SCM 300 Module 7 Study Guide
SCM 300 Module 7 Study Guide SCM 300
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This 4 page Study Guide was uploaded by Nicolle Desmarais on Monday February 16, 2015. The Study Guide belongs to SCM 300 at Arizona State University taught by eduardo davila in Fall2014. Since its upload, it has received 685 views.
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Date Created: 02/16/15
SCM 300 Module 07 Study Packet Module 07 International Supply Chain Issues Mdim Assiqnmentg Our textbooks do not support this material so rather than bog you down with readings on documentation and intermediaries I m assigning a somewhat interesting articles that discuss the planning required to develop a global supply chains This will be covered on the exam In addition to the cases amp the material from lecture please also know these 4 additional terms 1 Offshoring When a company moves manufacturing out of its home country to another country Example of offshorina Ford Motors has a significant offshoring strategy While the American company Ford Motors has manufacturing plants in the United States it also has plants around the world in many countries including China Germany Brazil Russia and South Africa 2 Outsourcing When a company contracts an outside firm to perform services operations or business processes that were previously performed inhouse 3 Contract manufacturer A company that produces goods on behalf of another organization Examples of outsourcina and contract manufacturing Apple designs numerous digital devices but they outsource manufacturing to companies like Foxconn and Pegatron Foxconn and Pegatron would therefore be considered Apple s contract manufacturers 4 Business process outsourcina The outsourcing of office activities like accounting human resources customer service activities like call centers and customer chat Sometimes these types of outsourced activities are referred to as back office activities Example of business process outsourcinq IBM offers business process outsourcing to companies in the US and around the world IBM offers companies help in the areas of employee recruitment supply chain services customer care and management of financial data If you owned a small company you might consider having IBM help manage these types activities rather than developing departments internally CASE Unsafe for Children Mattel s Toy Recalls and SCM Domino 117132 1 Provide a basic background of the recall problem Lead paint was used for over 15 million toys some that could be ingested by children Two weeks later the owner of the factory in China where the toys were manufactured committed suicide 2 Explain Mattel s Supply Chain Be able to discuss Mattel s basic supply chain structure from design to retail In general who was responsible for what Core brand vs noncore brands By 2007 about hald of Mattel s toy revenues came from core products produced in factories owned by the company The rest of its chinese production primarily non core items were made in by local vendors Suppliers were closely monitored lead paint for example some even fired for violations Mattel developed about 5000 new products each year First they were produced in small batches and when full production began random toys were taken off for inspection Required that factories in its supply chain use certified vendors even if the cost was higher 3 Pressures on Chinese Manufacturers WalMArt and other companies pressured lower prices on Mattel They wanted to agree because Wlamart Toys R Us and Target made up 41 percent of total sales in 2007 The pressure to lower prices affected suppliers 4 Reasons for toy recalls Lead paints defects in product designs product misuse 5 Brief description of each of the recall incidents Lee Der Industrial bought paint from his best friend painting company Dongxing Dongxing ran out of a and ordered some off the internet with a fake lead free certificate Lee Der was forced to close SCM 300 Instructor Eddie iDavila SCM 300 Module 07 Study Packet Cheung got enough money from the equipment to pay his employees with bonuses He hung himself two weeks later in the factory Second recall Early Light subcontractor repeatedly failed to pick up paint that but was required to buy Mattel tested the Sarge car toy and found it had lead in it The toys were recalled but because Choi had political connections was allowed to continue business and remained profitable More recalls recalls due to magnets in Barbie play sets polly pockets etc More toys were recalled in September due to lead paint by contactors who had hired subcntractors How did each incident occur In particular how did the lead paint incident occur Who were the primary parties involved Subcontractors who bought paint Lee Der who used a company that Mattel didn t know about which then bought paint when they ran out form a unvalidated company What were the negative impacts to Mattel related to these recall issues Had a lot of returns that totaled 100 million but still was able to make a profit of 600 million Which was better than the year prior Loss of trust and bad reputation Also the made in china brand suffered and they had to build the trust of American companies and consumers once again CASE Rapid Fire Fulfillment HARVARD CASES 1 I What were the key lessons Ortega took away from his early scare In order to be successful you need to have five fingers touching the customer and fiver fingers touching the factory Control what happens to your product until the customer buys it What are some of the things Zara can do because of the superresponsive supply chain it has built Can create a new product and have it in store in 15 days receives higher net profit than competitors keeps almost half of its production in house intentionally leaves extra capacity small batches of clothing it has no outside partners How is Zara s supply chain different from most other supply chains in their industry above What are the three principles Zara lives by Know what these principles