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Managing Global Supply Chains: Focus on China (4 credits)

Syllabus
June 18-June ! "1
Guang#hou! China
Faculty Instructor: Cliff Allen, Ph.D.
Academic Director, Master of International Management
School of Business Administration
Portland State Uniersity
!mail: cliffa"s#a.$d%.edu
&ffice Phone: '()*+,'*'(')
Cell Phone: ,(-*./(*-,.)
&ffice hours: By Arrangement
$e%uired $eadings: Course $ac0s of co$yright $rotected readings aaila#le " 1BC. 2ournal
articles are aaila#le in the 3i#rary or generally on*line.
1BC lin0: http://cb.hbsp.harvard.edu/cb/access/13597867
&ote: First lecture and case study is on A$ril ,4
st
$rior to the tri$.
Course 'escription
Introduction: !conomic glo#ali5ation can $roide enormous strategic #enefits 6ris0s7 #y
coordinating o$erations located in different countries. &$erations in this course include ne8
$roduct introduction, design, logistics, through 8arranty su$$ort, and sustaina#le closed loo$
$ractices. 9oday:s $roducers must coordinate international material flo8, $roduce in multi$le
countries, and delier ne8 $roducts to customers at eer increasing s$eed and on*time. Many
glo#al o$erations seem to fall short of their strategic e%$ectations. 9his course 8ill $roide
students 8ith an o$$ortunity to e%$lore the reasons many managers see enormous $romise in
glo#ali5ed o$erations, $articularly those in China, as 8ell as the o#stacles they face that can
ma0e achieing that strategy so difficult.
&#;ecties: 1el$ing students understand the fundamental conce$ts and techni<ues necessary for
attaining 8orld class $erformance and relationshi$s 8ith Chinese*#ased enter$rises, is the main
learning o#;ectie of this course $ac0age. 9he classes 8ill hae a s$ecial em$hasis on foreign
com$anies $roducing and designing in China in addition to 8orld*class Chinese su$$ort serices
in highly com$etitie industries. A significant $ortion of this course 8ill include consideration to
culture and its im$rint on sourcing strategies and su$$lier #ehaior.
4
Course Content: 9he course 8ill coer si% ma;or to$ics = four tours associated:
4. Sourcing Strategies = Inentory Management > 9yco !lectronics
,. 3ogistics, Closed 3oo$ Su$$ly Chains, ?elationshi$s > Port of @A
). Buality = Metrics > Ci0e
/. Ce8 Product Introduction 6CPI7 and Sourcing Strategies > Conerse
'. &utsourcing and &ff*shoring > Pre*Meeting A$ril ,4
st
= Ci0e
.. @lo#ali5ation = Intellectual Pro$erty > Dra$*u$ day
Methodology: 9hrough a com#ination of readings, case studies, tours, and lectures, the course
8ill introduce analytic a$$roaches, highlight 0ey leadershi$ issues, and reie8 current trends.
9he lectures 8ill introduce conce$ts and techni<ues that can #e used to analy5e and im$roe
glo#al su$$ly chains. 9he e%$ectations $a$er is assigned to hel$ students thin0 a#out
$reconceied thoughts on China and then reflect u$on those 8hen 8riting their research $a$er
after the tri$. 9he cases 8ill focus on the challenges of im$lementation and on the lessons
learned from the e%$erience of industry leaders.
(iographic S)etch
Cli** +llen! +cade,ic 'irector o* Master o* -nternational Manage,ent .rogra,! .S/
S(+0 Dr. Allen holds a Bachelor of Science and Master of Arts degree in !conomics from San
2ose State Uniersity as 8ell as a Ph.D. in 3eadershi$ Studies from @on5aga Uniersity.
Dr. Allen 8as most recently 8ith @eneral Dynamics * Itroni% as Sr. EP of Product 3ine
Management = &$erations. Itroni%, #ased in S$o0ane, Dashington, is a 8orld leader in the
design and manufacture of rugged 8ireless com$uting solutions for mo#ile 8or0ers. At Itroni%,
Dr. Allen 8as res$onsi#le for the Product mar0eting, Design ?=D, Su$$ly Chain and
Manufacturing throughout 9ai8an, China, and the U.S.
