – BrazilBrazil• Alex Oroscp - Alex Oroscp - ArgentinaArgentina• Derick Santos – Derick Santos – PhilippinesPhilippines• Maryann Nguyen – Maryann Nguyen – ThailandThailand• Ferry The & Alamanda Budiomo - Ferry The & Alamanda Budiomo -

IndonesiaIndonesia If time –If time – Wood on Wood on World BankWorld Bank

Next Monday Next Monday • Wei Yu, Chun Wong, Jinping Yao, Chun Li Wu – Wei Yu, Chun Wong, Jinping Yao, Chun Li Wu –

ChinaChina • Chako Chavez – Chako Chavez – JapanJapan • Kenny Sidhu, Harpreet Singh – Kenny Sidhu, Harpreet Singh – IndiaIndia• Shams Hameed – Shams Hameed – PakistanPakistan• Chris Menor – Chris Menor – TurkeyTurkey• Anna Szlachta – Anna Szlachta – Poland Poland • An Nguyen, Sharan Kaur, Roland Celanes – An Nguyen, Sharan Kaur, Roland Celanes –

IrelandIreland• Lorie Nguyen - Lorie Nguyen - FranceFrance • Maria Abad, Rosalina Lopez – Maria Abad, Rosalina Lopez – MexicoMexico

Presentation structurePresentation structure

Length - WednesdayLength - Wednesday• 6-10 minutes – 1 or 2 people6-10 minutes – 1 or 2 people• Up to 12 minutes – 3 people Up to 12 minutes – 3 people

Length – Length – next Mondaynext Monday• 1 person – 6-8 min MAXIMUM1 person – 6-8 min MAXIMUM• 2 people – 6-12 min MAXIMUM2 people – 6-12 min MAXIMUM• 4 people – 18 min MAXIMUM4 people – 18 min MAXIMUM

This means you This means you won’twon’t cover cover everything importanteverything important• Don’t try to cover everything and talk Don’t try to cover everything and talk

fast to get through it. fast to get through it. • Pick just a few things that are important Pick just a few things that are important

to to youyou about the country and its about the country and its economyeconomy

You You maymay talk about… talk about…

• The economic environmentThe economic environment How do people live? How do people live? What is GDP per capita (compare it to the US)What is GDP per capita (compare it to the US) How does GDP per capita level affect life? How does GDP per capita level affect life?

• The political environmentThe political environment How is the country/region governed?How is the country/region governed?

• Something of the cultural environmentSomething of the cultural environment You can’t You can’t summarizesummarize the culture; the culture;

just say one or two things that strike just say one or two things that strike you as importantyou as important

• The country or region’s role in international The country or region’s role in international businessbusiness

What does the country or region What does the country or region produceproduce??

I’ll allocate extra credit based on how I’ll allocate extra credit based on how interestinginteresting the presentation is to the the presentation is to the classclass

You lose points for being poorly You lose points for being poorly prepared prepared • Saying ‘um, um, um’ Saying ‘um, um, um’

Try to talk to the class, rather than Try to talk to the class, rather than reading reading • If you read, try to read so your friends will If you read, try to read so your friends will

be interested be interested

Supply Chain TermsSupply Chain Terms

Supply chainsSupply chains – the coordination of – the coordination of materials, information, and funds from the materials, information, and funds from the initial raw material initial raw material suppliersupplier to the to the ultimate ultimate customercustomer

LogisticsLogistics (materials management) – that (materials management) – that part of the supply chain process that part of the supply chain process that plans, implements, and controls the plans, implements, and controls the efficient, effective efficient, effective flow and storageflow and storage of of goods, services, and related informationgoods, services, and related information

18-3

Factors Managers Must ConsiderFactors Managers Must Consider

Efficiency Efficiency - reduction of - reduction of manufacturing and transport costmanufacturing and transport cost

Dependability Dependability - degree of trust in a - degree of trust in a company’s products and its delivery company’s products and its delivery promisespromises

QualityQuality - performance reliability, - performance reliability, service quality, speed of delivery, service quality, speed of delivery, and maintenance qualityand maintenance quality

