Global considerations

Question 1

Global considerations

Answer 1

Businesses will look beyond their own borders when looking to run its operation system.
• This enables the business to take advantage of:
o Higher quality materials
o Strategic locations
o Cheaper inputs
o Global talent

Question 2

Global sourcing for inputs

Answer 2

Global sourcing of input is a strategy where a business sources it inputs from countries outside its place of origin.
• Businesses may do this for a number of reasons including:
o Higher quality inputs:
o Cheaper materials
o Cheaper labour
o Make use of lower taxes in other countries

Question 3

Advantages and disadvantages of global sourcing of inputs

Answer 3

Advantages
• Access to cheaper materials
• Can specialise in production not sourcing
• Access to materials not Occurring in domestic country

Disadvantages
• Can lengthen delivery and Supply times
• Language barriers in dealing with supplies
• Risk with damage of shipping increases with distance

Question 4

Overseas manufacturing

Answer 4

Overseas manufacture is where a business produces its goods in our country that is different to the location of its headquarters.
Manufacturing overseas can allow the business to:
• Reduce costs (often via lower labour cost)
• Get their product to the market quicker (due to Australians location)

Question 5

Advantages and disadvantages of overseas manufacturing

Answer 5

Advantages
• Access to large pool of employees
• Access to New export markets
• Access to New export markets

Disadvantages
• Lost jobs in domestic manufacturing
• Finished goods may be damaged during delivery
• Delivery can be time consuming

Question 6

Global outsourcing

Answer 6

Where outsourcing is where a part of a businesses operations is handed over to another person or business located in a different country.
• Business’s will often outsource a non-core activity which allows them to:
o Reduce costs
o Make use of global expertise, improving quality
o Focus on the core business which can improve productivity

Question 7

Advantages and disadvantages of global outsourcing

Answer 7

Advantages
• Access to cheaper labour rates
• Works well with IT based services
• Business not directly responsible For their employees and entitlements

Disadvantages
• Language barriers
• Suppliers country CSR and legal standards might be different
• Reliance Internet connections

Question 8

Supply chain management

Answer 8

Supply chain management is the process of managing the flow of supplies from supplier, through the operation system and to the end consumer. Every good or service that reaches an end user represents the cumulative effort of multiple businesses. Businesses that make up the supply chain are linked together, if one link fails or costs rise, it impacts the end product.
• To ensure the supply chain is efficient, businesses need to:
o Access proximity to suppliers and end customers
o Quality of supplies
o Cost of supplies
o Cost of transportation

Question 9

Advantages and disadvantages of supply chain management

Answer 9

Advantages
• Quality products are reduced
• Access to cheaper materials
• No it’s not directly Responsible for factory production

Disadvantages
• Can be very complicated to manage
• Can lengthen delivery and supply times
• Language barriers in dealing with supplies