Prior to Itroni%, Dr. Allen 8as the Eice President of Manufacturing for )Com Cor$oration
haing res$onsi#ility oer the &$erations of Palm &rgani5er Products and the Mo#ile
Communications Diision.
Course $e%uire,ents
As you 8ill note in the course schedule, certain readings and cases 8ill #e assigned for each
class meeting. It is im$ortant that you carefully read the assignments and analy5e the each caseFs
$rior to coming on the tri$. Gou 8ill #e assigned into grou$s $rior to our first May meetingH I
,
encourage you to actiely discuss all readings and cases in your teams. 9o hel$ you
systematically analy5e the cases, I 8ill $roide a list of <uestions for each case.
?e<uirements: In addition to the daily field tri$s, the course has the follo8ing re<uirements:
.rior to the 1rip: ?ead Dilliamson, P. 2. = Aeng, M. 6,((+7. Dragons at your door: How
Chinese innovation is disrupting global competition. Boston, MA: 1arard Business School
Pu#lishing Cor$oration. ISBC: I+-*4/,,4(*,(-*/
.rior to the +pril 1
st
Meeting: ?ead Scott:s case, !rnst = Jim, Friedman
4.Partici$ation and actie discussion on April 21st regarding your e%$ectations in China = the
Scott:s case and ho8 outsourcing or off*shoring can affect your strategies. Please read the Scotts
case and $roide a ) $age summary of your decision to outsource, offshore, or stay in the US.
?eie8 slides for #ac0*u$ if necessary. Add a short 4 $age a#stract on e%$ectations for the tri$,
include the Dragons reading and culture lecture into the a#stract. Both due $rior to the first day
in @uang5hou, reie8ed $rior to Ci0e tour. 1"2
,. Daily case analysis / presentation of arguments class participation, grading ru#ric 8ill #e
$roided $rior to the tri$ *4"2
). !inal research paper 6not to e%ceed 4, $ages, dou#le s$aced, 4,$t font, APA format or
another a$$roed in adance. All assertions must #e su$$orted #y citations. 9he $a$er is due #y
' PM on 2uly ,,
nd
7H Drite a#out each of the four tours, did the o$erations e%ecute the strategies
8e discussedK ?eflect on 8hether the outcome matched your culture and strategic e%$ectations
discussion at the #eginning of course.
Include readings and lectures to su$$ort your assertions. > 3"2
1ere is a suggested outline for your final research $a$er:
Introduction
Com$any #ac0grounds
o Descri$tion of firm, o8nershi$, structure, history
Descri$tion and analysis of the com$any:s su$$ly chain o$erations in China.
o &$erations strategy and areas of o$erational interest
o Firm:s current challenges from your analysis a#oe
Descri$tion and analysis of the com$any:s mar0eting and For design strategy and tactics
in China. 6SD&97
o Characteristics of the com$etition
o Current situation of firm ersus com$etitors
o Firm:s current challenges from your analysis a#oe
Conclusion including reflections from initial $a$er
?eferences cited
Gour grade 8ill #e determined according to the 8riting ru#ric sent #y mail.
)
Please ma0e sure to address the follo8ing <uestions:
4. Are assum$tions made in the analysis stated e%$licitlyK
,. Do the 0ey e%hi#its su$$ort and add to the te%t on 0ey $ointsK
). Does the $a$er reflect an im$ortant and serious research effortK
/. Does the analysis sho8 a good command of the conce$ts reie8ed in the readings
and class discussionK
'. Does the 8riting flo8 logically consistent and effectiely structuredK
.. Does the content include #oth su$$ly chain methodologies as 8ell as cultural
discoeries regarding China su$$liers and mar0etsK
+. Are data $oints cited for accuracyK
Class .articipation
I encourage you to actiely $artici$ate in the lecture sessions. !ach discussion regarding the
cases 8ill #egin 8ith L8hat do 8e 0no8 a#out the clientKM All case discussions should #uild
u$on each of the student teams offering a uni<ue criti<ue of the case. For e%am$le,
If you are not clear a#out a conce$t #eing discussed in the class, $lease as0 <uestions. I
consider as0ing releant <uestions as a ery im$ortant form of class $artici$ation. Do not
#e shy if sourcing is a ne8 conce$t to you, $lease as0N
If you hae an interesting e%$erience or insight that either su$$orts or contradicts the
conce$t #eing discussed, $lease share it 8ith the class.