18-5

Factors ManagersFactors ManagersMust Consider, con’tMust Consider, con’t

FlexibilityFlexibility - ability of the production - ability of the production process to make different kinds of process to make different kinds of products and to adjust the volume of products and to adjust the volume of outputoutput

Innovation Innovation - ability to develop new - ability to develop new products and ideasproducts and ideas

18-6

18-14

Manufacturing ConfigurationsManufacturing Configurations

Centralized manufacturingCentralized manufacturing offering a offering a selection of standard, lower-priced selection of standard, lower-priced products to different marketsproducts to different markets

Regional manufacturingRegional manufacturing to serve to serve customers within a specific regioncustomers within a specific region

Multi-domestic manufacturingMulti-domestic manufacturing (market (market expansion) in individual countries as their expansion) in individual countries as their demand becomes significant so demand becomes significant so manufacturing is closer to customers and manufacturing is closer to customers and meeting local needsmeeting local needs

18-7

Supplier NetworksSupplier Networks

Companies can manufacture parts Companies can manufacture parts internally or purchase them from internally or purchase them from external manufacturersexternal manufacturers

““make or buy”make or buy” decision decision OutsourcingOutsourcing is the process of a is the process of a

company having inputs supplied to it company having inputs supplied to it from outside suppliers for the from outside suppliers for the production processproduction process

18-13

Global Component NetworkGlobal Component Network

18-15

Advantages of Global SourcingAdvantages of Global Sourcing Reduce Reduce costscosts due to less expensive labor due to less expensive labor Improve qualityImprove quality Increase exposure to worldwide Increase exposure to worldwide

technologytechnology Strengthen reliability of supply by Strengthen reliability of supply by

supplementing domestic with foreign supplementing domestic with foreign supplierssuppliers

Gain access to materials available only Gain access to materials available only abroadabroad

Establish Establish presencepresence in a foreign market in a foreign market Satisfy “offset requirements”Satisfy “offset requirements”

18-16

Chapter ObjectivesChapter Objectives Describe different dimensions of global Describe different dimensions of global

manufacturing strategymanufacturing strategy Examine elements of global supply chain Examine elements of global supply chain

managementmanagement Show how quality effects global supply chain Show how quality effects global supply chain Illustrate how supplier networks functionIllustrate how supplier networks function Explain how inventory management is a key Explain how inventory management is a key

dimension of the global supply chaindimension of the global supply chain Present different alternatives for transporting Present different alternatives for transporting

products along the supply chain from suppliers to products along the supply chain from suppliers to customerscustomers

18-2

18-12

Studying Supply Chain AlternativesStudying Supply Chain Alternatives

Customer requirementsCustomer requirements Plant and distribution center network designPlant and distribution center network design Inventory managementInventory management Outsourcing and 3Outsourcing and 3rdrd-party logistics relationships-party logistics relationships Key customer and supplier relationshipsKey customer and supplier relationships Business processesBusiness processes Information systems Information systems Organizational design and training requirementsOrganizational design and training requirements Performance metricsPerformance metrics Performance goalsPerformance goals

18-8

QualityQuality

Quality is the ability to meet Quality is the ability to meet or exceed the expectations of or exceed the expectations of the customerthe customer• Conformance to specificationsConformance to specifications• ValueValue• Fitness for useFitness for use• Support provided by the Support provided by the

companycompany• Psychological impressions Psychological impressions

(image)(image)

18-9

Quality TermsQuality Terms Acceptable Quality Level (AQL) premise Acceptable Quality Level (AQL) premise

allows an acceptable level of bad qualityallows an acceptable level of bad quality Total Quality Management (TQM) is a Total Quality Management (TQM) is a

philosophy to eliminate all defectsphilosophy to eliminate all defects• TQM stresses:TQM stresses:

Customer satisfactionCustomer satisfaction Employee involvementEmployee involvement Continuous improvementContinuous improvement

• TQM focuses on:TQM focuses on: BenchmarkingBenchmarking Product and service designProduct and service design Process designProcess design purchasingpurchasing

18-10