Chapter 17: Global Production and Supply Chain Management

A ______ _______ also serves a specific country or world region

Contributor factory

What are two key components of global supply chain coordination? Coordination Internationalization Commercialization Integration

Coordination Integration

What are the three broad groups of factors that a company should consider when making decisions on where to produce its products? Social media factors Country factors Customer service factors Production factors Technological factors

Country factors Production factors Technological factors

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

Downstream supply chain

Most companies now rely on ______ for the exchange of electronic data between two or more companies.

EDI

True or false: One disadvantage of flexible machine cells technology is excessive waste that occurs when flexible machines cells are incorporated into a production facility.

False

True or false: The main responsibilities of a server factory are linked to the national supply chain and do not affect the global supply chain.

False

True or false: When considering the building blocks for global supply chains, all relationships between vendors, suppliers, and partners are equally valuable.

False

What three characteristics of manufacturing technology does the text say a company should consider when making a location decision? Flexibility of technology Minimum efficient scale Inventory controls Human resources Level of fixed costs

Flexibility of technology Minimum efficient scale Level of fixed costs

A grouping of various types of machinery, a common materials handler, and a centralized cell controller

Flexible machine cells

Covers a range of manufacturing technologies designed to (1) reduce setup times for complex equipment, (2) increase the utilization of individual machines through better scheduling, and (3) improve quality control at all stages of the manufacturing process

Flexible manufacturing technology or Lean production

Is a facility that positions and allows customization of products for delivery to worldwide wholesalers or retailers or directly to consumers anywhere in the world

Global distribution center

_____ ________ _______ can be viewed as the decision-making process regarding the raw materials, work-in-process (component parts), and finished goods inventory for a multinational corporation

Global inventory management

The idea that valuable knowledge does not reside just in a firm's domestic operations; it may also be found in its foreign subsidiaries

Global learning

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

Global supply chain coordination

Certification process that requires certain quality standards that must be met

ISO 9000

Refers to the package's inclusion of inclusion of (1) logical and sufficient instructions for the use of the products inside the package, including specific requirements to satisfy local regulations; (2) a statement of a compelling product guarantee; and (3) information about service for the product if and when it is needed

Inform

The strategy to decrease inventory costs by having materials arrive at a production facility when they are needed rather than keeping an inventory is called ______ inventory.

JIT

The total quality management approach to increasing product reliability was first adopted by companies in ______.

Japan

Economize on inventory holding costs by having materials arrive at a manufacturing plant just in time to enter the production process and not before

Just-in-time (JIT) inventory systems

A ______ _____ is intended to create new processes, products, and technologies that can be used throughout the global firm in all parts of the world

Lead factory

Kim's company only participates in international purchasing activities when needed. Unfortunately, this means that those international purchases are typically last-minute. Which of the strategic levels of global purchasing does this represent?

Level II

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

Logistics

Which term is used to describe the part of the supply chain that plans, implements, and controls the flow of raw materials and component parts used to manufacture a product?

Logistics

The strategic decision concerning whether to produce an item in-house or purchase it from an outside supplier

Make-or-buy decision

The ability of companies to use flexible manufacturing technology to reconcile two goals that were once thought to be incompatible: low cost and product customization

Mass customization

Which of these scenarios is an example of just-in-time inventory? Nick works for a subsidiary of a service company and is required to place all orders by the fifteenth of each month. Maria's company outsources the production of small component parts and makes all large parts in-house. Jan's company produces electronics. The company does not want anyone else to have access to the knowledge it has developed. Michael's company has found a way to cut costs by having parts delivered to the facility exactly when they are needed in the production process.

Michael's company has found a way to cut costs by having parts delivered to the facility exactly when they are needed in the production process.

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

Minimum efficient scale

An ______ ______ is one 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

Offshore factory

Treena works for an electronics parts company and was recently transferred to China to work gathering intelligence on her company's main competitor. Her new office in China is just five miles away from the competitor. Which type of factory will Treena be working in?

Outpost

An ______ ______ can be viewed as an intelligence-gathering unit

Outpost factory

_____ comes in all shapes, sizes, forms, and uses

Packaging

Refers to the package's ability to (1) contain the products properly, (2) preserve the products to maintain their freshness or newness, and (3) provide the necessary security and safety to ensure that the products reach their end destination in their intended shape

Perform

What are two potential "hidden" costs of outsourcing production to a foreign location? Poor product quality High human resources costs High employee turnover Lack of tax base

Poor product quality High employee turnover

Holds the product itself

Primary packaging

Activities involved in creating a product

Production

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

Purchasing

_______ ______ is the process of planning, implementing, and controlling the efficient, cost-effective flow of raw materials, in-process inventory, finished goods, and related information from the point of consumption to the point of origin for the purpose of recapturing value or proper disposal

Reverse logistics

Is designed to contain several primary packages

Secondary packaging

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

Server factory

Modern successor to TQM, is a statistically based philosophy that aims to reduce defects, boost productivity, eliminate waste, and cut costs throughout a company

Six Sigma

The statistically-based process used today to reduce production costs that is the successor to TQM is called ______.

Six Sigma

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

Supply chain management

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

Total Quality Management (TQM)

Comes into use when a number of primary and secondary packages are assembled on a pallet or unit load for transportation

Transit packaging

Refers to the movement of raw material, component parts, and finished goods throughout the global supply chain

Transportation

True or false: Low fixed costs can make it economical to set up production facilities in many different locations all at the same time.

True

True or false: When assessing whether a country is an ideal location for setting up production facilities, it would be important to assess the political climate of that country.