If you learned something on the field tri$ that su$$orted or contradicted 8hat 8e learned
in class, either SCM or culturally related.
Do not re$eat the same analysis that another team has already shared, try to #ring a
uni<ue $ers$ectie and consider that no nuance is triial in #usiness.
Course Materials:
2ournal Articles: An im$ortant $art of the course 8ill #e discussion regarding current trends in
glo#al sourcing and o$erations. 9he articles are intended to hel$ you $re$are for each day:s to$ic
and additie to your assertions 8hen 8riting your research $a$er. 9hese 8ill #e aaila#le
through the PSU on*line li#rary, or 1BC 8e#site for $urchase.
Case Studies: Fie cases 8ill #e analy5ed throughout the 8ee0 and on May 4/thH <uestions are
aaila#le at the end of this document for efficiency. 9hese 8ill #e aaila#le through the 1BC
8e#site for $urchase.
Boo0: ?ead the follo8ing #oo0 $rior to su#mitting your e%$ectations $a$er.
Dilliamson, P. 2. = Aeng, M. 6,((+7. Dragons at your door: How Chinese innovation is
disrupting global competition. Boston, MA: 1arard Business School Pu#lishing Cor$oration.
ISBC: I+-*4/,,4(*,(-*/
.lagiaris, o* any )ind > in term $a$ers or e%aminations > or any other iolation of academic
honesty 8ill #e grounds for failure of this course.
9he Student Conduct Code, 8hich a$$lies to all students, $rohi#its all forms of academic
cheating, fraud, and dishonesty. 9hese acts include, #ut are not limited to, $lagiarism, #uying
/
and selling of course assignments and research $a$ers, $erforming academic assignments
6including cases and discussions7 for other $ersons, unauthori5ed disclosure and recei$t of
academic information, and other $ractices commonly understood to academically dishonor. 9he
code of conduct also descri#es standards of #ehaior for all student mem#ers of the cam$us
community. Eiolation of the SCC may lead to disci$linary action. Students may o#tain co$ies
of the Student Conduct Code #y contacting the cam$us ;udicial officer at 6'()7 +,'*//,,, or #y
isiting her office in room /)) Smith Memorial Center
$e%uired Journal +rticles4 Case Studies:
!rnst, D., = Jim, 3. 6,((,7. @lo#al $roduction net8or0s, 0no8ledge diffusion, and local
ca$a#ility formation. "esearch #olicy$ %16-FI7, 4/4+*4/,I.
Friedman, 9. 6,(4,7 &ade in the world. retrieed from
htt$:FF888.nytimes.comF,(4,F(4F,IFo$inionFsundayFfriedman*made*in*the*8orld.htmlK
OrP4=refPthomaslfriedman
@echli0, M.G. 6,((+7. #rotecting intellectual property rights in Chinese courts: An analysis of
recent patent 'udgments. ?etrieed Coem#er 44, ,((- from
htt$:FF888.Carnegie!ndo8ment.orgF$u#s
@enche, S. !. 6,((I7. ?eerse logistics $rogram design: A com$aratie study. (usiness
Hori)ons *26,((I7, 4)I*4/-.
@ray, 2., Jaruna0aran, S., = 3ei#ein, M. 6,((-7. +cotts &iracle ,ro: -he spreader sourcing
decision. ?etrieed March ,., ,((I from:
htt$:FFharard#usinessonline.h#s$.harard.eduF#(,FenFsearchFsearch?esults.;htmlCase
num#er I(-M+-
1ailang, S., = 2ian;un, G. 6,(4(7. Defense of trademar. infringement e/ceptions 0 A study from
the perspective of cases. ?etrieed A$ril ,-, ,(44 from:
htt$:FF888 .Chinai$maga5ine.comFcnF;ournal
1ammer, M. 6,((+7. -he 1 deadly sins of performance measurement and how to avoid them.
