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Global Manufacturing System Presentation Transcript
1.Global Manufacturing System
2.Global manufacturing in International business
3.Why Manufacture Globally?
To describe different dimensions of global manufacturing strategy
To examine the elements of global supply chain management
To show how quality affects the global supply chain
To illustrate how supplier networks function
To explain how inventory management is a key dimension of the global supply chain
To present different alternatives for transporting products along the supply chain from suppliers to customers
To describe different dimensions of global manufacturing strategy
To examine the elements of global supply chain management
To show how quality affects the global supply chain
To illustrate how supplier networks function
To explain how inventory management is a key dimension of the global supply chain
To present different alternatives for transporting products along the supply chain from suppliers to customers
4.Global Manufacturing Strategies
Manufacturing
Setting up a subsidiary versus Virtual Manufacturing
Depends on manufacturing compatibility
What is manufacturing compatibility?
Compatibility depends on:
Efficiency
Dependability
Quality
Flexibility
Innovation
Manufacturing
Setting up a subsidiary versus Virtual Manufacturing
Depends on manufacturing compatibility
What is manufacturing compatibility?
Compatibility depends on:
Efficiency
Dependability
Quality
Flexibility
Innovation
5.Global Manufacturing Strategies
Manufacturing Configuration
Should manufacturing be centralized in one country or should we have manufacturing facilities in specific zones to service those zones or should we go multidomestic with a facility in each country
When should we have a centralized location?
When should we go for multidomestic location?
Coordination and Control
Linking or integrating activities into a unified system is called COORDINATION
Defining organizational structure and reporting systems to ensure timely implementation of policies is termed as CONTROL
Manufacturing Configuration
Should manufacturing be centralized in one country or should we have manufacturing facilities in specific zones to service those zones or should we go multidomestic with a facility in each country
When should we have a centralized location?
When should we go for multidomestic location?
Coordination and Control
Linking or integrating activities into a unified system is called COORDINATION
Defining organizational structure and reporting systems to ensure timely implementation of policies is termed as CONTROL
6.Outline
Information Systems and global supply chain management
Issues of Quality and Global Supply Chain
Quality standards and Global Supply Chain
Make or buy decision
Inventory management
Transportation Networks
Information Systems and global supply chain management
Issues of Quality and Global Supply Chain
Quality standards and Global Supply Chain
Make or buy decision
Inventory management
Transportation Networks
7.MAJOR ELEMENTS
8.Global Supply Chain Management
Meaning of Supply Chain Management
Describes managers’ effort to oversee the flows of raw materials, components, information, and finance through their network of suppliers, assemblers, and distributors, and customers located around the world.
Elements of Supply Chain Management
Supply Chain Management and Enterprise Resource Planning (ERP)
E-Commerce
Internet, intranet, and extranet
Meaning of Supply Chain Management
Describes managers’ effort to oversee the flows of raw materials, components, information, and finance through their network of suppliers, assemblers, and distributors, and customers located around the world.
Elements of Supply Chain Management
Supply Chain Management and Enterprise Resource Planning (ERP)
E-Commerce
Internet, intranet, and extranet
9.ROLE OF INFORMATION SYSTEMS
coordinate, schedule, and control
procurement,
production,
inventory management, and
delivery of products and services
coordinate, schedule, and control
procurement,
production,
inventory management, and
delivery of products and services
10.ROLE OF INFORMATION SYSTEMS
Integrate
demand planning,
production forecasting,
materials requisition,
order processing,
inventory allocation,
order fulfillment,
Integrate
demand planning,
production forecasting,
materials requisition,
order processing,
inventory allocation,
order fulfillment,
11. Role of information system and Technology
Track component parts across the globe to an assembly plant
Optimize and adjust production scheduling
Electronic data interchange (EDI)
Used to coordinate flow of materials between suppliers ,firm, shippers and customers
Communicate without time delay
Increases flexibility and responsiveness of the whole global system
Paperwork decreased
Significant competitive advantage
Track component parts across the globe to an assembly plant
Optimize and adjust production scheduling
Electronic data interchange (EDI)
Used to coordinate flow of materials between suppliers ,firm, shippers and customers
Communicate without time delay
Increases flexibility and responsiveness of the whole global system
Paperwork decreased
Significant competitive advantage
12.Role of Information Systems and Technology
Variation in connectivity internet was modified and used in terms of Private technology exchange (PTX).
A collaboration modal that brings manufactures, value added reseller,distributer and customer together for transaction and to share information about demand,availability,productivity and more.
