IB 3101 Lecture Notes - Lecture 9: Vertical Integration, Communication Problems, Dynamic Capabilities
Document Summary
In today"s global economy, firms must decide: 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. Today we will talk about how production and logistics functions can be conducted internationally to: Production - activities involved in creating a product. Logistics - the procurement and physical transmission of material through the supply chain, from suppliers to customers. Two other objectives are important for multinational companies in their production and logistics functions: 1. production and logistics functions must be able to accommodate demands for local responsiveness. 2. production and logistics must be able to respond quickly to shifts in customer demand. When deciding where to locate production facilities, firms must consider: