Chp 17: Global Production and Supply Chain Management

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

make-or-buy decision

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

ISO 9000

certification process that requires certain quality standards (required by EU)

flexible manufacturing technology or lean production

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 3) improve quality control at all stages of the manufacturing process

source factory

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

flexible machine cells

grouping of various types of machinery, a common materials handler, and a centralized cell controller (computer)

global learning

idea that valuable knowledge does not reside in just a firms's domestic operations

outpost factory

intelligence-gathering unit

lead factory

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

just-in-time inventory system

materials arrive at a manufacturing plant just in time to enter the production process and not before

total quality management (TQM)

need to improve the total quality of a firm's offerings

purchasing

part of supply chain that includes the worldwide buying of things used in manufacturing of company's products and services

logistics

plans, implements, and controls effective flows and inventory of raw material, component parts, and products used in manufacturing

upstream supply chain

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

downstream supply chain

portion of the supply chain from the production facility to the end-consumer

Packaging

primary (holds the product itself), secondary (designed to contain several primary packages), and transit (outer packaging envelope that allows for easier handling or product transfer among international suppliers, manufacturers, distribution centers, retailers, and any other intermediaries in the global supply chain)

reverse logistics

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

minimum efficient scale

scale of output a plant must operate to realize all major plant-level scale economies

global supply chain management

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

Six Sigma

statistically-based methodology for improving product quality

mass customization

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

global inventory management

the decision-making process regarding the raw materials, work-in-process (component parts), and finished goods inventory to hold, in what form to hold it, and where to locate it in the supply chain

supply chain management

the integration and organization of information and logistics activities across firms in a supply chain for the purpose of creating and delivering products and services that provide value to consumers

transportation

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