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8. Global Manufacturing And Supply Management

Q1. What is supply chain management? Describe the global manufacturing process. Ans. Supply Chain Management: Supply chain encompasses the coordination of materials, information, and funds from the initial raw material supplier to the ultimate customer. Global Manufacturing Strategies: Four key factors in manufacturing strategies: The success of a global manufacturing strategy depends on four key factors: Compatibility, Configuration, Coordination and Control. 1. Compatibility: Compatibility is the degree of consistency between FDI decisions and a companys competitive strategy. Here are some company strategies that managers must consider: Efficiency/ cost- Reduction of manufacturing costs. Dependability- Degree of trust in a companys products, its delivery, and price promises. Quality- Performance reliability, service quality, speed of delivery, and maintenance of quality of the products. Innovation- Ability to develop new products and ideas. Flexibility- Ability of the production process to make different kinds of products and to adjust the volume of output.

2. Manufacturing Configuration: The three basic configurations that MNEs consider as they establish a global manufacturing strategy are Centralized, Regional, and Multi-domestic. Centralized Manufacturing Strategy: The first configuration is to have centralized manufacturing that offers a selection of standard lower-priced products to different markets. That is basically a manufacture-and-export strategy. It is common for new-to-export companies to use this strategy, typically through their home-country manufacturing facilities. Regional Manufacturing Strategy: The second configuration is the use of regional manufacturing facilities to serve customers within a specific region. Multi-Domestic Manufacturing Strategy: Third, market expansion in individual countries, especially when the demand in those countries becomes significant, might argue for a multi-

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domestic approach in which companies manufacture products close to their customers, using country specific manufacturing facilities to meet local needs. 3. Coordination and Control: Coordination is linking or integrating activities into a unified system. Control can be the measuring performance so companies can respond appropriately to changing conditions. Another aspect of control structure is the organizational structure. Q4. What is information technology? Ans. Information Technology: Information technology is a key to making the global supply chain work is a good information system. 1. Electronic Data Interchange (EDI): The electronic linkage of suppliers, customers and third party intermediaries to expedite documents and financial flows. 2. Enterprise Resource Planning (ERP): Software that can link information flows from different parts of a business and from different geographic areas. 3. Material Requirements Planning (MRP): Computerized information system that addresses complex inventory situations and calculates the demand for parts from the production schedules of the companies that use the parts. 4. Radio Frequency ID (RFID): A system that labels products with an electronic tag that stores and transmits information regarding the products origin, destination and quantity. 5. E-commerce: The use of the internet to join together suppliers with companies and companies with customer. 6. Private Technology Exchange (PTX): An online collaboration model that brings manufacturers, distributers, value added resellers, and customers together to execute transactions.

Q5. What is quality? Ans. Quality: Quality is defined as meeting or exceeding the expectations of the customer. More specifically, it is the conformance to specifications, value, fitness for use, support (provided by the company), and psychological impressions.

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Q6. What is the difference between Zero Defects and Acceptable Quality Level? Ans. Zero Defects Versus Acceptable Quality Level: Zero Defects: The refusal to tolerate defects of any kind. Acceptable Quality Level (AQL): A tolerable level of defects that can be corrected through repair and service warranties. Q7. Describe the Deming Approach To Quality Management: Ans. Demings 14 Points: Demings 14 points encompass the idea that the responsibility for quality resides within the policies and practices of managers. 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. Create constancy of purpose. Adopt a new philosophy. Cease mass inspection. End awarding business on the basis of price tag. Constantly improve the system. Institute training on the job. Improve leadership. Drive out fear. Break down barriers between departments. Eliminate slogans. Eliminate work standards. Remove barriers to pride. Institute education and self improvement. Put everybody to work.

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Q8. Write short notes. Total Quality Management: It is a process that stresses customer satisfaction, employee involvement, and continuous improvement of quality. Its goal is to eliminate defects. Six Sigma: Six sigma is a highly focused system aimed at eliminating defects, slashing product cycle times, and cutting costs across the abroad. Quality Standards: Level of Quality Standards: General level- ISO 9000, Malcolm Baldrige National Quality Award. Industry specific level. Company level.

ISO 9000: A global set of quality standards intended to promote quality at every level of an organization. ISO 14000: A quality standard concerned with environmental management. Q9. Why Global Sourcing? Ans. Companies pursue global sourcing strategies for a number of reasons1. To reduce costs- due to less expensive labor, less restrictive rules, and lower land and facilities cost. 2. To improve quality. 3. To increase exposure to worldwide technology. 4. To improve the delivery of supplies process. 5. To strengthen the reliability of supply by supplementing domestic with foreign with suppliers. 6. To gain access to materials that is only available abroad, possibly because of technical specifications or product capabilities. 7. To establish a presence in a foreign market. 8. To satisfy offset requirements.

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9. To react to competitors offshore sourcing practices.

Q10. Define Inventory management. Ans. Inventory management: Distance, time, and uncertainty in foreign environments cause foreign sourcing to complicate inventory management. Risks in foreign sourcing: Foreign sourcing can create big risks for companies that use lean manufacturing. It is hard to combine foreign sourcing and JIT (just-in-time) production without having safety stocks of inventory on hand, which defeats the concept of JIT. The kanban system: A system that facilitates that JIT by using cards to control the flow of production through a factory.