mean and how they are carried out Close the communication loop Stick to a rhythm across the entire chain spends money on anything that will improve speed and reliability of the supply chain Leverage your capital assets in order to increase supply chain flexibility It produces complicated products in house and outsources simple one Describe Zara s Design and Production center in La Coruna Three speacious halls one women men and children This makes communication easier and that way channels don t have to deal with problems in other channels Communication is quick and efficient The atmosphere is open and cheery Feedback is welcome and the environment encourages creative thinking They communicate with store managers weekly to hear hpow customers reacted to new styles How does Zara control the bullwhip effect Constantly selling out so that encourages consumers to buy a different product There is a constant flow of updated data What are some positive customer behaviors Zara sees because of its operational plan Why does Zara prefer to own production assets It gives Zara the flexibility and control over the schedules and capacities that its senior managers aregue would othenNise be impossible What types of products does Zara produce themselves Complex items Which items do they outsource Easy items that have a simple dye process to them SCM 300 Instructor Eddie iDavila SCM 300 Module 07 Study Packet Module 07 is based on tons of stories and examples not covered in this study guide Having knowledge of what was discussed in lecture is vital to surviving this portion of the exam If you didn t showup to lecture this portion of the exam will be a horrible horrible experience Remember this every time an exam question begins According to the lecture Globalization basics Slides 02 o How can a globalization strategy open up opportunities for increased profits for a company 0 Increase rvenues globally new markets maging risk understanding markets and trends 0 Decrease costs globally cheap labor and resources taxes and tariffs decrease costs globally Manufacturing and Outsourcing Issues Slides 0312 0 Provide examples of why American companies would want to manufacture in foreign countries 0 Provide examples of why foreign companies would want to manufacture in the United States 0 European company cars easier to sell in US good for us consumers as well only if string dollar scenario Bad if it is a weak dollar scenario 40000 euro car selling for 80000 us dollars 0 Describe the EMS industry and how they can be beneficial 0 Companies that take on many parts of the supply chain in producing electronics Cost advantage Total supply chain services Higher quality Flexibility Focus on your strengths Fast start 0 Strong start Be able to calculate profits in strong and weak currency scenarios Know the difference between the four quadrants depicted in Slide 09 What are the positives and negatives of outsourcing manufacturing abroad utilizing outside business partners 0 Low cost labor resources energy Proximity to customers lead times logistics costs Infrastructure channels of distribution Proximity to suppliers lead time and costs supplier relationships Speedy start up and speedy expansion Resource utilization Focus on core competencies 000000 000000 Negatives 0 Quality control protect your brand 0 Capacity and growth related concerns 0 Loss of strategic flexibility dynamic markets Global Logistics Slides 1315 0 What is CTPAT Based on the lecture discuss the value of the program to companies and the US government Describe the 3 tier system what are the difficulties associated with volunteering for the program 0 Customer Trade Partnership Against Terrorism corporation accept responsibilities for their supply chains 0 Voluntary program with benefits for participants Instructor Eddie IDavila SCM 300 Module 07 Study Packet 0 Three tier system teir one must perform risk analysis take steps to controlimprove weaknesses Tier two validated tier 1 findingd by US customs Tier 3 Green Iane follow supply chain best practices 0 Why are American companies considering importing products via Mexican ports What are some of the challenges of using a Mexican port strategy Close to the US high utilization affordable no hassle imports NAFTA super railway Global Retail and Service Slide 1618 Lots of examples stories and their associated lessons Harry Potter and Deathly Hollows book amp highest book in distribution stores on first day Global Procurement Slides 1921 0 What were some of the general lessons learned from the procurement perceptions study discussed in class 0 Perceptions and risks 0 Categories of perception local market sourcing transportation cost flexibility govt support political flexibility o on his slide labor cost work ethic security of intellectual property attraction of local market reliably meet customer requirements 0 Labor cost and property protection are usually opposite if one is high then other is low 0 China s big mentality ItI carrier shortage 0 India growth of retail 1000 maIIs built in last 10 years 0 o What are some of the challenges of procuring products and services at the global level Apple supply chain top of list of best supply chains in the world suppIiers and contractors buying up capacity empIyee working conditions ar foxcon warehousin postponement of packaging where do they warehouse and package Shipping via ship or plane Air because they saved so much money in warehouse and packing Understanding the risks and the tradeoffs Certifying suppliers maintenance providers etc Certified 2nol tier suppliers for your 1St tier suppliers Developing partnerships Meet Build trust Negotiate Maintaining relationships Growth Improvement Quality control Understanding legal issues Understanding financial issues Differences between purchasing materials and services Global Sunplv Chains Slide 1618 Lots of examples stories and their associated lessons Regions of the world Companies Industries Instructor Eddie IDavila
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