Chap016.pptVIP

Chapter Global Manufacturing and Materials Management Case: Competitive advantage at Dell Dells business model based on direct selling of customized product at low prices Location advantages (Brazil, Ireland, Malaysia, China US) Close to markets Low shipping costs Speed of delivery Supply base global Dell manages global supply chain to minimize inventory and customize PCs in three days Materials management Activity that controls the transmission of physical materials through the value chain Includes procurement, production and into distribution Logistics : Procurement and physical transmission of materials through the supply chain, from suppliers to customers Manufacturing and materials management Strategic objectives Lower costs Disperse manufacturing activities to efficient global locations Increase productivity Using Total Quality Management (W. Edward Demming) Manufacturing and materials management Strategic objectives Accommodate demands for local responsiveness decentralize production Respond quickly to shifts on customer demand time-based competition extremely important The relationship between quality and cost Where to manufacture? Country factors Optimum economic, political, and cultural conditions Externalities Skilled labor pools Supporting industries Formal and informal trade barriers Exchange rate 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 Manufacturing location Fixed costs are substantial Minimum efficient scale is high Flexible manufacturing technologies available Fixed costs are low Minimum efficient scale is low Flexible manufacturing technologies unavailable Trade barriers and transportation costs remain major impediments A typical unit cost curve Product factors and location strategies Two product features affect location decisio