GMS 724 Study Guide - Final Guide: Total Quality Management, Kaizen, Materials Management

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Published on 30 Nov 2011
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***Chapter 17: Global Manufacturing and Supply-Chain Management***
What is Supply-Chain Management
Supply chain: coordination of materials, information, and funds from initial raw material supplier to
ultimate customer (supply chain is bigger)
Logistics: (Aka. Materials management) 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
GLOBAL MANUFACTURING STRATEGIES
Four Key Factors in Manufacturing Strategy
1. Compatibility: degree of consistency between FDI decisions and a company\s competitive strategy
a. Efficiency/cost – cost minimization strategies and the drive for global efficiencies force MNEs
to establish economies of scale in manufacturing
i. offshore manufacturing: any investment that takes place in a country other than the
home country
ii.total cost analysis: an in depth assessment of the complete cost of a transaction that
takes into account acquisition, ownership, and disposal costs
b. Dependability – customer demand, prompt deliveries, risks of not being able o get
components or finished goods to market on time as supply chain lengthens, thus shortening
distance in supply chain = increase dependability
c. Quality – if foreign operations can ensure high quality and contribute to innovation, companies
will continue to set up operations abroad
d. Innovation – when companies invest abroad to take advantage of low cost labour, they are not
as concerned about innovation
e. Flexibility – need it because of differences in national markets may result in regional
manufacturing to service local markets (may not be able to produce all products in one location
and ship them around the world)
2. Manufacturing Configuration
a. Centralized manufacturing strategy – selection of standard and lower priced products to
difference markets (basic manufacture and export strategy), common to new companies
b. Regional manufacturing strategy – facilities to serve customers within specific region
c. Multidomestic manufacturing strategy – companies manufacture products close to their
customers, using country specific manufacturing facilities to meet local needs
Rationalization: process where countries often also specialize in the production of parts
of final goods
1. Coordination: linking or integrating activities into a unified system
2. Control – such as organizational structure and performance measurement systems, ensure that
managers implement company strategies
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INFORMATION TECHNOLOGY AND GLOBAL SUPPLY-CHAIN MANAGEMENT
Key to making the global supply chain work is good information system
Companies rely more and more on information technology (IT) to meet their needs:
QUALITY
Quality: meeting or exceeding expectations of a customer
Conformance to specifications, value, fitness for use support (provided by the company), and
psychological impressions (image)
Zero Defects Acceptable Quality Level
refusal to tolerate defects of any kind
idea perfected by Japanese
tolerable level of defects that can be corrected
through repair and service warranties
required buffer inventories rework stations, and
expediting
goal is to push through products fast as possible
and deal with mistakes later
inferior to zero defects because companies take
quality more seriously, thus beat competition
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Document Summary

Supply chain: coordination of materials, information, and funds from initial raw material supplier to ultimate customer (supply chain is bigger) Key to making the global supply chain work is good information system. Companies rely more and more on information technology (it) to meet their needs: Quality: meeting or exceeding expectations of a customer. Conformance to specifications, value, fitness for use support (provided by the company), and. Zero defects refusal to tolerate defects of any kind idea perfected by japanese. Deming"s 14 points encompass the idea that the responsibility for quality resides within the policies. Improve leadership and practices of managers: create constancy of purpose, adopt a new philosophy, cease mass inspection, end awarding business son the basis of price tag, constantly improve the system. 7: drive out fear, break down barriers between departments, eliminate slogans, eliminate work standard, remove barriers to pride, institute education and self improvement, put everybody to work.

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