ppt presentation on scm

1. Global Manufacturing
& SCM

2. Introduction
Supply Chain encompasses
coordination of materials,
information and funds from initial
raw material supplier to the
ultimate consumer

3. Success of a Global
Manufacturing strategy
Compatibility
Configuration
Coordination
Control

4. Manufacturing
Compatibility• Degree of consistency between foreign
investment and the firm’s competitive
strategy
• Cost minimizing strategies and drive for
global efficiencies drive many firms for
low labor markets
• Off shore manufacturing escalated in the
60’s in countries like Singapore and
Taiwan

5. Manufacturing Configuration
• Need to analyze the configuration on
manufacturing facilities
• Three strategies firms consider
– Centralized manufacturing units to produce
standard low priced variants for the entire
market
– Use regional manufacturing units to cater to
regional units
– Market expansion in individual countries
based on significant development

6. Coordination & Control
• Coordinating involves purchasing to
warehousing to shipping
• Coordination should be worked out
when manufacturing configurations
are worked upon
• Control can be the measuring of the
performance so that firms can adapt

7. Information Systems as
part of GSCM
• Information is the key
• Some companies use Electronic Data
interchange (EDI) to link suppliers,
customers, manufacturers &
intermediaries
• Wal-Mart uses EDI to link itself with the
suppliers, and it usually process $ 214
billion worth of transactions annually
• EDI limits itself in terms of connecting

8. • ERP is another technology that has
its impact on global SCM
• Firms like dell use new tech like e-
commerce in getting order from
customers and passing info to the
suppliers
• The challenge is the lack of tech in
the developing economies
• E-commerce sill accounts for only
2% of all trade
Information Systems as
part of GSCM

9. Quality in GSCM
• Quality is meeting or exceeding customer
expectations
• It is the adherence to the specifications,
value, fitness to use, support by the firm
and psychological impressions
• Dell had to take back few lakh of its
laptops b’coz of defect batteries, ford
motors lost close to $ 1 billion b’coz of
faulty firestone tires
• Firms are now turning towards the

10. Total Quality
Management
• TQM is a process that stresses 3 principles
– Customer satisfaction
– Employee involvement
– Continuous improvement in quality
• The goal is TQM is to maintain zero defects
• The difference between AQL and TQM is the
attitude, while AQL is the thing that exceeds
engineers expectation, TQM is that which
exceeds customer expectation

11. • TQM is a process of continuous
improvement at all levels of the firms,
company trying to achieve quality at all
levels
• TQM is a proactive strategy
• Firms that have adopted zero defects
policy find that in the long-run production
costs decline as defects decline
Total Quality
Management

12. • Three levels of quality standards
– General level (Deming and Malcolm
Bridge National Quality Award)
– An industry specific level
– A company level
Quality Standards

13. Quality Standards
• As a part to establish EU, through ISO in
Geneva, ISO 9000 certification was
effected in 1987
• It is a set of five universal standards for
quality assurance which can apply
uniformly for any firm in any industry and
in any sizes
• Today ISO has been adopted by over
160 countries around the world
• Under ISO 9000: 2000, companies must
document about how workers perform
every function

14. Supplier Networks
• Sourcing is the first step of materials
management
• To be global a firm must choose to
‘abroad’ at least once in the entire
operations
• Firms can manufacture parts
internally or source from suppliers
• Home country sourcing enables
firms to avoid problems in the areas
of language diff, lengthy supply

15. Reasons for using Global
Sourcing
• Reduce cost
• Improve Quality
• Increase exposure to world wide
tech
• Establishing presence in foreign
markets
• As a check to competitors strategies

16. Supplier Relations
• Crucial for any firm
• Firms if not willing to integrate vertically
then have to maintain the right
relationship with the supplier
• Toyota pioneered the Toyota Production
system
• Toyota identifies two suppliers who can
compete aggressively

17. Purchasing Function
• Link between firm’s sourcing
decision and its supplier relationship
• Like firms going global , purchasing
goes through phases to become
‘global’
– Domestic purchasing only
– Foreign buying based on need
– Foreign buying as a part of
procurement strategy
– Integration of global procurement
system
• Once firms go global with purchase,

18. Five major sourcing
strategies
• Assign domestic buyers for
international purchasing
• Use foreign subsidiaries or business
agents
• Establish international purchasing
offices
• Assign global sourcing to specific

19. Inventory Management
• When company sources parts from various
suppliers across the world uncertainly prevails
• A small closure of the ports for few days can
result in firms losing millions of dollars
• Playmates toys Inc suffered when US west
coast ports were closed for 10 days due to labor
dispute
• It affected its peak season sales time, and the
firm had to resort to costly mode to transporting
to air freight

20. JIT systems
• The JIT system gets the raw
materials, components to the buyer
‘just-in-time’ for use, whereby
cutting cost on large inventories
• The challenge of JIT is the quality of
defect-less components and timely
arrival
• Dell wished to revolutionize this
concept in this production floor
• If supplier is a foreign supplier it
would be too risky to have this in
place