Global Supply Chains & Manufacturing - Global Supply Chain

Question 1

what is the slowdown in manufacturing in China due to

Answer 1

acceleration of near shoring

companies are always reflecting on how effective their supply chain is and how it can be improved

Question 2

example of typically technology chain

Answer 2

American designers
Indian Software Developers
East Asian manufacturers
European System integrators and support

Question 3

what are the two core sets of knowledge assets on which global supply chains run

Answer 3

Technology
Management/Organisation

Question 4

how is the firms supply chain a resource

Answer 4

shouldn’t be easily substituted

valuable
rare
difficult to imitate

all of these will allow for a competitive advantage

Question 5

how to make a supply chain valuable (i.e. efficient)

Answer 5

increasingly involve whole system activities from sourcing to customer support

Question 6

how to make a supply chain difficult to imitate

Answer 6

complex materials, information and people flows

Question 6

how to make a supply chain rare (i.e. differentiated from competitors)

Answer 6

integration of global and local competitive advantages

i.e. firm specific and location specific advantage

Question 7

how to make a supply chain difficult to substitute

Answer 7

delivery levels of responsiveness that are critical to customer needs

Question 8

Example of changes in JCB global suuply chain

Answer 8

1979 - 96% of components from UK
2010 - 36% of components from UK (rest in India and rest of Europe)

Question 9

what are the types of risks in supply chains

Answer 9

• macroenvironmental risks
• extended value chain risks
• operational risks
• 3rd party risks
• functional risks

Question 10

What are macroenvironmental risks
Give some examples

Answer 10

have potential effects across the entire supply chain

economic
ESG
Geopolitical
Natural disasters
Regulatory
Security

Question 11

what are extended value chain risks
(3rd parties)

Answer 11

originate in upstream and downstream supply chain partners

Question 12

what are operational risks

Answer 12

interal process risks

eg risks in plans, in returns

Question 13

what are functional risks
give examples

Answer 13

risks in enabling functions that support the supply chain

eg. HR (key individuals)
Finance (investments fall through)
IT (system collapse)
Legal issues

Question 14

what risks are increasing

Answer 14

geopolitical risk
regulatory compliance

Question 15

what risks are consistently high

Answer 15

supplier volatility
demand volatility
economic climate

Question 16

why is lack of visibility no longer a big risk

Answer 16

transparency increased over last few years

Question 17

how do overseas plants pose risk

Answer 17

physical, cultural and linguistic gaps

hard to physically check faults

excessive efforts and costs are needed to make up for any potential reputational damage

Question 18

how do quality of parts from overseas pose risk

Answer 18

there is a financial incentive to cut quality

quality is difficult to achieve due to spatial distance

Question 19

how can technology leaks at overseas factories cause risk

Answer 19

short term -> loss in business to competitors in respective countries

long term -> knowledge and IP spillover

further the distance, the higher the likelihood of this

Question 20

how can dependence pose risk

Answer 20

Manufacturers who depend on one supplier have a weak negotiating power

eg Foxxconn was in a weaker position then it’s biggest customer - Apple
But have since diversified and used their knowledge to move into other markets

Question 21

how can frictions with local governments pose risk

Answer 21

the public face criticism from consumers

if the company’s plans are negligent about environmental standards and labour conditions, they could clash with local government

consumer drive regulation change

Question 22

how can companies prepare for risk

Answer 22

• QUALITY CONTROL
• SWIFTLY resolve the situation at an early stage when problems occur
• strike the right balance between global strategy and local strategy