Variation in connectivity internet was modified and used in terms of Private technology exchange (PTX).
A collaboration modal that brings manufactures, value added reseller,distributer and customer together for transaction and to share information about demand,availability,productivity and more.
13.Quality
Six sigma is used instead of TQM.
Eliminate defects, slash product cycle time and cut cost.
Reduce variability and achieve ‘ZERO' defects.
Meet world class standard
Six sigma is used instead of TQM.
Eliminate defects, slash product cycle time and cut cost.
Reduce variability and achieve ‘ZERO' defects.
Meet world class standard
14.A general level
Deming Award
Malcolm Baldridge National Quality Award
An industry level
ISO
A company level
Deming Award
Malcolm Baldridge National Quality Award
An industry level
ISO
A company level
15.Make or buy Decisions
Should a firm make or buy the component parts that go into their final product?
Advantages of making own components:
Lower costs if most efficient producer
Facilitating specialized investments
Proprietary product technology protection
Improved scheduling
Should a firm make or buy the component parts that go into their final product?
Advantages of making own components:
Lower costs if most efficient producer
Facilitating specialized investments
Proprietary product technology protection
Improved scheduling
16.Advantages of buy versus make
Strategic flexibility in sourcing components
Lower firm’s cost structure
Offsets
Strategic alliances with suppliers give benefits of vertical integration without the associated organizational problems
Strategic flexibility in sourcing components
Lower firm’s cost structure
Offsets
Strategic alliances with suppliers give benefits of vertical integration without the associated organizational problems
17.Supply Chain Management
LINKAGE OF ACTIVITIES
BUYING
MAKING
MOVING
INTEGRATES
SUPPLIER
DISTRIBUTOR
LOGISTICS REQUIREMENTS
LINKAGE OF ACTIVITIES
BUYING
MAKING
MOVING
INTEGRATES
SUPPLIER
DISTRIBUTOR
LOGISTICS REQUIREMENTS
18.Inventory Management
Objective of inventory management in managing a firm’s global supply chain
Maintain lowest possible cost
In a way that best serves the customer’s needs
Role of just-in time inventory
Economize on inventory holding costs
Speeds inventory turnover
Drawback: no buffer stock
Objective of inventory management in managing a firm’s global supply chain
Maintain lowest possible cost
In a way that best serves the customer’s needs
Role of just-in time inventory
Economize on inventory holding costs
Speeds inventory turnover
Drawback: no buffer stock
19.Traditional organizational structure
20.Organization structure with materials management as separate function
21.Transportation Services
22.Challenges for Global Manufacturing
23.Country factors
Optimum economic, political, and cultural conditions
Externalities
Skilled labor pools
Supporting industries
Formal and informal trade barriers
Exchange rate
Optimum economic, political, and cultural conditions
Externalities
Skilled labor pools
Supporting industries
Formal and informal trade barriers
Exchange rate
24.Technological factors
Fixed costs
Minimum efficient scale
Flexible manufacturing
reduce setup times for complex equipment
increase machine utilization
improve quality control
flexible machine cells to perform a variety of operations
Fixed costs
Minimum efficient scale
Flexible manufacturing
reduce setup times for complex equipment
increase machine utilization
improve quality control
flexible machine cells to perform a variety of operations
25.A typical unit cost curve
26.Product factors and location strategies
Two product features affect location decisions:
Value to weight ratio.
Product serves universal needs
Two basic strategies
Concentrating in a centralized location and serving the world market
Decentralizing them in various regional or national locations close to major markets when opposite conditions exist
Two product features affect location decisions:
Value to weight ratio.
Product serves universal needs
Two basic strategies
Concentrating in a centralized location and serving the world market
Decentralizing them in various regional or national locations close to major markets when opposite conditions exist
27.Centralized location
Factor costs have substantial impact
Low trade barriers
Externalities favor certain location
Stable exchange rates
High fixed costs, high minimum efficient scale
relative to global demand or flexible manufacturing technology
Product’s value-to-weight ratio is high
Product serves universal needs
Factor costs have substantial impact
Low trade barriers
Externalities favor certain location
Stable exchange rates
High fixed costs, high minimum efficient scale
relative to global demand or flexible manufacturing technology
Product’s value-to-weight ratio is high
Product serves universal needs
28.Decentralized location
Factor costs do not have substantial impact
High trade barriers
Location externalities not important
Exchange rates volatile
Low fixed costs, low minimum efficient scale
Flexible manufacturing technology unavailable
Product’s value-to-weight ratio is low
Significant differences in consumer tastes and preferences exist between nations.
