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Supply Chain
Refers to the flow of supplies from the supplier, through the operations system and to the end customer.
Supply Chain Management
Involves meeting consumer demand for goods and services while making the most efficient use of the production process and the distribution of the final product to the customer.
Global Sourcing of Inputs
A business uses suppliers from overseas countries.
Global Sourcing of Inputs [Advantages and Disadvantages]
ADVANTAGES
Opportunity to take advantage of global efficiencies - due to types and quality of resources some countries have natural advantages in producing specific products.
Resources not found in home country can be utilised.
DISADVANTAGES
Increased shipping costs and time.
Risk of damage in shipping.
Inefficiencies associated with time zones, cultural differences and language barriers.
May be tariffs.
Exposed to changes in exchange rates.
Not buying locally - can be seen as unethical.
Overseas Manufacturing
When the production of a good or service occurs in an overseas location.
May be done by the business or outsourced.
Overseas Manufacturing [Advantages and Disadvantages]
ADVANTAGES
Lower cost of production.
Skills and resources not found in home country can be utilised.
Potential to be close to other markets.
DISADVANTAGES
Increased shipping costs and time if going to ship products back to Australia.
Inefficiencies associated with time zones, cultural differences and language barriers.
More difficult to manage the quality of manufactured products.
Loss of Australian jobs - unethical.
Global Outsourcing
Where a business hands over part of its operations to an overseas business.
Global Outsourcing [Advantages and Disadvantages]
ADVANTAGES
Skills not found in home country can be utilised.
Outsourced to people who are specialised in their field - have specific equipment and technical expertise.
Access to cheaper labour rates.
DISADVANTAGES
Inefficiencies associated with time zones, cultural differences and language barriers.
Customer frustration with language barriers.
Loss of Australian jobs - unethical.