1. John Wiley & Sons, Inc c 19981 GLOBAL SOURCING STRATEGY: R & D, MANUFACTURING, AND MARKETING INTERFACES Chapter Ten

2. John Wiley & Sons, Inc c 19982 Global Sourcing Strategy: R & D, Manufacturing, and Marketing Interfaces zOverview z1. Extent and Complexity of Global Sourcing Strategy z2. Trends in Global Sourcing Strategy z3. Value Chain and Functional Interfaces z4. Logistics of Sourcing Strategy z5. Costs and Consequences of Global Sourcing

3. John Wiley & Sons, Inc c 19983 Overview zThree major limitations of the international product cycle theory y1. The trend to increased pace of new product introduction and reduction in innovational lead time y2. Ability to preempt the product life cycle- predictable sourcing development during the product life cycle. y3. More active management of locational and corporate resources on a global basis.

4. John Wiley & Sons, Inc c 19984 1. Extent and Complexity of Global Sourcing Strategy zExhibit 10-1 Honda’s Worldwide Production and Sourcing Network

5. John Wiley & Sons, Inc c 19985 2. Trends In Global Sourcing Strategy yExhibit 10-2 Factors that Affect Global Sourcing Strategy zTrend 1: The Decline of Exchange Rate Determinism of Sourcing zTrend 2: New Competitive Environment Caused by Excess Worldwide Capacity yExhibit 10-3 Key Factors for Sourcing from Abroad

6. John Wiley & Sons, Inc c 19986 2. Trends in Global Sourcing Strategy (cont) zTrend 3: Innovations in and Restructuring of International Trade Infrastructure zTrend 4: Enhanced Role of Purchasing Managers zTrend 5: Trend Towards Global Manufacturing

7. John Wiley & Sons, Inc c 19987 3. Value Chain and Functional Interfaces yExhibit 10-4 Value Chain Concept yExhibit 10-5 Interfaces Among R&D, Manufacturing, and Marketing zR&D/Manufacturing Interface zManufacturing/Marketing Interface yCore Components Standardization yProduct Design Families yUniversal Product with All Features yUniversal product with Different Positioning zMarketing/R&D Interface

8. John Wiley & Sons, Inc c 19988 4. Logistics Of Sourcing Strategy yExhibit 10-6 Types of Sourcing Strategy zIntra-Firm Sourcing zOutsourcing

9. John Wiley & Sons, Inc c 19989 5. Costs and Consequences of Global Sourcing zNeed for Coordination zFunctional Mismatch zLong - Term Consequences yStrategic Alliances yDependence yGradual Loss of Design and Manufacturing Abilities