Chapter 17- Global Production, Outsourcing, and Logistics Flashcards
what are the two strategic objectives of logistics
lowering costs and increasing product quality
TQM
total quality management; how do i make something of high quality and keep it that way
the more diverse your operations are internationally
the harder it is to keep TQM up; more locations so harder to keep the quality up
who came up with the concept of TQM
Edward Deming
industrial park strategy
explain it as best you can
just-in-time
maybe getting goods there just in time so that you don’t have a lot of inventory sitting around or backed up supply chains
one key question that logistics tries to answer
where should production activities be concentrated
what did Edward Deming say about increasing production with TQM
if you have supervisors spend time with the people on the shop floor so that TQM could be increased; shop floor employees would be more creative to problems; train employees to keep pace; create a good environment
successor to Deming’s TQM
Six Sigma
a production process that would be 99.99966 accurate, creating just 3.4 defects per one million units; a statistical approach to measuring quality
six sigmas
a governmental program for quality control in the EU
ISO 9000
what three factors do you look at to determine where to locate production activities
country, technology, and product factors
what are the two types of technology factors
unit cost curve (how much is it going to cost us to make one and how will that change over time) and minimum efficient scale
what product factors need to be considered
value to weight ratio
if something has a high weight but low value
it is much better to make it where it will be bought
if something has a low weight but high value
then it is much better to ship because it will not impact your profit margin too much
with a lot of locations it is harder to maintain ____ but it makes it easier to have ______
TQM
local responsiveness
making everything from start to finish
top to bottom manufacturing; should we make everything ourselves or should we focus on what we do best and get the best components for the overall product (Rolls Royce car radios
a way of measuring economies of scale; at some point the marginal savings you make decrease
unit cost curve
when there are no additional benefits to manufacturing more you have reached the
minimum efficient scale
other producers may have a better product than what you would be able to efficiently and profitably produce
outsourcing
one downside to top to bottom manufacturing
you may not be able to make the best everything; it splits your focus; and it limits your options because you now have to buy the components that your company is making
there is a high failure rate in mergers and acquisitions due to
the hubris effect; top management makes a decision and then no one challenges the decision
all the activities involved in manufacturing an article for sale or a service to be provided
production
what activities are part of supply chain management
purchasing, logistics, and operations
the part of the supply chain that plans, implements, and controls the flow of materials
logistics
what is a basic tenet of the TQM approach
poor quality materials are not acceptable
what are included in the downstream portion of the global supply chain
retailers and wholesalers
the total quality management approach to increasing product reliability was first adopted by companies in
japan
what three characteristics of manufacturing technology does the text refer to when making a location decision
level of fixed costs, flexibility of the technology, and minimum efficient scale
what can make it economical to set up production facilities in many different locations at the same time
low fixed costs
the scale of output that a production facility must operate at to realize all major plant level scale economies is called
the minimum efficient scale
flexible manufacturing technology is also called
lean production
the term used to describe a company’s ability to produce a customized product at low cost is
mass customization
influences a company’s transportation costs
the value-to-weight ratio
needs that are the same all over the world
universal needs
establishing many production facilities located near markets is a
decentralized production configuration
when a firm establishes a facility in a centralized location and serves the global markets from this locatoin
concentrated production configuration
what are three of the factors that lead a company to establish a concentrated production configuration
high fixed costs, product serves universal needs, value-to-weight ration is high
when a firm gains valuable knowledge not only from domestic operations, but also from foreign subsidiaries, it demonstrates
global learning
the ideal offshore factory would include
minimal investments in technology
the purpose of a ____ factory is to create new processes, products, and technologies that can be used within all parts of the global firm
lead
what are the benefits of a decentralized production strategy
be more locally responsive and decrease dependence on one location
