Chapter 15 Global Production and SCM
Upstream Supply Chain
The portion of the supply chain from raw materials to the production facility.
Downstream Supply Chain
The portion of the supply chain from the production facility to the end-customer.
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.
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; also called a global distribution warehouse.
Server Factory
A factory linked into the global supply chain for a global firm to supply specific country or regional markets around the globe.
Outpost factory
A factory that can be viewed as an intelligence-gathering unit.
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.
Lead Factory
A factory that is intended to create a new processes, products, and technologies that can be used throughout the global firm in all parts of the world.
Contributor Factory
A factory that serves a specific country or world region.
Source Factory
A factory whose primary purpose is also to drive down costs in the global supply chain.
Production
Activities involved in creating a product.
ISO 9000
Certification process that requires certain quality standards that must be met.
Flexible Machine Cells
Flexible manufacturing technology in which a grouping of various machine types, a common materials handler, and a centralized cell controller produce a family of products.
Just In Time (JIT)
Inventory logistics system designed to deliver parts to a production process as they are needed, not before.
Total Quality Management (TQM)
Management philosophy that takes as its central focus the need to improve the quality of a company's products and services.
Flexible Manufacturing Technology
Manufacturing technology designed to improve job scheduling, reduce setup time, and improve quality control.
Six Sigma
Statistically based methodology for improving product quality.
Packaging
The container that holds the product itself. It can be divided into primary, secondary, and transit packaging.
Global Inventory Management
The decision-making process regarding the raw materials, work-in process (component parts), and finished goods inventory for a multinational corporation.
Global Learning
The flow of skills and product offerings from foreign subsidiary to home country and from foreign subsidiary to foreign subsidiary.
Supply Chain Management
The integration and coordination of logistics, purchasing, operations, and market channel activities from raw materials to the end-customer.
Minimum Efficient Scale
The level of output at which most plant-level scale economies are exhausted.
Transportation
The movement of inventory through the supply chain.
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 products used in manufacturing.
Mass Customization
The production of a variety of end products at at unit cost that could once be achieved only through mass production of a standardized output.
Global Supply Chain Coordination
The shared decision-making opportunities and operational collaboration of key global supply chain activities.
Make-or-Buy Decision
The strategic decision concerning whether to produce an item in-house (make) or purchase it from an outside supplier (buy).
1. Value-to-weight ratio 2. Universal needs
Two product features affecting location decisions
1. Trade barriers are low 2. Exchange rates are stable 3. High fixed costs 4. High minimum efficient scale 5. FMT exists
When does concentration of production makes sense?
