Bài giảng Global Business Today - Chapter 15 Global Production, Outsourcing, and Logistics

Global Business Today 8eby Charles W.L. HillChapter 15Global Production, Outsourcing, and LogisticsIntroductionIn today’s global economy, firms must decide:Where to locate productive activities What the long-term strategic role of foreign production sites should be Whether to own foreign production activities or outsource those activities How to manage a globally dispersed supply chain and what the role of Internet-based information technology should be in the management of global logistics Whether to manage global logistics or outsource Strategy, Production, and LogisticsQuestion: How can production and logistics be conducted internationally to lower the costs of value creation and add value by better serving customer needs?Production refers to activities involved in creating a productLogistics refers to the procurement and physical transmission of material through the supply chain from suppliers to customersThe Six Sigma system, a direct descendant of total quality management (TQM), aims to reduce defects, boost productivity, eliminate waste, and cut costs throughout a companyWhere to ProduceQuestion: Where should production activities be located? When deciding where to locate production facilities, firms must consider:Country factorsTechnological factorsProduct factors Strategic Role of Foreign FactoriesQuestion: Does the rationale for establishing a foreign production facility change?The strategic role of foreign factories and the strategic advantage of a particular location can change over timeA factory initially established to make a standard product to serve a local market, or to take advantage of low cost inputs, can evolve into a facility with advanced design capabilities As governmental regulations change and/or countries upgrade their factors of production the strategic advantage of a particular location can changeMake-or-Buy DecisionsQuestion: Should an international business make the component parts to go into their final product or outsource them? Make-or-buy decisions (decisions about whether to perform a certain value creation activity in-house or outsource it to another firm) are important to a firm’s manufacturing strategy Make-or-Buy DecisionsMaking component parts in-house (vertical integration) is attractive because it:Is associated with lower costsFacilitates investments in highly specialized assetsProtects proprietary technologyFacilitates the scheduling of adjacent processesMake-or-Buy DecisionsBuying component parts from independent suppliers (outsourcing) is attractive because it:Gives the firm greater flexibilityHelps drive down the firm's cost structureHelps the firm to capture orders from international customers Make-or-Buy DecisionsThe benefits of manufacturing components in-house are greatest when:Highly specialized assets are involvedVertical integration is necessary for protecting proprietary technologyThe firm is more efficient than external suppliers at performing a particular activitySome firms have tried to use strategic alliances to capture some of the benefits of vertical integration, without having the associated organizational problems Managing a Global Supply Chain Question: Why is logistics important to the international firm?Logistics encompasses the activities necessary to get materials to a manufacturing facility, through the manufacturing process, and out through a distribution system to the end user Complicated by distance, time, exchange rates, and customs barriers, etc.Efficient logistics can have a major impact upon a firm's bottom line Managing a Global Supply ChainQuestion: How can a just-in-time inventory process help a firm? A just-in-time (JIT) economizes on inventory holding costs by having materials arrive at a manufacturing plant just in time to enter the production process, and not beforeCan result in major cost savings from reduced warehousing and inventory holding costs Can help firms spot defective parts, take them out of the manufacturing process, and boost product quality Managing a Global Supply ChainQuestion: What is the role of information technology in materials management? Electronic data interchange (EDI):Facilitates the tracking of inputsAllows the firm to optimize its production scheduleAllows the firm and its suppliers to communicate in real timeEliminates the flow of paperwork between a firm and its suppliers