Global Production and Supply Chain Management

Global Production and Supply Chain Management

• Decisions are crucial for global companies.

Learning Objectives

• Importance of production and supply chain management choices.
• Factors affecting production location: country differences, technology, production factors.
• Role of foreign subsidiaries in production enhancement through knowledge accumulation.
• Sourcing decisions: in-house vs. foreign suppliers.
• Functions of logistics and purchasing in global supply chains.
• Efficient management requirements for global supply chain.

Key Questions in International Business

• Location of production facilities.
• Strategic role of foreign production sites.
• Ownership vs. outsourcing of foreign production.
• Management of dispersed supply chains and IT's role.
• In-house management vs. outsourcing of supply chain.

Value Creation Activities

• Production: activities to create products.
• Supply Chain Management: coordination of logistics, purchasing, operations.

Strategic Objectives

1. Minimize total moving costs with maximum value.
2. Enhance product quality through effective management.

Quality Control Benefits

• Reduces costs, increases productivity, lowers rework and warranty costs.

Six Sigma

• TQM descendant focusing on defect reduction and waste elimination.
• Aims for high-quality standards across operations.

International Standards

• ISO 9000: certification for quality standards, mandated in the EU.

Production Location Factors

• Country factors: political/economic systems, culture, costs.
• Technological factors: fixed costs, scale economies.
• Importance of flexible manufacturing and customization.
• Strategic roles of production facilities and their impacts on global learning.

Make-or-Buy Decisions

• Strategic vs. operational levels inform sourcing choices.
• Factors influencing decisions: cost, control, capacity, quality.

Global Supply Chain Functions

• Logistics: distribution, inventory management, packaging, transportation, reverse logistics.
• Purchasing: Levels of purchasing engagement range from domestic to fully integrated global activities.

Managing Global Supply Chains

• Importance of Just-in-Time inventory to reduce costs and improve efficiency.
• Role of IT systems for data interchange, planning, and collaborative processes.