Global Busines Today

6443 Words Nov 12th, 2012 26 Pages
Global Production, Outsourcing, and Logistics

Chapter Outline

OPENING CASE: Building the Boeing 787

INTRODUCTION

STRATEGY, PRODUCTION AND LOGISTICS

WHERE TO PRODUCE

Country Factors Management Focus: Philips in China Technological Factors Product Factors Locating Production Facilities

THE STRATEGIC ROLE OF FOREIGN FACTORIES

Management Focus: Hewlett Packard in Singapore

OUTSOURCING PRODUCTION: MAKE-OR-BUY DECISIONS

The Advantages of Make The Advantages of Buy Trade-offs Strategic Alliances with Suppliers

MANAGING A GLOBAL SUPPLY CHAIN

The Role of Just-in-Time Inventory The Role of Information Technology and the Internet
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In regard to make-or-decisions, the author provides a balanced discussion of the advantages and disadvantages of buying components parts (in the world marketplace) opposed to making them in-house. The chapter concludes with separate discussion of the importance of strategic alliances, just-in-time manufacturing, and information technology to international firms.

Opening Case: Building the Boeing 787

Summary

The opening case explores Boeing’s production strategy for its new high-tech 787 aircraft. Boeing is outsourcing some 70 percent of the content of the aircraft to other companies, many of which are located outside the United States. Boeing hopes that its outsourcing strategy will mean that partners will contribute towards the development costs of the aircraft, that sales in partner countries will be easier, and that it will gain knowledge and expertise. Discussion of the case can revolve around the following questions:

QUESTION 1: Boeing is outsourcing an unprecedented 70 percent of its new 787 aircraft. Discuss Boeing’s strategy for the production of this aircraft. What does the company hope to gain by following an outsourcing strategy? What are the risks of the type of strategy?

ANSWER 1: When Boeing made the decision to outsource 70 percent of the production of its 787 aircraft to companies located around the world, the company
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