International Business

Chapter Eighteen
Global Manufacturing and
Supply Chain Management

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2004, Prentice Hall, Inc
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2004, Prentice Hall, Inc
Chapter Objectives
Describe different dimensions of global
manufacturing strategy
Examine elements of global supply chain
management
Show how quality effects global supply chain
Illustrate how supplier networks function
Explain how inventory management is a key
dimension of the global supply chain
Present different alternatives for transporting
products along the supply chain from suppliers to
customers
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2004, Prentice Hall, Inc
Supply Chain Terms
Supply chains the coordination of
materials, information, and funds from the
initial raw material supplier to the ultimate
customer
Logistics (materials management) that
part of the supply chain process that
plans, implements, and controls the
efficient, effective flow and storage of
goods, services, and related information
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2004, Prentice Hall, Inc
Global Manufacturing and Supply
Chain Management in International
Business
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2004, Prentice Hall, Inc
Factors Managers Must Consider
Efficiency/cost-reduction of
manufacturing costs
Dependability-degree of trust in a
companys products and its delivery
and promises
Innovation-ability to develop new
products and ideas
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2004, Prentice Hall, Inc
Factors Managers
Must Consider, cont
Quality-performance reliability,
service quality, speed of delivery,
and maintenance quality of the
product
Flexibility-ability of the production
process to make different kinds of
products and to adjust the volume of
output

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2004, Prentice Hall, Inc
Manufacturing Configurations
Centralized manufacturing offering a
selection of standard, lower-priced
products to different markets
Regional manufacturing to serve
customers within a specific region
Multi-domestic manufacturing (market
expansion) in individual countries as their
demand becomes significant so
manufacturing is closer to customers and
meeting local needs
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2004, Prentice Hall, Inc
Studying Supply Chain Alternatives
Customer requirements
Plant and distribution center network design
Inventory management
Outsourcing and 3
rd
-party logistics relationships
Key customer and supplier relationships
Business processes
Information systems
Organizational design and training requirements
Performance metrics
Performance goals
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2004, Prentice Hall, Inc
Quality
Quality is the ability to meet
or exceed the expectations of
the customer
Conformance to specifications
Value
Fitness for use
Support provided by the
company
Psychological impressions
(image)

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2004, Prentice Hall, Inc
Quality Terms
Acceptable Quality Level (AQL) premise
allows an acceptable level of bad quality
Total Quality Management (TQM) is a
philosophy to eliminate all defects
TQM stresses:
Customer satisfaction
Employee involvement
Continuous improvement
TQM focuses on:
Benchmarking
Product and service design
Process design
purchasing

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2004, Prentice Hall, Inc
Levels of Quality Standards
General level
ISO 9000
Malcolm Baldridge National Quality
Award
Industry-specific level
Company level
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2004, Prentice Hall, Inc
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2004, Prentice Hall, Inc
Supplier Networks
Companies can manufacture parts
internally or purchase them from
external manufacturers
make or buy decision
Outsourcing is the process of a
company having inputs supplied to it
from outside suppliers for the
production process
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2004, Prentice Hall, Inc
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