International management 4321 - Ch. 15

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.

Mass Customization

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

internal

_________ production makes sense when substantial investments in specialized assets are required

Manufacturing

__________________ should be located where economic, political, and cultural conditions are most conducive to the performance of that activity. Create a global web of activities; Global concentrations of activities at certain locations

JIT

a _____ system leaves the firm with no buffer stock of inventory to meet unexpected demand or supply changes

Downstream Supply Chain

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

multiple

when fixed costs are low, ____________ production plants may be possible allows firms to respond to local demands

low

when minimum efficient scale is ____, respond to local market demands and hedge against currency risk by operating in multiple locations.

high

when minimum efficient scale is _____, choose centralized production in a single location or a limited number of locations

falls

when products serve universal needs, the need for local responsiveness ______, and concentrating manufacturing in a central location makes sense

Global Distribution Center

A facility that positions and allows customization of products for delivery to worldwide wholesalers or retailers, or directly to customer 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. often set up to overcome intangible and tangible barriers in the global marketplace, such as tariff barriers, reduce taxes, reinvest money made in the region. also to reduce or eliminate costly global supply chain operations that would be needed if the factory were located much farther away from the end customers.

Outpost factory

A factory that can be viewed as an intelligence-gathering unit. Often placed near a competitor's headquarters or main operations, near the most demanding customers, or near key suppliers of unique and critically important parts. has a function to fill in production, often operates as a server factory as well.

Offshore

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 new processes, products, and technologies that can be used throughout the global firm in all parts of the world. Usually located in an area where highly skilled employees can be found. managers and employees at the site have a direct connection to and say in which suppliers to use, what designs to implement, and other issues that are of critical importance to the core competencies of the global firm.

Contributor Factory

A factory that serves a specific country or world region. has much more of a choice in terms of which suppliers to use for raw materials and component parts. often competes with firm's home factories for testing new ideas and products. has its own infrastructure when it comes to development, engineering, and production. standalone

Source Factory

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

turnover, workmanship, quality, productivity

Before making the decision to locate production in a foreign location firms must consider the potential for: 1. high employee _________ 2. poor ______________ 3. poor product ________ 4. low _____________

responsive

Firms should locate production so that production and logistics can be locally _______________

demand

Firms should locate production so that production and logistics can respond quickly to shifts in customer __________

Country factors, Technological factors, Product Factors

Firms should these three factors when deciding where to locate production activities:

wider

Flexible manufacturing technologies allows the company to produce a ______ variety of end product at a unit cost that at one time could be achieved only through the 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 produce a family of products

lower, availability

Improvement in a facility comes from: 1. Pressure to ______ costs or respond to local markets 2. An increase in the ___________ of advanced factors of production

capacity

In reality, the make-or-buy decision is often based largely on two critical factors: cost and production _________

1. both fixed costs and the minimum efficient scale of production are relatively low 2. appropriate flexible manufacturing technologies are not available

Production in multiple locations makes sense when:

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. Aims to reduce defects, boost productivity, eliminate waste, and cut costs throughout the company.

Flexible manufacturing Technology or Lean Production

Manufacturing technology designed to improve job scheduling, reduce setup time, and improve quality control. also referred to as Lean Production

Upstream Supply Chain

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

1. fixed costs are substantial 2. the minimum efficient scale of production is high 3. flexible manufacturing technologies are available

Production should be concentrated in a few locations when:

Six Sigma

Statistically based methodology for improving product quality. Aims to reduce defects, boost productivity, eliminate waste, and cut costs throughout the company

strategic, evolve

The _________ role of foreign factories and the strategic advantage of a particular location can change over time. Factories established to take advantage of low cost labor can _______ into facilities with advanced design capabilities

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.

Supply Chain management

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

role, say

The main difference between a source factory and an offshore factory is the strategic _____ of the factory, which is more significant for a source factory than for an offshore factory. Managers in a source factory have more of a ____ in certain decisions.

Transportation

The movement of inventory through the supply chain

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. procurement and physical transmission of material through the supply chain, from suppliers to customers

Global Supply Chain Coordination

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

Make-or-buy decisions

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

hidden

There may be _______ costs associated with foreign production

fixed, scale, flexibility

Three characteristics of a manufacturing technology are of interest here: the level of _____ costs, the minimum efficient ______, and the _________ of the technology

ratio, universal

Two product factors impact location decisions; the product's value-to-weight _______ and whether the product serves __________ needs

1. the availability of skilled labor and supporting industries 2. formal and informal trade barriers 3. expectations about future exchange rate changes 4. transportation costs 5. regulations affecting FDI

With Country Factors, firms should consider;

mass

_____ customization has been coined to describe 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

service

________ firms also face make-or-buy decisions

Production

activities involved in creating a product

ISO 9000

certification process that requires certain quality standards must be met. The EU requires that the quality of a firm's manufacturing processes and products be certified under this quality standard.

in

if a firm is more efficient at that production activity than any other enterprise, manufacturing ___-house makes sense

single

if fixed costs are high, produce in a ______ location or a few locations

ratio, high

if the value-to-weight ______ is _____, produce the product in a single location and export to other parts of the world

ratio, low

if the value-to-weight ______ is _____, there is greater pressure to manufacture the product in multiple locations across the world

proprietary

in-house production makes sense when component parts contain _____________ technology

easier

planning, coordination, and scheduling of adjacent processes can be _______ with in-house production

Just-in-time (JIT)

systems economize on inventory holding costs by having materials arrive at a manufacturing plant just in time to enter the production process. 1. Generate major cost savings from reduced warehousing and inventory holding costs 2. can help the firm spot defective parts and take them out of the manufacturing process

Global learning

the flow of skills and product offerings from foreign subsidiary to home country and from foreign subsidiary to foreign subsidiary. I mplies that firms are less likely to switch production to new locations simply because some underlying variable like wage rates has changed

The Minimum efficient Scale

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

Purchasing

the part of the supply chain that include the worldwide buying of raw material, components parts, and products used in manufacturing of the company's products and services.