MI9 Sloan
1oo, E. 6,(447. %& heath care. ?etrieed A$ril ,, ,(44 from: htt$:FFIeyCase I(/D(-
Jro$f, D. C. = ?ussell, P. 3. 6C.D.7. Hewlett2#ac.ard3s #ac.aging +upplier 4valuation #rocess
and Criteria. ?etrieed May ,/, ,((I from:
htt$:FF888.h$.comF$ac0agingFProcurementF$a$er.doc
Mair, S. 6,(4(7. -echnology transfer to China: ,uide for 45 +&46s. ?etrieed A$ril ,-, ,(44
from: htt$:FF888 .Chinai$maga5ine.comFcnF;ournal
Ma0, E. 6,(()7. &anfield Coatings Co. 7-D.: 8uality &anagement as the 9inning !ormula
1JU)4,
'
Monc50a, ?. M., = 9rent, ?. 2. 6,(()7. Understanding integrated glo#al sourcing. :nternational
;ournal of #hysical Distribution 7ogistics &anagement ))6+7, .(+*.,I.
Carayanan, E. @., = ?aman, A. 6,((/7. Aligning incentives in supply chains.
1B? ?(/44F
Schmidt, D. 6,(4(7. Scientific glass, Inc.: Inentory management. 1BC: /,(-
Shao, M. 6,((I7. Cisco +ystems$ :nc Collaborating on <ew #roduct :ntroduction 1BC @S*..
9each, !. 6Se$tem#er ,((47. -he great inventory correction. CF& Maga5ine
Dilliamson, P. 2. = Aeng, M. 6,((+7. Dragons at your door: How Chinese innovation is
disrupting global competition. Boston, MA: 1arard Business School Pu#lishing
Cor$oration. ISBC: I+-*4/,,4(*,(-*/
F5-: +''-1-6&+7 $8+'-&GS: 1hese are not re%uired9
9he follo8ing readings are intended to gie you some good sam$ling in the 8orld of
glo#ali5ation, <uality, o$erations, and trade that may affect your #usiness. A fe8 are classics and
the rest are recent ie8$oints. Again these are C&9 re<uired.
Auer, P., Besse, @., = Meda D. 6,((.7. =ffshoring and internationali)ation of employment.
@enea, SD: International Institute for 3a#our Studies.ISBCI,*(4/*I+-)*(
Bro8n, D., = Dilson, S. 6,(('7. -he blac. boo. of outsourcing: How to manage the changes$
challenges$ and opportunities. 1o#o0en, Ce8 2ersey: Diley = Sons. ISBC* 4): I+-*(*/+4*
+4--I*'
Bongiorni, S. 6,((+7. A year without made in China: =ne family6s true life adventure in the
global economy. 1o#o0en, C2: Diley and Sons. ISBC I+-*(*/+(*44.4)*'
Deming, D. !. 64I-,7. =ut of the crisis. Cam#ridge, MA: Massachusetts Institute of 9echnology
Center for Adanced !ngineering Study. ISBC: (*I44)+I*(4*(
Friedman, 9. 6,(('7. -he world is flat: A brief history of the twenty2first century. Ce8 Gor0:
Farrar, Straus and @irou%. ISBC: 4)*I+-*(*)+/*,I,+I*I
@ordon, S. ?. 6,((-7. +upplier evaluation and performance e/cellence: A guide to meaningful
metrics and successful results. Fort 3auderdale, F3: 2. ?oss Pu#lishing.
@ranoetter, M. 64I-'7. !conomic action and social structure: 9he $ro#lem of em#eddedness.
-he American ;ournal of +ociology, I46)7, /-4*'4(.
@rossman, !. 6,((+7. High tech trash: Digital devices$ hidden to/ics$ and human
health.Dashington D.C.: Island Press.
