CHP 15 Flashcards
What is Supply Chain Management?
coordinating and integrating the flow of materials, information, finances, and services w/i and among companies in the value chain from suppliers to consumer
What does Supply Chain refer to?
activities involved in producing products and services and how they are linked together
Supply chains are ____ to global ___ and ___ management…
integral; quality; cost
Operations in each step of the supply chain must be?
Synchronized
What are the 3 main key points for the Design of products and services?
- Operations can be standardized/adapted
- Traditional “over-the-wall” approach is sequential steps to design
- Alternative approaches are cross functional participation in each stage of design
What is a common solution to improving competitiveness, lowering costs while improving their products?
Outsourcing
What are the reasons for sourcing globally?
Primary reason= lower prices
no local availability of certain products
competition using better designed/quality
What are the 2 options when deciding to source internationally?
set up their own facilities or
outsource the production to other companies
What part of the value chain can be outsourced?
ANY! production design, materials, supplies, manufacturing/assembly, logistics, distribution, marketing, sales, service, HR
The rate at which developing nations shift to more sophisticated process is often more….
rapid than the initial emergence of these processes in a developed country
Emerging nation’s ability to transfer technology and processes previously invented and commercialized in more developed nations has…
avoided the cost and time of inventing these technologies on its own.
What are the 5 Global Sourcing Arrangements?
- Wholly owned subsidiary
- Overseas joint venture
- In-bond plant contractor
- Overseas independent contractor
- Independent overseas manufacturer
What is Wholly Owned subsidiary?
established in an country with low cost labor or producing a product not made in the home country
What is Overseas joint venture?
established where labor costs are lower to supply components to the home country
What is In-bond plant contractor?
Home country plant sends components to be machined and assembled or just assembled by an independant contractor in an in-bond plant
What is an Overseas independent contractor?
common in clothing industry, firms with no production facilities like DKNY and Nike contract foreign manufacturers to make clothing to their specifications with their label
What is the Importance of Global Sourcing?
Intrafirm trade b/w parent and foreign affiliate
- 30%-40% of exports
- 35%-45% of imports in US
What are the reasons for COGS rising?
- More complex products
- More focus on core business
- outsourcing activities lacking competitive ability
- pressure to reduce concept-to- market cycle times
When is Indirect Procurement used?
to purchase items not included in finished goods but necessary for business operations
ex: office equipment
What is E-purchasing?
catalog purchases update in real time, buyers and suppliers use standard bid/quote system, facilitation of letters of credit, contracting for logistics and distribution, monitoring daily prices and order flows
What are some benefits to E-purchasing?
- streamline operations
- Cut costs
- improve productivity
- cut invoice and ordering errors
- streamline supply chains
- Reach new markets
What are some problems with Global sourcing?
- initial lower costs may not really be lower when all costs are connected to purchase
- Ties firm’s strategic objectives with explicit supplier objectieves
B/c international firms maintain ___ facilities in countries at ___ levels of development, manufacturing systems ____ considerably in ___ and ___ from country to country
manufacturing; various; vary; cost; quality
Advance production techniques can ____ quality and ____ cost
Enhance; Lower
Advanced production systems are widely used and examples inculde
Just-in-time supply chain, synchronized manufacturing systems and computer integrated manufacturing (CIM)
What is Logistics?
managerial functions associated with movement of materials, work in progress or finished goods
T/F Outsourcing logistics is not an explored option?
False. its and Increasingly explored option
Logistics services include:
- Shipping
- Warehousing
- Distribution Management
- Brokerage services
What are standards?
documented agreements or precise criteria used as guidelines, rules, definitions of a product, service or process
What helps ensure that materials, products, processes and services are appropriate for intended purpose
Standards
In most countries, where and why are standards developed?
across product lines and for various functions
International organization for Standardization (ISO)
5 universal standards for quality assurance
ISO 9000 and ISO 9001
In organization and staffing, the effects of standardized is
Simpler and less costly
Why is organization and staffing less costly and simpler when standardized?
- replication cuts cost by using less staff and labor hours
2. standardized manufacturing increases HQ effectiveness in keeping product specs current
Having one integrated supply chain in logistics of supply does what?
increases profits
What does standardization guarantee in logistics of supply?
interchangeable parts manufactured in different plants
What is Manufacturing Rationalization?
change from subsidiary manufacturing only for national market to manufacturing for all markets
What are some conditions to manufacturing rationalization?
product mix must first be rationalized
not viable if wide consumer taste and preference differences
what is Purchasing under organizational and staffing?
unified purchasing passes volume discounts to subsidiaries
What are the 2 components of Control?
- Quality control
2. Production maintenance control
Under planning, it can be quicker and simpler because of the repetition of work already done including (5)…
- Design Engineers need only copy drawings and list of materials in their files
- Vendors will be requested to furnish equipment that they have supplied previously
- Labor trainers experience in operation machinery
- accurate forecasts of plant erection time and output based on existing facilities
What often intervene to cause diversity in the units of muti-plant operation?
Foreign environmental forces
What are the 3+1 types of environmental forces?
- Economical
- Cultural
- Political
- International Security
What is economical forces?
production requirements vary among plans b/c of differences in market sizes
What are the 3 options a plant designer has of selecting in Economical forces?
- Capital-intensive process
- Labor-intensive process
- Computer-integrated manufacturing (CIM)
What is Capital intensive process?
using automated, high-output machinery
What is Labor intensive process?
employ more people operating semi-manual general-purpose machinery
What is Computer integrated manufacturing?
found in industrialized and developed nations due to high cost and high technological content
What is a hybrid design?
used in plant design developing countries; incorporation of capital-intensive process essential for quality and Labor-intensive processes to take advantage of lower cost labor
What is intermediate technology?
production methods b/w capital and labor intensive methods
What is Basis for organization?
local production organization is commonly a scaled- down version of the parent company’s organization
What are some Horizontal and vertical integration characteristics?
- local organizations rarely integrated
- additional investment is required
- countries may require local content of finished products
- overseas affiliate may become conglomerate when parent acquires a MNC
