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Costs
Inventory
Material
Production
Localised
Global
Contra Evidence of
homogenisation:
Food firms adapt to national
characteristics.
Growth of intra-country
segmentation:
growing demand for
differentiated products.
Centralised Inventories:
Centralising Inventory = less total inventory.
Square root rule
25
to
Postponement:
Design products using simple common
platforms, using common components.
Assembly does not take place until required.
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Organisational Integration
Recognition of the importance of taking a systems
view of business.
Difficulty of achieving integration in functionally fixated
organisations.
Throughput Management
The process of linking manufacturing and
procurement to the needs of the market.
Requirement for reducing the length of the
supply chain pipeline!
Target:
Lower cost, higher quality, greater variety,
more flexibility, faster response times.
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Globalisation
Move to commodity markets and component
specialisation:
firms shop freely amongst the nations of the world
Singer Sewing machines: Shells from US, motors from
Brazil, drive shafts from Italy, machine assembled in
Taiwan
References
Christopher, M., (1998), Logistics and Supply
Chain Management. Strategies for Reducing Cost
and Improving Service, Financial Times Pitman
Publishing, London
Levitt, T. (1983), The Globalisation of Markets,
Harvard Business Review May/Jun.
Douglas, S., & Wind, Y., (1987), The Myth of
Globalisation, Columbia Journal of World
Business, Winter.
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