Production Strategy

Question 1

What are common production-related problems that MNC’s face?

Answer 1

• Criticism on their integration strategy
• Pressure from host government to use local supploes, hire local workers, and help improve the production environment in the host country

Question 2

What are the two types of innovation that exist?

Answer 2

Product/Service development
= creation of new products or improvements to existing products and services

Process development
= improvements to the production process of products and services

Question 3

How does the Innovation hierarchy look like?

Answer 3

1) Blue-sky (highly specialized expertise like universities)
2) Near-market R&D
3) Applied Innovation

Question 4

What is the idea of “Speed-to-market” strategies?

Answer 4

By carefully designing the product and getting it out of the door fast the company can dramatically increase profitability.

Question 5

Explain the idea behind “time-to-market accelerators” and give an example

Answer 5

= factors that help reduce bottlenecks and errors and ensure product quality and performance

Concurrent engineering:
Reduce defective products and speed delivery by letting designers, manufacturers, and engineers work together to create and build the product. As a result fewer costly changes are needed later on in the production process.

Question 6

What is the hierarchy of global sourcing and what are the risk associated with it?

Answer 6

First preference is always given to internal sources. External suppliers are only considered if after caregul review is is revealed that a sufficient cost/quality difference exists.
Risks: leakage of key knowledge, hindering of innovations, sustainability concerns

Question 7

What factors influence the manufacturing a good?

Answer 7

Cost
Quality (products expected to be perfect)
Efficient production system (location, layout, material handling)

Question 8

Explain: Product/Service balance

Answer 8

Knowing whether to sell on the basis of product or service (or a combination of the two) is critical to the success of MNEs.
When competing in terms of service, one must match the competition but not exceed it unless the customer is willing to pay for this service.

Question 9

Explain the factors of international logistics

Answer 9

1. Transportation: ocean or air shipping?
   –> depending on time, reliability, and cost
2. Packaging: smart weight and size distribution can minimize shipping space and therefore transportation cost
3. Storage: invest in wharehouse facilities or ship goods only when needed?
4. Inventory control: Just-in-time Inventory (JIT)

Question 10

Explain: “Just-in-time inventory (JIT)”

Answer 10

The delivery of parts and suppliers just as they are needed in order to keep inventory to a minimum.
BUT: high dependance on quality and reliability of suppliers

Question 11

Explanation: Strategic Management?

Answer 11

• Technology and production design
• Continuous improvement (“kaizen”)
• Alliances and acquisitions (M&A)