Daniels Ib13 17

Copyright 2011 Pearson Education
17-1
International Business
Environments and Operations,
13/e
Global Edition
Part 6
Managing International
Operations

17-2
Chapter 17
Global
Manufacturing
and Supply-
Chain
Management

17-3
Chapter Objectives
To describe the different dimensions of a global
manufacturing strategy
To examine the elements of global supply-chain
management
To show how quality affects the global supply chain
To illustrate how supplier networks function
To explain how inventory management is a key
dimension of the global supply chain
To present different alternatives for transporting
products along the supply chain from suppliers to
customers


17-4
What is Supply Chain
Management?
Supply chainthe coordination of materials,
information, and funds from the initial raw-material
supplier to the ultimate customer.

Logisticspart of the supply-chain process that
plans, implements, and controls the efficient, effective
flow and storage of goods, services, and related
information from the point of origin to the point of
consumption in order to meet customers
requirements.


17-5
Global Manufacturing Strategies
Four Key Factors:
Compatibility
Configuration
Coordination
Control

17-6
Compatibility
Company managers must consider the
following strategies:
Efficiency/Cost
Dependability
Quality & Innovation
Flexibility

17-7
Manufacturing Configuration
Centralized manufacturing in one country
Manufacturing facilities in specific regions to
service those regions
Multidomestic facilities in each country


17-8
Coordination Control
Control systems, such as organizational
structure and performance measurement
systems, ensure that managers implement
company strategies.


17-9
Information Technology and
Global Supply Chain Management
Electronic Data Interchange
Enterprise Resource Planning/Material
Requirements Planning
Radio Frequency ID (RFID)
E-Commerce


17-10
Quality
Zero Defects versus Acceptable Quality Level
The Deming Approach to Quality
Management
Total Quality Management
Six Sigma


17-11
Quality Standards
Levels of quality standards:
General levelISO 9000, Malcolm Baldrige
National Quality Award
Industry-specific level
Company level


17-12
Supplier Networks
Global Sourcing
Major Sourcing Configuration
The Make or Buy Decision
Supplier Relations
The Purchasing Function


17-13
Global Sourcing

17-14
Major Sourcing Configuration
Vertical integration
Outsourcing through industrial clusters
Other outsourcing


17-15
Make or Buy Decision
Make or buyoutsource or supply parts from
internal production
If MNEs outsource parts instead of sourcing
them from internal production, they need to
determine the degree of involvement with
suppliers.


17-16
Supplier Relations
Supplier relationships are very important but
sometimes complicated, especially for MNEs
trying to manage supplier relationships
around the world
Case: Toyota
Case: JCPenney


17-17
The Purchasing Function
Global progression in the purchasing function:
Domestic purchasing only
Foreign buying based on need
Foreign buying as part of a procurement
strategy
Integration of global procurement strategy


17-18
Major Sourcing Strategies

Assign domestic buyers for foreign
purchasing.
Use foreign subsidiaries or business agents.
Establish international purchasing offices.
Assign the responsibility for global sourcing to
a specific business unit or units.
Integrate and coordinate worldwide sourcing.


17-19
Inventory Management
Lean Manufacturing and Just-In-Time
Systems
Risks in Foreign Systems
The Kanban System
Foreign Trade Zones
Transportation Networks


17-20
Future: Uncertainty and the Global
Supply Chain

Globalization encourages companies to
outsource to foreign suppliers to reduce
costs.
Political events increase the risk of
supply chain disruption.


17-21
All rights reserved. No part of this publication may be
reproduced, stored in a retrieval system, or transmitted,
in any form or by any means, electronic, mechanical,
photocopying, recording, or otherwise, without the prior
written permission of the publisher. Printed in the
United States of America.

Daniels Ib13 17

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