Chapitre 17

Question 1

2 value creation activities (Give def.)

Answer 1

Production = Manufacturing –>includes activities involved in creating a product.

Supply chain management –> the integration & coordination of logistics, purchasing, operations, and market channel activities from raw material to the end-customer.

Question 2

What is logistics

Answer 2

implement and controle the effective flows and inventory of raw materials, component parts and products used in manifacturing

Question 3

What is supply chain

Answer 3

The flow of materials, info., money, and services from raw material suppliers, through factories and warehouses, to the end customers.

A supply chain also includes the organizations and processes that create and deliver products, information, and services to the end customers.

Question 4

Production and SCM strategic objective in international B.

Answer 4

(1) Lower the costs of value creation :
total cost of moving from raw materials to finished goods is as low as possible for the value provided to the end-customer
efficient logistics reduce amount of of inv in the system, incr. inv turnover

(2) add value by better serving customer needs :
increase product (or service) quality by establishing process-based quality standards and eliminating defective raw material, component parts, and products from the manufacturing process and the supply chain.

Question 5

Upstream and downstream def

Answer 5

Upstream supply chain is the portion of the supply chain from raw materials to the production facility; also called the inbound supply chain. ( Supplier)

Downstream supply chain is the portion of the supply chain from the production facility to the end-customer; also called the outbound supply chain. (wholesaler and retailer)

Question 6

Why improved quality control reduces cost? both are dependent why

Answer 6

1) Increasing productivity because time is not wasted producing poor-quality products that cannot be sold, leading to a direct reduction in unit costs.

2) Lowering rework and scrap costs associated with defective products.

3) Reducing the warranty costs and time associated with fixing defective products.

FIG 17.1 for help

Question 7

Total Quality management

Answer 7

TQM : management philosophy that takes as its central focus the need to improve the quality of a company’s products and services.
Not so important :
Invented by Deming
Deming suggested that the quality of supervision should be improved by allowing more time for supervisors to work with employees and by providing them with the tools they need to do the job. Deming also recommended that management should create an environment in which employees will not fear reporting problems or recommending improvements

Question 8

Principale tool used to increase reliability of product

Answer 8

SIX SIGMA (inspired by TQM) : Statistically based philosophy that aims to reduce defects, boost productivity, eliminate waste, and cut costs throughout a company.
Impossible to achieve perfection, but Six Sigma quality is the goal.
Especially helpful for structuring global processes for multinational corporations.

Question 9

International Standards
Hint : EU

Answer 9

ISO 9000:
Certification process that requires certain quality standards that must be met.

Question 10

Additional international objective of SCM and Production
hint ; locally implication:

Answer 10

Accommodate demands for local responsiveness. ( decentralize prod activities or implement flexible manufacturing process that enable firm to costumise product according to market)

Respond quickly to shifts in customer demand. (SCM and Prod are important as shifting to customer demand quickly give competitive advantage)

Question 11

3 main factors for where to produce see in these chapters .
(more detail questions on them follows in the next cards of the deck)

Answer 11

1) country Factors
2) technological factors
3) Production factors

Question 12

Explain country factors
give examples

Answer 12

Political and economic systems, culture, and relative factor costs differ from country to country.
Other things being equal, a firm should locate its various manufacturing activities where
the economic, political, and cultural conditions—including relative factor costs—are
conducive to the performance of those activities.
examples :
Location economies. (skilled labor pool and supporting industri)
Formal and informal trade barriers.
Transportation costs.
Rules and regulations.
Exchange rate movements.

Question 13

name the 3 Technological factors for production location caracteristics

Answer 13

Fixed cost

Minimum efficient scale

Flexible Manufacturing and mass customization

Question 14

Explain fixed cost

Answer 14

Fixed costs for setting up production plant.
E.g., 25 B$ to create a semiconductor chips plant.

Question 15

Minimum efficient scale role and implications

Answer 15

DEFINITION :
Manufacturing output increases, unit cost decreases. when it reaches a point where it does not decrease unit cost by alot u reach minimu efficient scale. see FIG 17.2

Refers to the level of output at which most plant-level scale economies are exhausted.

this is the scale of output a plant must operate to realize all major plant-level scale economies

ROLE :
when minimum efficient scale of a plant is large compare to global demande –> centralise production . because no point of doing manufacturs in multiple locations.
and vice-versa
if small compare to local demande –> multiple locations.