Factor costs do not have substantial impact
High trade barriers
Location externalities not important
Exchange rates volatile
Low fixed costs, low minimum efficient scale
Flexible manufacturing technology unavailable
Product’s value-to-weight ratio is low
Significant differences in consumer tastes and preferences exist between nations.
29.DELL’S GLOBAL PRODUCTION NETWORK: CASE STUDY
30.DELL’S Customer Segments
31.Glimpses
1 Product Development U.S. centralized same base product sold worldwide
2 Customized for different regional and country markets with appropriate power supplies, keyboards, software and documentation.
3 Functions such as IT and e-commerce applications usually originate in the U.S.
1 Product Development U.S. centralized same base product sold worldwide
2 Customized for different regional and country markets with appropriate power supplies, keyboards, software and documentation.
3 Functions such as IT and e-commerce applications usually originate in the U.S.
32. adopted with modifications in other areas.
4 Always updated manufacturing processes at any location and same processes adopted in other houses.
4 Always updated manufacturing processes at any location and same processes adopted in other houses.
33.Strange
Dell does not manufactures its own components or subassemblies, handles final assembly for nearly all of its desktop PCs and servers. Notebook PCs manufactured by
Quanta and Compal.
34.At times the notebook PCs are shipped
complete to the final customer, Dell is incre -asingly ordering base units from its
suppliers and doing final configuration of
notebooks in order to offer more configurati-on options to customers.
Dell does not manufactures its own components or subassemblies, handles final assembly for nearly all of its desktop PCs and servers. Notebook PCs manufactured by
Quanta and Compal.
34.At times the notebook PCs are shipped
complete to the final customer, Dell is incre -asingly ordering base units from its
suppliers and doing final configuration of
notebooks in order to offer more configurati-on options to customers.
35.Important Aspects
A location of manufacturing
B location decisions
C sourcing
D other operations
A location of manufacturing
B location decisions
C sourcing
D other operations
36.Location of Manufacturing
Dell organizes manufacturing by region, operating one or more assembly plants to serve its major markets.
37.Location Decisions
Market Access
Labor Costs
Transportation and Information Infrastructure
Government Incentives
Market proximity
Dell organizes manufacturing by region, operating one or more assembly plants to serve its major markets.
37.Location Decisions
Market Access
Labor Costs
Transportation and Information Infrastructure
Government Incentives
Market proximity
38.TEXAS
Headquarters Austin in 1984
1994 incentives provided by Round Rock
usual 2% tax on Dell sales
the city rebates tax abatement of 100% for 5 years
Moved to Round Rock now have 12,000 workers
Headquarters Austin in 1984
1994 incentives provided by Round Rock
usual 2% tax on Dell sales
the city rebates tax abatement of 100% for 5 years
Moved to Round Rock now have 12,000 workers
39.Austin
1 high-volume Metric 12 plant
2 assembling an estimated 4 million PCs
per year
a incentives
b relatively low-cost workforce
c tendency to expand existing capacity
1 high-volume Metric 12 plant
2 assembling an estimated 4 million PCs
per year
a incentives
b relatively low-cost workforce
c tendency to expand existing capacity
40.Local state incentives
Transport infrastructure
Labor supply
100 acres of airport area property valued $6.5 million leasing of another 600 acres for 40 years
abatement of all property taxes on the facilities for 40 years
Transport infrastructure
Labor supply
100 acres of airport area property valued $6.5 million leasing of another 600 acres for 40 years
abatement of all property taxes on the facilities for 40 years
41.Eldorado do sul
1enabled Dell to avoid tariffs that can nearly double the price of an imported $1,000 PC
2 largest market in South America
3 without tariff to Argentina, Uruguay, Paraguay
42.EMEA
1 assembly plant in Limerick, Ireland
2 low cost, high quality, non-union labor
3 cooperation from technical schools and universities
4 low corporate taxes-VAT
5 no exchange rate risk- EURO
1enabled Dell to avoid tariffs that can nearly double the price of an imported $1,000 PC
2 largest market in South America
3 without tariff to Argentina, Uruguay, Paraguay
42.EMEA
1 assembly plant in Limerick, Ireland
2 low cost, high quality, non-union labor
3 cooperation from technical schools and universities
4 low corporate taxes-VAT
5 no exchange rate risk- EURO
43.6 Irish Development Agency helped Dell find land, set up its facilitiesand assisted job training
7 presence of suppliers such as Intel and
Microsoft
44.Penang
chosen for its central location in the region,
reasonable wage rates and attractive incenti-ves(5 year tax holiday, high-tech 30%)
45.Xiamen
1home to a number of Taiwanese computer and components makers
2necessary to sell in the main land China market
46.Sourcing
Dell has avoided outsourcing final assembly, it outsources subassemblies, like motherboa-rds and bare-bone PCs, and outsources nearly complete assembly of notebook PCs, doing only limited final configuration in its own assembly plants.