True

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

Upstream supply chain

Which activity is NOT part of supply chain management? advertising operations purchasing logistics

advertising

The make-or- ______ decision involves a firm deciding to produce or outsource a value creation activity.

buy

When a firm establishes a facility in a centralized location and serves the global markets from this location, this strategy is called a ______.

concentrated production configuration

A(n) ______ factory is responsible for product and process engineering and development.

contributor

Which type of factory has more choice in which suppliers to use for raw materials?

contributor

The shared decision-making opportunities and operational collaboration of key global supply chain activities is called global supply chain ______.

coordination

The main reason a company would include an offshore factory in the production of component parts would be to realize ______.

cost savings

What ability is most closely associated with a global distribution center?

customization

EDI refers to the interchange of ______ between companies.

data

Establishing many production facilities located near markets is a ______ production configuration.

decentralized

Out of the five strategic levels of global purchasing, those companies that participate as Level 1 engage only in _____ activities.

domestic

A decentralized production configuration makes it _______ (easier or harder?) for a company to meet the demands for local responsiveness.

easier

Juanita works for a company that manufacturers microchip technology. The company would like to open another facility in Europe but the cost to build the facility with the necessary technology is too high. This demonstrates how ______ costs can affect where a company produces.

fixed

A common flexible manufacturing technology that groups various types of machines, a common materials handler, and a computer is called ______.

flexible machine cells

Jason is responsible for determining how much inventory to have on hand and where that inventory should be located in the supply chain for his company. Jason works in ______.

global inventory management

Jackson reminded his management team that while their home headquarters had knowledge about the facilities in Thailand, they should also communicate with the subsidiary in Thailand to gain their knowledge. This demonstrates the concept of ______.

global learning

When a firm gains valuable knowledge not only from domestic operations, but also from foreign subsidiaries, it demonstrates the idea of ______.

global learning

One drawback to basing production in a foreign location is the potential for poor product quality. This is an example of a ______ cost.

hidden

Fill in the blank question. Pharmaceutical products are typically expensive but they do not weigh very much. These products typically have a ______ (low or high?) value-to-weight ratio.

high

Katrine reported to the management team that currently 42% of their total assets were in raw materials and 58% were in finished goods. The finished goods were divided equally between their plants in the United States, Honduras, and Indonesia. Katrine's report is a summary of the company's global ______ management.

inventory

A motorcycle company is establishing a new factory to create processes, products, and technologies that the firm will use throughout its global operations. This factory would best be described as being a(n) ______ factory.

lead

Michaela is part of a team responsible for all of the cutting-edge production her company uses to produce computer hardware. She works for a(n) ______ factory.

lead

Flexible manufacturing technology is also referred to as ______ production.

lean

Jan's company decides to locate its manufacturing to another country because that country's economic, political, and cultural conditions are conducive to the success of the company. Jan's company is making its decision based on ______ economies.

location

The part of the supply chain that plans, implements, and controls the flow of materials is called ______.

logistics

Carrie's company is trying to decide if it should produce blankets themselves or purchase them from China because it would provide a cost savings. Carrie's company is involved in a ______ decision.

make-or-buy

Mary's company incorporated flexible manufacturing technology to develop a low cost, customized line of t-shirts. Her company is using the process of ______.

mass customization

The term used to describe a company's ability to produce a customized product at low cost is ______.

mass customization

The ideal offshore factory would include ______ investments in technology from corporate headquarters.

minimal

During the management meeting, Maria pointed out that the company was running at a level of output necessary for it to achieve all the economies of scale required to operate efficiently. What was Maria describing?

minimum efficient scale

The scale of output that a production facility must operate at to realize all major plant-level scale economies is called the ______.

minimum efficient scale

A(n) ______ factory is thought of as an intelligence-gathering unit.

outpost

What is a basic tenet of the TQM approach?

poor quality materials are not acceptable

A global distribution center acts as the order-______ part of the order-fulfillment process.

processing

All the activities involved in manufacturing an article for sale or a service to be provided are known as ______.

production

Sanjay was making a list of all the activities his company would need to do in order to create the new line of golf clubs. All of these activities demonstrate the ______ of the golf clubs.

production

Genevieve works for a company that manufactures office furniture. It is her responsibility to source component parts such as casters, laminate, and plastic to make the office furniture. Genevieve works in ______.

purchasing

Which part of the supply chain is involved with buying raw materials, component parts, and other products used in the manufacturing of a company's final product?

purchasing

Flexible manufacturing involves a range of manufacturing technologies designed to accomplish what three things? reduce setup times increase utilization of machines provide customers with minimal quality and low cost improve quality control use the most expensive technology

reduce setup times increase utilization of machines improve quality control

What two resources are included in the downstream portion of the global supply chain? raw materials retailer wholesaler consumer

retailer wholesaler

Which type of production facility is capable of overcoming tariff barriers and reducing taxes for the company?

server factory

Matthew has an opportunity to manage one of the factories for his company. He will direct the purchase of raw materials that his company uses to make office furniture. Matthew will be the manager of a(n) ______ factory.

source

The primary purpose of a _______ _______ is also to drive down costs in the global supply chain

source factory

The Six Sigma approach assesses productivity levels and waste levels by developing a(n) ______.

statistical model

What name is given to the integration and coordination of logistics, purchasing, operations, and market channel activities?

supply chain management

Riley's company realized it could not make the component parts at its plant in Thailand because that plant did not have the necessary manufacturing tooling to do the job. This demonstrates how ______ plays a role in where a company produces.

technology

What is the main difference between a source factory and an offshore factory?

the source factory plays a more strategic role

The value-to-weight ratio influences a company's ______ costs.

transportation

According to the text, the two keys to interorganizational relationships are ______.

trust commitment

The inbound supply chain is another name for the _______ (upstream or downstream?) portion of the global supply chain.

upstream

Country, technology and production factors influence a company's decision on ______ to produce internationally.

where