.
1in0elman, !. @. 6,((-7. Dictionary of international trade: Handboo. of the global trade
community. Petaluma, CA: Dorld 9rade Press.
?ioli, P. 6,((I7. -he travels of a t2shirt in the global economy 6,
nd
!ds7. 1o#o0en, C2: Diley
and Sons. ISBC I+-*(*/+(*,-+4.*)
Schon#erger, ?. 2. 64II.7. 9orld class manufacturing: -he ne/t decade. Ce8 Gor0: 9he Free
#ress. ISBC:(*.-/*-,)()*(I
Domac0, 2. P., = 2ones, D. 9. 6,(()7. 7ean thin.ing: (anish waste and create wealth in your
corporation. Ce8 Gor0: Free Press. ISBC*(*+/),*/I,+*'
:ebsites *or in*or,ation:
General
MI9:s Profit Pro;ect: 8e#.mit.eduFoutsourcing
ADCet &utsourcing Cases: it$a$ers.5dnet.comFsearch.as$%K=scidPII=dtidP)
InformationDee0: 888.information8ee0.comF
CI& Maga5ine: 888.cio.comFsourcingFoutsourcingF
Com$uterDorld: 888.com$uter8orld.comFmanagementto$icsFoutsourcingF
CeoI9: 888.neoIt.com
@artner: 888.@artner.com
Forrester: 888.forrester.com
A9 Jearney: 888.at0earney.com
McJinsey Buarterly: 888.mc0insey<uarterly.comF
Casscom: 888.nasscom.org > India De#site
?ussoft: 888.russoft.org > ?ussia De#site
9PI: 888.t$i.net
Dorld Inestment ?e$ort, United Cations Conference on 9rade and Deelo$ment, @enea,
,(('. 6htt$:FF888.unctad.org7.
US International 9rade Commission 6htt$:FF888.usitc.go7
CIA Dorld Fact#oo0 6htt$s:FF888.cia.goFli#raryF$u#licationsFthe*8orld*fact#oo07
Car#on foot$rint of different commodities 6htt$:FF888.sourcema$.orgF7
+ssociations
Institute for Su$$ly Management htt$:FF888.ism.8sF
Council of Su$$ly Chain Management Professionals htt$:FFcscm$.orgF
APICS: 9he American Production and Inentory Control Society
htt$:FF888.a$ics.orgFdefault.htm
Chartered Institute of Purchasing = Su$$ly htt$:FF888.ci$s.orgF
Corth8est Procurement Institute htt$:FF888.n$i*training.comF
Su$$ly !%cellence Blog htt$:FF888.su$$lye%cellence.comF#logF
CPP > 6htt$:FF888.american*$urchasing7 > Certification in Purchasing Management
$e*erence
APA 6htt$:FFo8l.english.$urdue.eduFo8lFresourceF'.(F(4F7 > Shortcuts for APA
+
June 18 ; June Course 6utline <<<
Date 9o$ic ?eadFPre$are
/F,4 6utsourcing and Globali#ation o* the Supply
Chain
Case: Scotts Miracle @ro8
Activity: Pre*tri$ meeting, lecture, = case discussion
"ead #rior to -rip: !rnst = Jim, Friedman,
Dilliamson = Aeng
Case, ?eading,
A#stract due
.F4+
.F4- Closed 7oop Supply Chains! -ntro to Sourcing!
$elationships = 7ogistics
Case: )M 1ealth Care
"eading: @enche
Activity: 9our Port of @uang5hou
Case,
?eading, =
9our
.F4I 6utsourcing! >uality = Metrics
Case: Manfield Coatings = Scotts 8ra$*u$
"ead: 1ammer
Activity: 9our Ci0e Shoeto8n
Course $re*
8or0, Case,
?eading, =
9our
.F,( Sourcing Strategies = -n?entory Mg,t
Cases: Scientific @lass
"ead: 9each
Activity: 9our 9yco !lectronics
Case,
?eading, =
9our
.F,4 &e@ .roduct -ntroduction = Sourcing cont0
Case: Cisco Systems
"eading: Jro$f = ?ussell, Monc50a = 9rent
Activity: 9our Conerse
Case,
?eading, =
9our
.F,, Globali#ation = -.
