Global sourcing, production and logistics

Production
1. Activities involved in creating a product
Logistics
1. Transmission from procurement to distribution.
Stratetegic Objectives
1. 1. Lowering Costs
2. 2. Increasing Product Quality
3. 3. Accommodating Demands For Local Responsiveness
4. 4. Responding to Shifts in Customer Demand
Where to produce
1. Country factors
  1. Skilled labor and supporting industries.
  2. Formal and informal trade barriers.
  3. Expectations about future exchange rate changes.
  4. Transportation costs.
2. Technological factors
  1. The level of fixed costs
  2. The minimum efficient scale
  3. The flexibility of the technology
3. Product factors
  1. Product's value-to-weight ratio
  2. Whether the product serves universal needs
The strategic role of foreign factories
1. Outsourcing Production
  1. Make-or-buy decisions
2. The advantages of make
  1. Lower cost
  2. Facilitate investments in highly specialized assets
  3. Protect proprietary technology
3. The advantages of buy
  1. Greater flexibility
  2. Drive down the firm’s cost structure
Managing a Global Supply Chain
1. At the lowest possible cost
2. Establish a competitive advantage through superior customer service.
3. The role of just-in-time inventory
  1. Major cost savings from reduced warehousing and inventory holding
4. The role of information technology and the internet
  1. Allow firms to track materials in real time and optimize production scheduling according to when components are expected to arrive.

Resource summary

	Created by Betsy Carolina Rodriguez about 5 years ago