GLOBAL MANUFACTURING AND SUPPLY CHAIN MANAGEMENT
•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
Important objectives shared by the global manufacturing and supply chain functions are to simultaneously lower costs and increase quality by eliminating defects from both processes. Chapter Seventeen examines supply chain networks to see how firms can manage the various links most effectively. The chapter begins by discussing global manufacturing strategy. It then moves on to explore supply chain management issues, quality standards and supplier networks. The chapter concludes with a discussion of inventory management and the development of effective transportation networks.
OPENING CASE: Samsonite’s Global Supply Chain
[See Map 17.1, Figures 17.1–3]
This case describes how Samsonite, a U.S.-based corporation that manufactures and distributes both hardside and softside luggage, developed its global manufacturing and distribution systems. Samsonite began its operations in 1910 in Denver, Colorado, but it took many years to become a global firm after moving first through decentralized and then centralized supply-chain structures. By the end of the 1960s, Samsonite was manufacturing luggage in the Netherlands, Belgium, Spain, Mexico, and Japan; it was also marketing luggage worldwide through a variety of distributors. During the 1990s, Samsonite expanded throughout Eastern Europe and established several joint-venture operations in China and other parts of Asia as well. As Samsonite expanded throughout the world, it entered into subcontract arrangements in Asia and Eastern Europe for outsourced parts and finished goods in order to supplement its own production. By 2002, Samsonite’s European operations alone had grown to six company-owned production facilities and one joint-venture facility, plus a series of subsidiaries, joint ventures, retail franchises, distributors and agents set up to service the European market. R&D is done both in Europe and the United States.
Teaching Tip: Review the PowerPoint slides for Chapter Seventeen and select those you find most useful for enhancing your lecture and class discussion. For additional visual summaries of key chapter points, also review the figures in the text.
The supply chain function encompasses the sourcing and coordination of materials, information and funds from the initial raw material supplier to the final customer. It concerns the management of the value-added process from the supplier’s supplier to the customer’s customer. Suppliers can be part of the manufacturer’s organizational structure, as in the case of a vertically integrated organization, or they can be independent organizations. An important part of the supply chain function is logistics (aka materials management), which encompasses the planning, implementation and control of the efficient and effective flow and storage of products and information from the point of origin to the final customer. Because the supply chain is quite broad, the coordination of the network actually occurs through interactions within the network. The greater the geographic spread of the firm, the more difficult it becomes to manage the supply chain effectively.
II.GLOBAL MANUFACTURING STRATEGIES
The success of a global manufacturing strategy depends on four key factors: (i) compatibility, (ii) configuration, (iii) coordination and (iv) control. A.Manufacturing Compatibility
Compatibility refers to the degree of consistency between a firm’s foreign...