Optimization Strategies in Business Management

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Questions and Answers

What percentage increase in profit is targeted in the given optimization scenario?

140%

What is the initial revenue amount before optimization measures?

350 million euros

What is one procurement cost reduction strategy mentioned in the optimization objectives?

Supply chain optimization

What is the profit margin stated in the initial situation?

2% Signup and view all the answers

Which commercial approach can be employed to achieve cost reductions according to the optimization goals?

Price reduction Signup and view all the answers

What is the primary distinction between outsourcing and outtasking?

Outsourcing involves transferring a complete process to an external company, while outtasking refers to delegating single tasks. Signup and view all the answers

How does break-even analysis aid in make-or-buy decisions?

Break-even analysis helps determine the volume of units at which the total costs of making and buying are equal, assisting in cost-effective sourcing decisions. Signup and view all the answers

List two arguments for choosing to 'make' rather than 'buy' in a sourcing decision.

Two arguments for 'make' include protection of know-how and cost savings from specialized technology. Signup and view all the answers

What are the two different types of outsourcing based on geographical location?

The two types are offshore outsourcing, which involves distant countries, and nearshore outsourcing, which involves nearby countries. Signup and view all the answers

What benefit does direct managerial authority provide in a 'make' decision?

Direct managerial authority enables faster improvement cycles and a stronger focus on quality management. Signup and view all the answers

What role does Corporate Social Responsibility play in global sourcing according to globalization trends?

Corporate Social Responsibility is becoming increasingly important as organizations adapt to changes in consumption patterns, particularly regarding environmental and social accountability. Signup and view all the answers

How does demographic change impact the labor market in the context of global sourcing?

Demographic change affects the availability of both skilled and low-cost labor, influencing companies' sourcing strategies. Signup and view all the answers

What impact have falling trade barriers had on global sourcing opportunities?

Falling trade barriers, such as decreasing tariffs and increasing WTO memberships, have expanded global sourcing opportunities for firms. Signup and view all the answers

What is the projected growth trend of developing markets compared to traditional industries?

Developing markets are expected to experience strong growth, while demand in traditional industries and mature markets is slowing down. Signup and view all the answers

Why is IT and innovations considered a key success factor in global sourcing?

IT and innovations enable companies to optimize their global sourcing operations, increasing efficiency and responsiveness. Signup and view all the answers

What trend in globalization has been observed since 2007?

Globalization has been declining slightly since 2007. Signup and view all the answers

How do companies like Nike and Apple approach global sourcing?

They contract out most of their production to foreign suppliers and focus on branding and core competences. Signup and view all the answers

What role do companies like Dell play in the global manufacturing network?

Dell relies extensively on independent suppliers for its manufacturing. Signup and view all the answers

What are the two key focuses for companies engaging in global sourcing?

Maximizing operational efficiency and concentrating on their core competencies. Signup and view all the answers

What is the implication of being described as brand owners and marketers in the context of companies like Nike?

It implies that these companies prioritize branding and marketing over direct manufacturing. Signup and view all the answers

Study Notes

BA International Management - Global Sourcing

Course title: B.A. Business Administration International Management, Global Sourcing (BA/BAET 2/3)
Version: Student's Version – Edition Winter 2024
Module Code: IMET4
Credits: 5
Teaching Language: English
Intake: Winter semester
Hours per week (SWS): 4
Duration: 1 semester

Module Overview

Global Value Creation
Lectures of the module:
- Global Sourcing (18 hours presence, 57 self-study hours, 75 total workload, 2 SWS)
- Global Value Chain Management (18 hours presence, 57 self-study hours, 75 total workload, 2 SWS)
Teaching and learning methods:
- Lectures: 50%
- Free class discussion: 15%
- Small group work: 15%
- Case studies: 20%
Type and duration of exam: Written exam (120 minutes)

Course Description

The course focuses on optimizing value creation through supplier selection and cooperation.
Essential terms, procurement management objectives, and increasing importance for international competitiveness are presented.
Global procurement management opportunities and risks are explained with case studies from globally active companies.
The course covers awarding processes, from specifications and market analysis to supplier decision and contract conclusion, including classic tenders and innovative approaches (e.g., concept competitions, online auctions).
Negotiation tactics and strategies are emphasized to obtain suitable suppliers and secure long-term cooperation.
Case studies and management approaches are used to practice global procurement management tasks and decisions.

Learning Methods

Lecture presentations
Videos
Case studies
Online Survey (optional)
Live Demo (optional)
Kahoot (optional)
Group exercises

Literature

Van Weele, A.J. (2018), Purchasing and Supply Chain Management, Cengage Learning
Weigel, U.; Rücker, M. (2017), The Strategic Procurement Practice Guide, Springer International Publishing
Schupp, F.; Wöhner, H. (2020), The Nature of Purchasing, Springer International Purchasing
Zsidisin, G,; Gaudenzi, B.; Pellegrino R. (2024), Strategic Sourcing, Springer Nature Switzerland
Oshri, I.; Kotlarsky, J.; Willcocks, L. (2024) Global Outsourcing and Offshoring, Springer Internatioinal Purchasing

Work Load and Exam

Punctuality and presence until end of lecture, mobile phones, smart-phones, and PDAs must be switched off.
Class attendance accounts for a small portion of the overall workload.
Additional preparation, wrap-up, and exam preparation time is included (2.5-3 hours per hour of class)
Written module exam, calculators permitted.
Active participation in class and exercise preparation are vital to exam success.

Principles of Sourcing - Agenda

Terms and Meanings
Objectives
Outsourcing (topics include increasing importance of purchasing and supply in the manufacturing sector from 1940-present, vertical manufacturing, and examples with the automotive industry: SMART in Hambach)
Make-or-Buy

Additional Notes

The course contains exercises and case studies, emphasizing practical application of concepts learned.
The documents cover various aspects of global sourcing, from initial principles to operational aspects like contracts, costs, and selection processes.
Detailed information regarding ethical considerations, global sourcing trends, company approaches, and global issues.

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Description

This quiz explores important concepts in business optimization, including profit margins, procurement strategies, and sourcing decisions. It also delves into the distinctions between outsourcing and outtasking, and examines the benefits of direct managerial authority in production decisions. Test your knowledge on these crucial elements of effective business management.