Supply Chain Management Presentation Revision 8


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Supply Chain Management Presentation Revision 8

  1. 1. Global Manufacturing and Supply Chain Management Victoria Vivian
  2. 2. Globalization and Business Chapter 7: Global Manufacturing and Supply Chain Management <ul><li>Introduction </li></ul><ul><li>Global Manufacturing Strategy </li></ul><ul><ul><li>The Four C’s </li></ul></ul><ul><li>Global Supply Chain Management </li></ul><ul><ul><li>Configuration </li></ul></ul><ul><ul><li>Information’s Role </li></ul></ul><ul><li>Potential Weak Links in the Global SC </li></ul>
  3. 3. Why manufacture abroad
  4. 4. Successful stories <ul><li>HP in Guadalajara, Mexico </li></ul><ul><li>Established in 1982 </li></ul><ul><li>Several lines of production </li></ul><ul><li>R&D </li></ul><ul><li>IT and Finance </li></ul><ul><li>Latin American Distribution Operation </li></ul><ul><li>Employs 1500 experts </li></ul>
  5. 5. One more successful story <ul><li>Motorola in Singapore </li></ul><ul><li>Established in 1973 </li></ul><ul><li>Start as a sales office with 6 employees </li></ul><ul><li>1983- Motorola Excellence Center </li></ul><ul><li>1994 – Motorola Innovation Center </li></ul><ul><li>Employs 2,000 people </li></ul><ul><li>Manufacturing </li></ul><ul><li>R&D </li></ul><ul><li>Software design </li></ul><ul><li>Marketing </li></ul><ul><li>Sales and Distribution </li></ul><ul><li>HR, Finance, etc </li></ul>
  6. 6. Declining tariffs <ul><li>Nissan closed its plant in Clayton, Australia in 1992 (20 years of manufacturing) </li></ul><ul><li>Mitsubishi shut down its Adelaide plant with losses of 930 jobs </li></ul><ul><li>Australian operation lost $1.5 billion over the past decade </li></ul>
  7. 7. It’s getting more complicated <ul><li>Low wages do not mean low total costs. </li></ul><ul><li>Xerox in Shanghai </li></ul><ul><li>Motorola in Tianjin </li></ul><ul><li>The companies have to trade off low labor costs for more qualified employees. </li></ul>
  8. 8. Labor pool and costs (cont) <ul><li>Salaries in China have been increasing at a rate of 8% for the last five years, and are forecast to rise by more than 9% in 2008 </li></ul><ul><li>High pay increases in India last year (7.2%) continue into 2008 </li></ul><ul><li>US employees are predicted to see real increases of just 1.4% </li></ul>
  9. 9. Six strategic roles of foreign factories
  10. 10. Germany: Export Champions <ul><li>Devise excellent technical solutions </li></ul><ul><li>Obsession with quality and over-engineering </li></ul><ul><li>Number one exporter in the world </li></ul><ul><ul><ul><li>Neumann microphones </li></ul></ul></ul><ul><ul><ul><li>C. Bechstein pianos </li></ul></ul></ul>
  11. 11. German Exports in 2006
  12. 12. Germany: Export Champions <ul><li>The Export Champions – Decoupled from the home economy </li></ul><ul><ul><li>Do their standards need to be so high? </li></ul></ul><ul><ul><li>Making Germany’s unskilled labor pool more competitive-not their problem </li></ul></ul><ul><ul><li>“ Bazaar Economy” share of imported inputs to German goods destined for export increased from 30% to 39% between 1995 and 2002 </li></ul></ul>
  13. 13. Germany: Export Champions <ul><li>Future Implications </li></ul><ul><ul><li>Improve education on a basic level </li></ul></ul><ul><ul><li>Integration of the non-German population </li></ul></ul><ul><ul><li>Britain’s solution – 1980s saw high unemployment – created many service industries </li></ul></ul><ul><ul><li>Must be able to acknowledge business failure </li></ul></ul>
  14. 14. Secrets, Lies, and Sweatshops <ul><li>Some companies guilty of Chinese labor abuses in their supplier’s factories. </li></ul><ul><ul><li>Possible Solutions for the Chinese Labor Abuses </li></ul></ul><ul><ul><li>Companies such as GE & Motorola have not had problems with labor abuses, and this seems to be due to the fact that they own and operate their factories in China </li></ul></ul><ul><ul><li> </li></ul></ul><ul><ul><li> </li></ul></ul>
  15. 15. Discussion Questions <ul><li>Lean Production in an International Supply Chain </li></ul><ul><ul><ul><ul><ul><li>Why would a company allow or even promote the geographical dispersion of any value added activities in its supply chain? </li></ul></ul></ul></ul></ul><ul><ul><ul><ul><ul><li>Do you think that just because CCT accomplished a couple of the factors which define lean production it’s entire production process can be characterized as lean? </li></ul></ul></ul></ul></ul><ul><li>Germany: Export Champions </li></ul><ul><ul><ul><li>What are the potential drawbacks for a company that ignores its home market in favor of an emphasis on exporting? </li></ul></ul></ul><ul><ul><ul><li>What factors need to be considered when determining the right balance of global centralization versus local decentralization? </li></ul></ul></ul>