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John Tompkins

· DQ #1:  What is offshoring? How does it affect manufacturing and logistics?

Offshoring is the practice of outsourcing production processes to third party firms located outside of the United States (Coyle, 2017). Outsourcing the manufacturing function can be an attractive option because it provides the customer firm access to a flexible production capacity without the investment required to establish the required facilities in-house (Coyle, 2017). Outsourcing also allows the customer firm to concentrate internal resources on their core business while benefiting from the expertise of a specialized firm in the outsourced function (Coyle, 2017). Selecting a manufacturer that is located overseas in the case of offshoring provides these benefits as well as saving cost due to lower wages, less stringent building codes, and favorable exchange rates that are encountered overseas. There are some disadvantages to offshoring as well that can significantly affect operations and logistics. Increasing the length of the supply chain inherently increases the transportation cost associated shipment of finished goods (Coyle, 2017) and increases transportation time which both increases time it takes to fulfill a customer’s order and somewhat reduces the supply chain’s flexibility to adjust to changing demand as shipments become larger and less frequent to remain cost effective. Moving all goods through customs presents challenges as well because it slows down shipments and can frustrate cargo so that it stops moving for potentially weeks at a time which along with the inherently increased transportation time increases carrying cost for that inventory (Coyle, 2017). Offshoring also makes it more difficult to coordinate and synchronize efforts between firms as time zone differences, language, and cultural differences create barriers to effective communication.

DQ# 2:  There are four assembly processes. Name all four, and pick two to discuss in detail.

According to Coyle (2017) there are four assembly processes: Make-to-stock (MTS), assemble-to-order (ATO), build-to-order (BTO), and engineer-to-order (ETO). In a general sense ATO, BTO, and ETO are all types of make-to-order (MTO) processes. MTS is a traditional mass production process in which established assembly lines execute production runs on a defined schedule which may be continuous (Coyle, 2017). These schedules makes production planning easier, drives the cost of goods down by taking advantage of economies of scale in large volume runs, and allows enables customer orders to be fulfilled quickly from a stock of finished goods (Coyle, 2017). However, MTS processes are reliant on accurate forecasts driven by sales information and require an extensive inventory control process to hold finished goods. According to Coyle (2017), this makes MTS ideal for producing commodities and seasonal items because they have stable and predictable demand patterns. In contrast, MTO processes are designed to minimize finished goods inventories to save cost and to provide varying degrees of customizability to customers which also helps products produced by these processes to avoid obsolescence (Coyle, 2017). ATO differentiates itself from BTO and ETO by holding an inventory of finished components that are used to rapidly assemble finished goods with the capability to provide a limited number of predetermined configurations (Coyle, 2017). This allows ATO processes to fulfill orders quickly while also responding to changing customer requirements. A great example of this is the Dell’s Dell Direct service which guides customers through a selection of housings and hardware to create a custom product from available components with a build time of a few days that generally supports delivery to the customer within approximately 10 days.

Reference:

Coyle, John J.; Langley, John C.; Novack, Robert A.; Gibson, Brian J. (2017) Supply chain management a logistics perspective 10e. Boston, Massachusetts: Cengage Learning

Edited by John Tompkins on Sep 20 at 12:48am

· Jesse Shook

· DQ#1: What is offshoring? How does it affect manufacturing and logistics?

Offshoring is when an activity within a supply chain is relocated to contract manufacturer in another country (Coyle, 2017). Offshoring can bring down total cost to the consumer but it can present logistics challenges when discussing distribution across borders. The reason why a firm may want to outsource deferes from business to business, but the reason may be capacity related (lack of in-house resouces, increase flexibility or the ability to get rid of peripheral competencies through offshoring) or cost related (lower labor costs, lowering investments in infrastruvture, access to cheapr raw materials, etc).

Regardless of why a firm may want to offshore, there are logistical costs associated with it that may be overlooked. There is the obvious transportation costs of moving materials across borders, which can now also include tarrifs and other expenses levied by the government. Supply chain managers will also have to look at the network as a whole and make decision on inventory placement optimization, or where best to place their warehouses and other distribution nodes. Coyer mentions that "as production spreads out among multiple facilities in different countries, it becomes more difficult to maintain visibility and synchronize activities". This makes tools like logistics IT ever more important to track the location and quantity of products as it moves across the supply chain.

DQ#2: There are four assembly processes. Name all four, and pick two to discuss in detail.

The four manufacturing methods are make-to-stock (MTS), assemble-to-order (ATO), build-to-order (BTO), and engineer-to-order (ETO).

ATO is when a firm receives a customer's order and then commences production based on that customer's specifications. The final ATO product is usually a standard product with some options and accessories specified by the customer. Many cars with options can be build via the ATO process. ATO usually means that there is a standard assembly process, but the manufacturer is able to custom a few features to meet the demands of the customer.

The BTO is similar to the ATO where the manufacturer can customize a standard product to the specifications of the customer. Both the BTO and ATO also would not start production until a customer's order is received. However, The BTO requires a higher level of customization and, therefore, a lower volume of production. A BTO is very flexible and can handle variety and meet very specific production specifications. However, it cost more than the ATO.