47.By outsourcing its manufacturing completely, Dell might be creating its own competitors. Sourcing of materials for PCs (major co-ponents and systems)-done centrally, sourcing of consumables is local (box and shipping material, printing of keyboards, printing of manuals, etc.)-done regionally.
7 presence of suppliers such as Intel and
Microsoft
44.Penang
chosen for its central location in the region,
reasonable wage rates and attractive incenti-ves(5 year tax holiday, high-tech 30%)
45.Xiamen
1home to a number of Taiwanese computer and components makers
2necessary to sell in the main land China market
46.Sourcing
Dell has avoided outsourcing final assembly, it outsources subassemblies, like motherboa-rds and bare-bone PCs, and outsources nearly complete assembly of notebook PCs, doing only limited final configuration in its own assembly plants.
47.By outsourcing its manufacturing completely, Dell might be creating its own competitors. Sourcing of materials for PCs (major co-ponents and systems)-done centrally, sourcing of consumables is local (box and shipping material, printing of keyboards, printing of manuals, etc.)-done regionally.
48.majority of sourcing is from low cost su-ppliers in Asia, but some sourcing is from local producers.
major components, Dell looks for suppliers with global capabilities such as Intel, SCI,IBM, Samsung, Toshiba
49.Other Factors
1 Logistics- supply hub within 30 min
2 Call Centers- sales and technical supports, regional
3 Marketing: Sales and Supports
Marketing from global and regional headquarters; sales, service and support from regional
major components, Dell looks for suppliers with global capabilities such as Intel, SCI,IBM, Samsung, Toshiba
49.Other Factors
1 Logistics- supply hub within 30 min
2 Call Centers- sales and technical supports, regional
3 Marketing: Sales and Supports
Marketing from global and regional headquarters; sales, service and support from regional
50.Other Factors
telephone technical support is cenralized, field service and support require location cl-ose to the customer
4 IT and Data Centers- manufacturing, logistics
5 Service Partners-service and repair with firm partners like IBM, Unisys, Wang and Banctec
51.INDIA: Global Manufacturing Hub
1 Creation of 100 million additional jobs in the next 10 years.
2 Increasing the share of manufacturing in GDP to 25 percent by 2022 from current around 16 percent.
3 Liberalisation in labor and environment regulations.
telephone technical support is cenralized, field service and support require location cl-ose to the customer
4 IT and Data Centers- manufacturing, logistics
5 Service Partners-service and repair with firm partners like IBM, Unisys, Wang and Banctec
51.INDIA: Global Manufacturing Hub
1 Creation of 100 million additional jobs in the next 10 years.
2 Increasing the share of manufacturing in GDP to 25 percent by 2022 from current around 16 percent.
3 Liberalisation in labor and environment regulations.
52.National Manufacturing Policy
4 Single window clearance for all issues related to industrial units.
5 Setting up of national investment and manufacturing zones.
6 Mega industrial township equipped with world-class infrastructure proposes to be autonomous and self-regulated.
4 Single window clearance for all issues related to industrial units.
5 Setting up of national investment and manufacturing zones.
6 Mega industrial township equipped with world-class infrastructure proposes to be autonomous and self-regulated.
53.7 Holding company created to develop infrastructure on public-private-partnership mode.
8 Incentives to states for infrastructure development.
9 Incentivisation of green technology.
10 Financial and tax incentives to small and medium enterprises.
8 Incentives to states for infrastructure development.
9 Incentivisation of green technology.
10 Financial and tax incentives to small and medium enterprises.
54.REFRENCES
1 International Business by Daniels,
Pearson Education India
2 http://www.yousigma.com
3http://www.dailypioneer.com/home/online-channel/business-a-finance/16644-execution-seen-as-key-in-manufacturing-policy-success.html
1 International Business by Daniels,
Pearson Education India
2 http://www.yousigma.com
3http://www.dailypioneer.com/home/online-channel/business-a-finance/16644-execution-seen-as-key-in-manufacturing-policy-success.html
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