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