Question 16

Flexibility of technology

Answer 16

Flexible Mfg. or Lean Production aims to :

Reduces setup times for complex equipment.

Increases utilization of individual machines through better scheduling.

Improves quality control at all stages of manufacturing process.

Enables companies to customize products to demands of small consumer groups.

Enables companies to customize products for different national markets.

Flexible machine cells – various machinery grouped together.

Question 17

Production factors and the 3 main category discussed in this class

Answer 17

1) Product features
2) Locating production facilities
3) Strategic roles for production facilities

Question 18

(1) Production features and how it affects location decision

hint: 2 ways it does

Answer 18

Value-to-weight ratio : affects transportation cost

Universal needs : few national differences in consumer taste and preference –>small local responsiveness –> concentration of production in optimal location.

Question 19

(2) locating production facilities. Pros and Cons.
Centralized vs decentralized

Answer 19

Centralized :
○ High value-to-weight ratio
○ Low trade barriers
○ Economic and political differences substantially affect manufacturing in
various countries
○ High fixed costs, high MES
○ Product serves universal needs
Decentralized :
○ Low value-to-weight ratio
○ Higher trade barriers
○ Economic and political differences don’t affect manufacturing in various
countries
○ Lower fixed costs, lower MES
○ Product doesn’t serve universal needs

Question 20

(6) strategic roles for production facilities .
explain why it is important an the different roles of factories (just list them. more detail questions follow) .
TIP : OSSCOL (first letter of each)

Answer 20

Why important : Global learning—the idea that valuable knowledge does not reside just in a firm’s domestic operations; it may also be found in its foreign subsidiaries. foreign factories that upgrade their capabilities over time are creating valuable knoweldge that can make the whole firm benefit.

Roles:
Offshore factory.
Source factory.
Server factory.
Contributor factory.
Outpost factory.
Lead factory.

Question 21

What is offshore factory

Answer 21

developed and set up mainly for producing component parts or finished goods at a lower cost than producing them at home or in any other market.
minimal investment in tech and managerial ressources

Question 22

What is Source factory

Answer 22

drive down cost in the global supply chain .
managers of source factories have more of a say in certain decisions like purchasing raw material and component parts used in production.

Question 23

What is server factory

Answer 23

linked into the global supply chain for a global firm to supply specific country or regional markets around the globe.

Serves a specific regional market.

It serves the SC to overcome tariff barriers, reduce taxes, etc.

Question 24

What is contributor factory

Answer 24

also serves a specific country or world region.

Responsible for product and process engineering and development.

Often competes with global firm’s home factories for testing new ideas and products.

A standalone factory resources wise.

Question 25

what is an outpost factory

Answer 25

viewed as an intelligence-gathering unit. This means that an outpost factory is often placed near a competitor’s headquarters or main operations, near the most demanding customers, or near key suppliers of unique and critically important parts. It can act as a server or offshore factory

Question 26

what is a lead factory

Answer 26

Cutting edge production facility Creates new technologies, processes and products Located in high-skilled labor regions

Question 27

List hidden costs of foreign locations (4 in the book)

Answer 27

High employee turnover. Shoddy workmanship. (what da fuck is that) no standarts, shit execution, penis Poor product quality. Low productivity.

Question 28

Make-or-Buy decision definition list the two main drivers behind the decision

Answer 28

DEF : global firm is the strategic decision concerning whether to produce an item in-house (“make”) or purchase it from an outside supplier (“buy”). Drivers : Cost and production capacity

Question 29

Make decision favoring drivers (7 in the book) (UNDERSTAND MORE THAN KNOW BY HEART)

Answer 29

Quality control Proprietary Tech Limited suppliers excess capacity Having control continual supply assurance industry drivers

Question 30

Buy decision favoring drivers (UNDERSTAND MORE THAN KNOW BY HEART)

Answer 30

Multisource policy lack of expertise supplier competencies small volumes Inventory planning Brand preference Nonessential items

Question 31

Core activities performed by global logistics (list 5 )

Answer 31

1) Global distribution center management. 2) Inventory management. 3) Packaging and materials handling. 4) Transportation. 5) Reverse logistics.

Question 32

1) Global distribution center management. explain

Answer 32

Facility that positions and allows customization of products for delivery anywhere in the world. GDC are used by manufacturers, importers, exporters, wholesalers, retailers, transportation companies, and customs agencies to store products and provide a location where customization can be facilitated. The order-processing part of the order-fulfillment process.

