15 and 15.1: Strategy, Position and Supply Chain Management Flashcards
Why are global production and supply chain management decisions critical for companies?
These decisions are critical because they determine the efficiency and effectiveness of a company’s operations internationally, impacting costs, quality, flexibility, and responsiveness to market changes.
What factors affect the choice of location for production activities?
The choice of location for production activities is affected by country differences in
production technology,
economic conditions,
factor costs,
tariffs,
and political and economic stability.
How can the role of foreign subsidiaries in production be enhanced?
The role of foreign subsidiaries can be enhanced as they accumulate knowledge and experience, contributing to improved operations and strategies within the global company.
What factors influence whether to source supplies internally or from foreign suppliers?
Decisions on sourcing involve considering control versus cost efficiency, with internal sourcing providing more control and outsourcing often being more cost-efficient.
What is required to efficiently manage a global supply chain?
Efficient global supply chain management requires the integration and coordination of all aspects of the supply chain, from sourcing and production to distribution and customer service, focusing on total cost reduction and value addition.
How should companies think about production and supply chain management redundancies?
Redundancies in production and supply chain management are important for risk diversification, especially if operational activity is concentrated in potentially unstable regions.
What is the significance of total cost focus in supply chain management?
A total cost focus emphasizes the lowest total cost to the customer, incorporating all costs, including production, logistics, purchasing, and assembly, across the entire supply chain.
What is the relationship between production and supply chain management?
Production and supply chain management are closely linked as both involve the coordination of logistics, purchasing, operations, and market channel activities from raw material to the end-customer, ensuring efficient and timely production activities.
Why is quality control important in the supply chain?
Quality control is crucial for eliminating defective materials and ensuring the reliability of the finished product, which reduces costs related to rework, scrap, and warranties, and enhances overall supply chain reliability.
What is Total Quality Management (TQM)?
TQM is a philosophy that emphasizes process-based quality standards and the elimination of defects throughout the production process, with a focus on continuous improvement and the involvement of all employees.
How does Six Sigma relate to TQM?
Six Sigma is a methodology that builds upon TQM principles, aiming to reduce defects and improve quality by using statistical methods to achieve near-perfect production processes.
What are the strategic objectives of supply chain management?
The strategic objectives include ensuring low total costs, improving product quality, accommodating demands for local responsiveness, and being able to respond quickly to shifts in customer demand.
Why must production and supply chain management accommodate local responsiveness?
Accommodating local responsiveness is necessary due to differences in consumer tastes, infrastructure, distribution channels, and governmental demands, which may require decentralized production activities.
What is the significance of time-based competition in supply chain management?
Time-based competition has become more important as consumer demand changes rapidly. The ability to quickly adapt production and supply chain processes can provide a firm with a competitive advantage.