"ead: @echli0, Mair, 1ailong = 2ian;un
Activity: Cegotiation @ame = ?esults,
Dra$*u$, Pa$er reie8, B=A
?eading, 6S0im
@echli07=
Cegotiation
@ame
QQQ 1entati?e Schedule .ending 1i,e and 1ra?el Considerations
-
+SS-G&8' >/8S1-6&S F6$ C+S8 +&+75S-S +&' '-SC/SS-6&
ScottAs Miracle Gro@
Dhat is the $ur$ose of the e%ercise in your o$inion, 8hy 8ould a firm 8ant to outsource F
offshore this ty$e of $roduct in its $ortfolioK
Dhat are the internal F e%ternal $olitical and ethical issues associated 8ith this decisionK
Are they releant to the com$any, $roduct, and glo#al sourcingK
Dhat are the strategic ris0s and #enefits of outsourcing F offshoring $roduction of the
9emecula $lant to a location in Mainland ChinaK Include all Lhard and softM items in a
ris0 = #enefit format.
Financially com$are the o$tions of staying in 9emecula and moing to China. Proide
the Lsoft aria#lesM 8hen arguing against the <uantifia#le num#ers in the analysis.
Consider the follo8ing in your financial analysis:
o ' year hori5on, olumes = material costs are stagnant in 9emecula
o 9a%es e%cluded, lease in 9emecula could #e cancelled
o Ce8 molds in China are estimates only #y students
o Shi$$ing rates
o !%change rates
o Production Costs 63a#or, oerhead, $lant F e<ui$7
o @oernance Costs 6Management &erhead = Start*u$ costs7
BM Ceath Care
Dhat alue do EA?s $roide in healthcare su$$ly chainsK 1o8 much money can #e
saed #y ado$ting a direct #usiness modelK 1o8 8ould the translate internationallyK
Does it ma0e sense for )M to eliminate EA?s and increase its logistics organi5ationK
Dhy are hos$itals $ressuring )M to ado$t a direct #usiness modelK
Dhat are the long term trends in healthcare and ho8 8ill EA?s #e affectedK
Should )M hire a )P3 to handle distri#utionK
1o8 does )M:s distri#ution net8or0 hel$ $osition the com$any against the com$etitionK
Scienti*ic Glass
Dhat are the $ro#lems facing S@ in 2anuary ,(4(K
1o8 much e%ternal funding 8ill hae to #e raised in ,(4( to finance o$sK
I
1o8 so S@:s $ro#lems illustrate the relationshi$ #et8een the num#er of 8arehouses and
inentory leelsK
Dhat are the alternaties = ho8 do you ealuate thoseK
Dhat actions should S@ $ro$oseK
o Assessment alternaties: ' <uestions
o Im$lement $ro$osed $olicy changesK
o Consolidate 8arehousesK
o &utsource 8arehousingK
o ?educe the target total order fill*rateK
o &ther considerationsK
Manfield Coatings
1o8 does <uality hel$ ManfieldK
Dhat made the B*S successfulK
Dhat metrics 8ould hae made Manfield more successfulK
Are they moing in the right directionK
Seen deadly sins = aligning incentiesH ho8 does this relateK
Cisco Systems
Dhat are the ris0s in CPI oerallK
Dhy Fo%conn or any ne8 su$$lierK
Dhat are the challenges and ris0s 8ith China directly.
Dhat are the #enefits of going to China directly.
Is Fo%conn a ris0K
1o8 do you mitigate the ris0s of going direct to ChinaK
Intellectual Pro$erty
Is the $rocess of $atent enforcement in China sufficientK
Does the e%istence of the P?B hel$ of hinder IP $rotection in your o$inionK
1o8 does Chinese culture affect rulings #y the P?BK
Dhat is the losing rate and is it a good metric for IP $rotection or reie8 in ChinaK
4(

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