Question 33

2) Inventory management. explain

Answer 33

How much inventory to hold, in what form to hold it, and where to locate it in the supply chain. Strategy must effectively trade off the service and economic benefits of making products in large quantities and positioning them near customers against the risk of having too much stock or the wrong items.

Question 34

3) Packaging and materials handling. explain the types and the fonctions

Answer 34

Types: Primary: holds the product. Secondary: Contains several primary packages. Transit: a Pallet holding a number of primary and secondary packages. Functions: Perform: being transported, stored, provide convenience. Protect: contain and preserve the product in a safe and secure manner Inform: instructions to use, product guarantee, info on services

Question 35

4) Transportation. explain and give drivers for cost

Answer 35

Represents the largest percentage of any logistics budget; refers to the movement of raw material, component parts, and finished goods throughout the global supply chain. Primary drivers: Distance. Transport mode (ocean, air, or land). Size of load. Load characteristics. Oil prices.

Question 36

5) Reverse logistics. explain

Answer 36

Process of planning, implementing, and controlling the efficient, cost-effective flow of raw materials, in-process inventory, finished goods, and related information from the point of consumption to the point of origin for the purpose of recapturing value or proper disposal. Goal is to optimize the after-market activity or make it more efficient.

Question 37

why reverse logistics ?

Answer 37

Customers may want to -Return products -Exchange products -Repair products -Claim warranty For company wants to -Recycle products -Manage unsold goods -Reuse packaging -Etc.

Question 38

NOT BY HEART (teacher said) !! Global Purchasing Strategic levels

Answer 38

Level 1: companies engage in domestic purchasing activities only. Level 2: companies engage in international purchasing activities only as needed. Level 3: companies engage in international purchasing activities as part of the firm’s overall SCM strategy. Level 4: global purchasing activities that are integrated across worldwide locations. (very sophisticated) Integration of purchasing strategies Level 5: engaging in global purchasing activities that are integrated across worldwide locations and functional groups. Integration of both strategies and all concrete details like supplier selection

Question 39

Beyond the domestic, international, and global purchasing strategies in levels I through V, purchasing includes a number of basic choices that companies make in deciding how to engage with markets.  LIST THE 3

Answer 39

1) “how to purchase.”  : The starting point is a choice of internal purchasing versus external purchasing—in other words, 2) “where to purchase.” : The next decision, in both internal and external purchasing, is to figure out 3) “types of purchasing” : This takes us ultimately to the (where and how) and the four choices for purchasing strategy: domestic internal purchasing, global internal purchasing, domestic external purchasing, and global external purchasing.

Question 40

Definition of outsourcing , insourcing, offshoring, offshore outsourcing , Nearshoring, Co-sourcing

Answer 40

outsourcing : corporation buy product or service from suppliers that produces somewhere else insourcing : produce product (revers of outsourcing) offshoring : Offshoring refers to the practice of relocating business processes, operations, or services to another country. This could involve establishing subsidiary branches, contracting with third-party service providers, or setting up partnerships with companies in foreign countries. Offshoring is typically done to take advantage of factors such as lower labor costs, favorable tax regulations, access to specific skills or expertise, or other economic benefits available in the destination country offshore outsourcing : Offshore outsourcing specifically refers to the practice of contracting out business functions or processes to external service providers located in other countries. It involves engaging third-party vendors or service providers to handle certain tasks or operations remotely. Offshore outsourcing can cover a wide range of activities, including IT services, customer support, manufacturing, back-office operations, and more. Companies often engage in offshore outsourcing to reduce costs, access specialized talent, improve efficiency, or focus on their core competencies. Nearshoring :transfer business or information tech processes to supplier in a nearby country. Co-sourcing : corporation uses both its own employees from inside the firm and external supplier to perform certain task.

Question 41

Just-in-time inventory definition and (pros and cons)

Answer 41

Inventory logistics system designed to deliver parts to a production process as they are needed, not before. pros : Speeds up inventory turnover. Reduces inventory holding costs. Frees up working capital. Boosts profitability. Can improve product quality. cons: But leaves the firm without a buffer of inventory.

Question 42

explain Enterprise resource planning (E R P).

