1. Copyright © 2011 Pearson Education 17-1 International Business Environments and Operations, 13/e Global Edition Part 6 Managing International Operations

2. Copyright © 2011 Pearson Education 17-2 Chapter 17 Global Manufacturing and Supply- Chain Management

3. Copyright © 2011 Pearson Education 17-3 Chapter Objectives To describe the different dimensions of a global manufacturing strategy To examine the elements of global supply-chain management To show how quality affects the global supply chain To illustrate how supplier networks function To explain how inventory management is a key dimension of the global supply chain To present different alternatives for transporting products along the supply chain from suppliers to customers

4. Copyright © 2011 Pearson Education 17-4 What is Supply Chain Management? Supply chain—the coordination of materials, information, and funds from the initial raw-material supplier to the ultimate customer. Logistics—part of the supply-chain process that plans, implements, and controls the efficient, effective flow and storage of goods, services, and related information from the point of origin to the point of consumption in order to meet customers’ requirements.

5. Copyright © 2011 Pearson Education 17-5 Global Manufacturing Strategies Four Key Factors: Compatibility Configuration Coordination Control

6. Copyright © 2011 Pearson Education 17-6 Compatibility Company managers must consider the following strategies: Efficiency/Cost Dependability Quality & Innovation Flexibility

7. Copyright © 2011 Pearson Education 17-7 Manufacturing Configuration Centralized manufacturing in one country Manufacturing facilities in specific regions to service those regions Multidomestic facilities in each country

8. Copyright © 2011 Pearson Education 17-8 Coordination Control Control systems, such as organizational structure and performance measurement systems, ensure that managers implement company strategies.

9. Copyright © 2011 Pearson Education 17-9 Information Technology and Global Supply Chain Management Electronic Data Interchange Enterprise Resource Planning/Material Requirements Planning Radio Frequency ID (RFID) E-Commerce

10. Copyright © 2011 Pearson Education 17-10 Quality Zero Defects versus Acceptable Quality Level The Deming Approach to Quality Management Total Quality Management Six Sigma

11. Copyright © 2011 Pearson Education 17-11 Quality Standards Levels of quality standards: General level—ISO 9000, Malcolm Baldrige National Quality Award Industry-specific level Company level

12. Copyright © 2011 Pearson Education 17-12 Supplier Networks Global Sourcing Major Sourcing Configuration The Make or Buy Decision Supplier Relations The Purchasing Function

13. Copyright © 2011 Pearson Education 17-13 Global Sourcing

14. Copyright © 2011 Pearson Education 17-14 Major Sourcing Configuration Vertical integration Outsourcing through industrial clusters Other outsourcing

15. Copyright © 2011 Pearson Education 17-15 Make or Buy Decision Make or buy—outsource or supply parts from internal production If MNEs outsource parts instead of sourcing them from internal production, they need to determine the degree of involvement with suppliers.

16. Copyright © 2011 Pearson Education 17-16 Supplier Relations Supplier relationships are very important but sometimes complicated, especially for MNEs trying to manage supplier relationships around the world –Case: Toyota –Case: JCPenney

17. Copyright © 2011 Pearson Education 17-17 The Purchasing Function Global progression in the purchasing function: Domestic purchasing only Foreign buying based on need Foreign buying as part of a procurement strategy Integration of global procurement strategy

18. Copyright © 2011 Pearson Education 17-18 Major Sourcing Strategies Assign domestic buyers for foreign purchasing. Use foreign subsidiaries or business agents. Establish international purchasing offices. Assign the responsibility for global sourcing to a specific business unit or units. Integrate and coordinate worldwide sourcing.

19. Copyright © 2011 Pearson Education 17-19 Inventory Management Lean Manufacturing and Just-In-Time Systems –Risks in Foreign Systems –The Kanban System Foreign Trade Zones Transportation Networks

20. Copyright © 2011 Pearson Education 17-20 Future: Uncertainty and the Global Supply Chain Globalization encourages companies to outsource to foreign suppliers to reduce costs. Political events increase the risk of supply chain disruption.

21. Copyright © 2011 Pearson Education 17-21 All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without the prior written permission of the publisher. Printed in the United States of America.