Lehrstuhl für Allgemeine BWL Strategisches und Internationales Management Prof. Dr. Mike Geppert Carl-Zeiß-Str Jena

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1 Lehrstuhl für Allgemeine BWL Strategisches und Internationales Management Prof. Dr. Mike Geppert Carl-Zeiß-Str Jena

2 Contents I. Learning Objectives II. III. IV. Recap of last lecture True / False Questions Multiple Choice Questions V. Essay Questions Folie 2

3 Learning Objectives 1. Get an overview of the connection between strategy, production and logistics in the context of a firm operating internationally. Folie 3

4 I. Recap of last lecture I. Strategy, production and logistics II. III. Where to produce? Country, technological and product factors Make-or-buy decisions Folie 4

5 Strategy, Production, and Logistics The strategic objectives of the production and logistics function are to lower costs to increase product quality by eliminating defective products from both the supply chain and the manufacturing process Folie 5

6 Strategy, Production, and Logistics Management tools to increase the reliability of product offerings: Total quality management (TQM) Six Sigma quality improvement program European Union s ISO 9000 standards Folie 6

7 Where to produce Locating Production Facilities Table 10.1: Location Strategy & Production Folie 7

8 Make-or-Buy Decisions Make-or-buy decisions (decisions about whether to perform a certain value creation activity in-house or outsource it to another firm) are important to a firm s manufacturing strategy Folie 8

9 The Advantages of Make 1. Lowering Costs 2. Facilitating Specialized Investments 3. Protecting Proprietary Technology 4. Improving Scheduling Folie 9

10 The Advantages of Buy 1. gives the firm greater flexibility 2. helps drive down the firm's cost structure 3. helps the firm to capture orders from international customers Folie 10

11 II. True/False Questions 1. The production and logistics functions of an international firm are independent of each other. 2. A firm that improves its quality control cannot reduce its costs of value creation simultaneously. 3. In international business, a relatively high level of fixed costs can make it economical to perform a particular activity in several locations at once. Folie 11

12 Lehrstuhl für ABWL / Strategisches und Internationales Management III. Multiple Choice Questions 1. refers to the activity that controls the transmission of physical materials through the value chain, from procurement through production and into distribution. A. Promotion B. Recruitment C. Logistics D. Benchmarking E. Inshoring Folie 12

13 Lehrstuhl für ABWL / Strategisches und Internationales Management III. Multiple Choice Questions 2. An important objective shared by both production and logistics functions of an international firm is to: A. increase profits by lowering quality. B. increase foreign competition. C. lower costs by dispersing production activities. D. decrease inventory turnover. E. stock excess inventory on hand. Folie 13

14 Lehrstuhl für ABWL / Strategisches und Internationales Management III. Multiple Choice Questions 3. The principal tool that most managers now use to increase the reliability of their product offering is, a statistically based methodology for improving product quality. It is a direct descendant of the total quality management philosophy. A. Six Sigma B. lean manufacturing C. just-in-time inventory D. ISO 9000 E. mass customization Folie 14

15 Lehrstuhl für ABWL / Strategisches und Internationales Management III. Multiple Choice Questions 4. Which of the following statements is true about make-or-buy decisions? A. Make-or-buy decisions are applicable only to physical products and not service activities. B. Historically, most outsourcing decisions have involved the manufacture of physical products. C. Information technology companies in the United States are testing code in-house and outsourcing the code writing process. D. Domestic businesses do not suffer from problems regarding outsourcing decisions. Folie 15

16 Lehrstuhl für ABWL / Strategisches und Internationales Management IV. Essay Questions 1. Describe the two basic strategies for locating production facilities. When is it most appropriate to centralize production? Folie 16