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 …show more content…

In addition, Boeing hoped to gain access to sales in partner countries. Unfortunately for Boeing, the strategy proved to be more daunting than expected. Several suppliers were late with their contributions slowing the production process and prompting Boeing to eventually announce a delay in its production. Boeing was then faced with the possibility of paying penalties for late delivery to its customers.

QUESTION 2: How could Boeing improve the performance of its global supply chain?

ANSWER 2: Boeing ran into problems with its global supply chain when suppliers failed to deliver parts on schedule. Many students will probably suggest that if Boeing wants to string together a supply chain consisting of unrelated companies located in various parts of the world, it need to make management of that supply chain a top priority. Boeing was contending with various types of problems including poor quality components, incorrect installation of parts, secondary outsourcing, and so on. Students will probably suggest that if Boeing had been on top of these types of issues earlier in the process, it might have been in a better position to take steps to mitigate their effect on the entire supply chain.

Teaching Tip: To learn more about Boeing go to {http://www.boeing.com/}.

Lecture Note: To extend this discussion, consider