Week 8 Flashcards
(16 cards)
Operation department is held responsible for
- overseeing
- designing
- controlling
the process of production and redesigning business operations if necessary
the purpose of supply chain management
- supply chain strategy and configuration
- order and demand management
- production management
- supply management
- distribution management
- systems and organization
- supply chain performance management and transformation
Important element of a global SCM strategy
global manufacturing strategy information technology strategy quality strategy supplier networks strategy inventory management strategy
global sourcing
Is the process of a firm having inputs supplied to it from outside suppliers (both domestic and foreign) for the production process
The procurement of products or services from independent suppliers or company-owned subsidiaries located abroad for consumption in the home country or a third country
Offshoring
The relocation of a business process or entire manufacturing facility to a foreign country
(Business Process) Outsourcing (BPO)
The procurement of selected value-adding activities or processes, from independent suppliers
internalized (not internationalized!)
product in house in home country
Externalized (outsourced)
outource production to third-party provider in home country
Foreign sourcing allows the company to reduce costs and improve quality, among other things but it implies problems such as:
- language
- culture
- expertise
- currency
- tariffs
- transportations
- delays
Tools to check quality standards
- TQM (Total quality management)
- Kaizen
- Six Sigma
Key principles of Quality standards
- customer satisfaction
- continuous improvement
- employee involvement
Goal of Six Sigma
reduce variability
achieve as close to zero defects as possible
some challenges in shipping by ocean
humidity
loss of cargo
damage
impact
Sources of risk for global supply chains
natural disruptions
- earthquakes
man-made disruptions
- labor unrest
- terrorism
innovation
- technology
customer dynamics
- local tests
- disposable income levels
macroeconomics
- business sycles
- financial crises
state
- trade policy
- regulation
endogenous
- commoditisation
- inventory
- financial
how to avoid the risks
- Go offshore for the right reason
- Get employeeson board
- Choose carefully between a captive operation and contracting with outside suppliers
- Choose suppliers carefully
- Emphasize effective communicationswith suppliers
- Invest in supplier development and collaboration
- Safeguard interests
- Higher coordination between the different parts of the supply chain at all levels
- Avoid single source suppliers
- Use financially secure suppliers when possible
- Utilize suppliers with strong risk management practices
- Diversify suppliers, preferably in different geographic regions
- Identify alternative suppliers
- Increase redundancy
- Identify substitute materials if possible
- Transfer some of the risk via insurance
MNEs may be ineffective or indifferent about
- protection the environment
- promoting human rights
- labor practices and working conditions abroad
