Global Production, Outsourcing, and Logistics.ppt

Global Production, Outsourcing, and Logistics Discussion Section April 6, 2007 Brian Chen Agenda Review Chapter 15 (Export/Import) Review Chapter 16 (Global Production) Briefly Discuss Dell Case Global Production Group Discussion Chapter 15: Export/Import/Countertrade Outline some of the tremendous advantages and common pitfalls of exporting Identify the primary sources of information available to firms interested in exporting Describe the nuts and bolts of exporting L/C, Draft (Bill of Exchange), Bill of Lading What do these documents serve to do? To transfer the risk of nonperformance to a third party specializing in taking such risks Suggest how firms can use the EXIM bank and insurance to facilitate exports Chapter 16: Global Production, Outsourcing, and Logistics Where should production be located and should they be concentrated or dispersed? What should be the long-term strategic role of foreign production sites? Should the firm abandon a foreign site if factor costs change, or is there value to maintaining an operation at a given location even if economic conditions change? Should the firm own foreign production or should production be outsourced? How should a globally-dispersed supply chain be managed? Should the firm manage the logistics or outsource their management? Dell Case: Question 1 What are the advantages to Dell of having manufacturing sites located where they are? What are the potential disadvantages? Answer Dell’s manufacturing sites are in Brazil, China, Malaysia, Ireland, and the U.S. Advantages of these locations are that some of them are low cost (Brazil, China, Malaysia and, relatively, Ireland), they have educated work forces that are highly productive, and they are near large regional markets. Dell Case: Question 2 Why does Dell purchase most of the components that go into its PC from independent suppliers, as opposed to making more itself? (Does does little more than final assembly of components into PC) Answer Dell outsources because