Answer 42

Wide-ranging business planning and control system that includes supply chain-related subsystems. Companies use ERP systems to manage procurement, fulfillment, and production because these systems track all of the events that occur within each process. Furthermore, the system stores all of the documents created in each step of each process in a centralized database, where they are available as needed in real time. Therefore, any exceptions or mistakes made during one or more interdepartmental processes are handled right away by simply querying the ERP system and retrieving a specific document or piece of information that needs to be revised or examined more carefully. An ERP corrects a lack of communication among the functional area ISs. ERP systems resolve this problem by tightly integrating the functional area IS via a common database.

Question 43

3 benefits of ERP

Answer 43

1) Organizational flexibility and agility: As you have seen, ERP systems break down many former departmental and functional silos of business processes, information systems, and information resources. In this way, they make organizations more flexible, agile, and adaptive. The organizations can therefore respond quickly to changing business conditions and capitalize on new business opportunities. 2) Decision support: ERP systems provide essential information on business performance across functional areas. This information significantly improves managers’ ability to make better, more timely decisions. 3) Quality and efficiency: ERP systems integrate and improve an organization’s business processes, generating significant improvements in the quality of production, distribution, and customer service.

Question 44

vendor, supplier and partner definitions

Answer 44

1) Vendor: A vendor is typically a supplier that provides goods or services to a company on a transactional basis. In the upstream supply chain, a vendor might be a company that supplies raw materials, components, or parts needed for manufacturing. For example, a vendor for our smartphone manufacturer could be a company that supplies the lithium-ion batteries used in the phones. The relationship with a vendor is often focused on the exchange of goods or services for payment, and it may not involve a deep level of collaboration or strategic alignment beyond the immediate transaction. 2) Supplier: A supplier is also involved in providing goods or services to a company, but the relationship with a supplier can be more strategic and long-term compared to that with a vendor. Suppliers may provide not only raw materials or components but also specialized expertise, technology, or support services that contribute to the company's operations and competitiveness. In our smartphone manufacturing example, a supplier could be a company that provides the advanced camera modules used in the phones. The relationship with a supplier may involve more collaboration, joint problem-solving, and shared goals beyond simply fulfilling orders. 3) Partner: A partner in the upstream supply chain is a company with which the manufacturer has a close and strategic relationship based on mutual trust, shared goals, and collaboration. Partnerships in the supply chain often involve deeper integration of operations, joint planning, risk-sharing, and long-term commitment to mutual success. In the context of our smartphone manufacturer, a partner could be a company that collaborates closely on product development, innovation, or supply chain optimization. For instance, if our smartphone manufacturer collaborates with a technology company to co-develop cutting-edge biometric authentication features for their phones, that technology company would be considered a partner. The relationship goes beyond a transactional or supplier-vendor dynamic to include shared investments, knowledge exchange, and joint value creation.

Question 45

Why Coordination in Global Supply Chains? Operational Objective that support global supply chain (6) basically how do you reduce Total cost

Answer 45

why : Shared decision making creates a more integrated, coherent, efficient, and effective global supply chain. Operational objectives that support global supply chain: 1) Responsiveness (local adaptation) 2) Variance reduction (eliminate disruptions in SC) 3) Inventory reduction. 4) Shipment consolidation (combine small shipments) 5) Quality (6 Sigma) 6) Life-cycle support: integrate activities of reverse logistics, recycling, after-market service across global SC.

Question 46

Buyer, Customer, client definitions

Answer 46

1) Buyer: A buyer is an individual or organization that purchases goods or services from a seller. In the context of the software industry, a buyer could be an individual or a company that purchases software licenses, subscriptions, or services to meet their specific needs. For example, a buyer might purchase a software solution for project management purposes. The relationship with a buyer is transactional, focusing on the exchange of goods or services for payment. 2)Customer: A customer is someone who purchases goods or services from a business. In the software industry, a customer could be an individual or a company that has purchased and is actively using a software product or service. For instance, a company that subscribes to a cloud-based customer relationship management (CRM) software is considered a customer. The relationship with a customer extends beyond the initial transaction to include ongoing support, maintenance, and possibly additional purchases or upgrades. 3) Client: A client typically refers to a customer who receives professional services or expertise from a business. In the context of the software industry, a client could be an organization that engages a software consultancy firm for customized software development, implementation, or integration services. For example, a company that hires a software consultancy to develop a bespoke software solution tailored to their specific business needs would be considered a client. The relationship with a client often involves a deeper level of collaboration, trust, and ongoing engagement compared to a standard customer relationship.