Chapter 17: Global Production and Supply Chain Management

Production

Activities involved in creating a product

Supply Chain Management

The integration and coordination of logistics, purchasing, operating, and market channel activities from raw material to the end customer

Purchasing

The part of the supply chain that includes the worldwide buying of raw material, component parts, and products used in manufacturing of the company's products and services

Logistics

The part of the supply chain that plans, implements, and controls the effective flows and inventory of raw material, component parts, and product used in manufacturing

Upstream Supply Chain

The portion of the supply chain from raw materials to the production facility

Downstram Supply Chain

The portion of the supply chain from the production facility to the end-customer

Total Quality Management (TQM)

Management philosophy that takes as its central focus the need to improve the quality of the company's products and services

Six Sigma

Statistically based methodology for improving product quality

ISO 9000

Certification process that requires certain quality standards that must be met

Minimum Efficient Scale

The level of output at which most plant-level scale economies are exhausted

Flexible Manufacturing Technology

Manufacturing technology designed to improve job scheduling, reduce setup time, and improve quality control

Lean Production

aka Flexible Manufacturing Technology

Mass Customization

The production of a variety of end products at a unit cost that cound once be achieved only through mass production of a standardized output

Flexible Machine Cells

Flexible manufacturing technology in which a grouping of various machine types, a common materials handler, and a centralized cell controller product a family of products

Global Learning

The flow of skills and product offerings from foreign subsidiary to home country and from foreign subsidiary to foreign subsidiary

Offshore Factory

A factory that is developed and set up mainly for producing component parts or finished goods at a lower cost than producing them at home or in any other market

Source Factory

A factory whose primary purpose is also to drive down costs in the global supply chain

Server Factory

A factory linked into the global supply chain for a global firm to supply specific country or regional markets around the globe

Contributor Factory

A factory that serves a specific country or world region

Outpost Factory

A factory that can be viewed as an intelligence-gathering unit

Lead Factory

A factory that is intended to create new processes, products, and technologies that can be used through the flobal firm in all parts of the world

Make-or-buy decision

The strategic decision concerning whether to product an item in-house(make) or purchase it from an outside supplier (buy)

Global Distribution Center

A facility that positions and allows customization of products for delivery to worldwide wholesalers or retailers or directly to consumers anywhere in the world; aka global distribution warehouse

Global Inventory Management

The decision-making process regarding the raw materials, work-in process (component parts), and finished goods inventory for a multinational corporation

Packaging

The container that holds the product itself. It can be divided into primary, secondary, and transit packaging

Transportation

The movement of inventory through the supply chain

Reverse Logistics

The process of moving inventory from the point of consumption to the point of origin in supply chains for the purpose of recapturing value or proper disposal

Just in Time

Inventory logistics system designed to deliver parts to a production process as they are needed, not before

Global Supply Chain Coordination

The shared decision-making opportunities and operational collaboration of key global supply chain activities