References:

Coyle, J.J., Langley, C.J., Novack, R.A., & Gibson, B.J. (2017). Supply Chain Management: A Logistics Perspective. (10th ed.). Boston, MA: Cengage Learning.

· Paul McGann

· DQ #1:  What is offshoring? How does it affect manufacturing and logistics?

Offshoring is hiring a third-party provider by contract to handle production operations, and internal business processes such as transportation, and payroll functions. Companies outsource since it affects cost and not adequate storage capabilities. “The outsourcing strategy commonly provides lower cost access to variable capability versus other manufacturing strategies” (Coyle, 2017, p.181).

Companies look at many factors before implementing outsourcing strategies. Firstly, the factors that influence strategies decision are deal with concentrating corporations important and crucial core competencies. Secondly, lack of knowledge, skill, and abilities of personnel and resources to handle business processes. Thirdly, the ability for the company to turn out to be more efficient and effectively attainment of work complete and gaining a competitive advantage over its competition. Fourthly, Companies adopting a philosophy in competing in business of 21st century by implementing processes that make them more flexible and adaptable in business operations. Fifthly, operations managers focus on control costs and budgetary issues by implementing metrics that monitor and predict expected cost. Sixthly, this affect organization due to fact it drops investment in internal processes in corporations. Lastly, the common practice in business today is developing and implementing innovation strategies through leadership.

Offshoring strategies affect companies concerning logistics and manufacturing. Firstly, company’s requirements are to perform a cost benefit analysis to determine the benefits and drawbacks of offshoring. Secondly, companies are affected by logistics when the organizations move production operations it increase transportation cost, inventory costs increase due to fact cost of goods on transit, also custom cost when moving to foreign country, and other cost associated to run a company which is a hidden expense. Thirdly, offshoring in operating production facilities in multiple countries the ability to track and maintain visibility affect synchronizing operations for an organization. Lastly, this affects logistics activity due to fact of losing control of operations concerning quality, intellectual property constitutional rights, customer service relationships because of tracking issues of products.

Manufacturing issues affect companies are implementing strategies of on-shoring and nearshoring. Basically on-shoring is bringing back operations to host nation and organizations outsource using nearshoring by means of manufacturing in nearby or neighboring countries. The United States Companies use a business practices a strategy calls On the Line which brings back production to the United States. The advantages of using this strategy takes away dependence on suppliers located in Asian countries in the Far East. Finally, the major countries or regions using home production strategies are North America and Latin America countries.

 

References:

Coyle, J.J., Langley, J., Novack, R. A., & Gibson, B. J. (2017). Supply Chain Management: A Logistics Perspective (10th ed.). Mason, Ohio: Cengage Learning. ISBN: 978-1-305-85997-5

 

 

DQ# 2:  There are four assembly processes. Name all four, and pick two to discuss in detail.

The four main methods used by companies in manufacturing assembly processes method are make-to-stock (MTS), assemble-to-order (ATO), build-to-order (BTO), engineering-to-order (ETO). The last three assembly processes ATO, BTO, ETO are different variants of made-to-order (MTO) process.  The two manufacturing assembly processes that will be discuss are make-to-stock (MTO), and assemble-to-order (ATO).

 

1. Made-to-stock (MTS): is a production method that is normally use for high volume products with high demand based on historical data. MTS is established production process where products are made and complete in advance of receipt of customer order. This process is done by mass production based processes where customer orders are supplied from finished goods inventories, and production orders are expended to restock finish goods inventories. Companies in implementing this process normally makes production scheduling simpler, sustain cost effective manufacturing and allows the manufacturer to rapidly supply customers’ orders from finished good inventory. This process has problems with accurate forecasting and inventory control in MTS. “In this build-ahead production approach, production plans are driven by historical demand information in combination with sales forecast information” (Coyle, 2017, p. 187). MTS is also standard system in continuous process manufacturing and functions properly well with commodity end item products and example of such are chemicals, paper products, and pharmaceuticals.

2. Assemble-to order (ATO): this assembly process the product production begins after acceptance of customer’s order. The ATO product is a combination of comparable components with a partial number of options or accessories built and presented for the customer. The ATO process storage of separate items are often kept in expectation of demand, but finished goods are not accumulated while waiting for customer to place demand for their   “the purpose of this combination, is to offer variety to the customer, while reducing customer lead time and gaining some of the efficiencies of make-to-stock production” (Hancock, Simpson, 2013, p. 157). ATO is common in automobile and computers manufacturing that have recurring manufacturing processes where products are assemble of standardize or customary components. The key benefits of ATO assembly process is lower overall finished goods inventory, and makes organization better capability to become accustomed to changing demand, make more efficient in projecting for components rather than finished goods, and greater levels of customer engagement.

 

References:

 

Coyle, J.J., Langley, J., Novack, R. A., & Gibson, B. J. (2017). Supply Chain Management: A Logistics Perspective (10th ed.). Mason, Ohio: Cengage Learning. ISBN: 978-1-305-85997-5

Hancock, P.G., Simpson, N.C., (2013). Practical Operations Management (1st ed.). Naperville, Illinois: ISBN: 978-1-939297-00-6