CF-E7

Supply Chain Management

Select a company of your choice, and calculate the most current days of working capital (DWC) that are available. Review page 656 in the textbook, and watch the short video segment “Working Capital,” which is one of the required unit resources in this unit. In addition to your calculations, include the information below in your essay.
· How does this company’s ratio compare to those of its competitors?
· Why is comparing this ratio to the industry average important?
· Explain how a well-managed supply chain can come into play here.
You may use the company’s webpage, or keep in mind that the CSU Online Library has several databases to choose from that are good starting points for your research:
· Mergent Online,
· Business Insights: Global,
· Business Source Ultimate, and
· ABI/INFORM Collection.
Your essay should be at least two pages in length. Use APA format to cite and reference all quoted and paraphrased material, including your textbook. Use a minimum of two sources, one of which may be the textbook. Include a title page, introduction, body, conclusion, and references page. An abstract is not required.

FIN 6301, Corporate Finance 1

Course Learning Outcomes for Unit VII

Upon completion of this unit, students should be able to:

4. Compare short- and long-term financing.
4.1 Calculate days of working capital.
4.2 Analyze how supply chain management plays a role in working capital management.

Course/Unit
Learning Outcomes

Learning Activity

4.1

Unit Lesson
Chapter 16, pp. 656-682
Chapter 17, pp. 707-713
Video Segment: “Working Capital”
Unit VII Essay

4.2

Unit Lesson
Chapter 16, pp. 656-682
Chapter 17, pp. 707-713
Video Segment: “Working Capital”
Unit VII Essay

Required Unit Resources

Chapter 16: Supply Chains and Working Capital Management, pp. 656–682

Chapter 17: Multinational Financial Management, pp. 707–713

In order to access the following resource, click the link below

TV Choice Ltd. (Producer). (2011). Working capital (Segment 3 of 6) [Video]. In Accounting & finance clips 4:

Cash flow and working capital.
https://libraryresources.columbiasouthern.edu/login?auth=CAS&url=http://fod.infobase.com/PortalPla
ylists.aspx?wID=273866&xtid=128756&loid=450728

The transcript for this video can be found by clicking the “Transcript” tab to the right of the video in the Films
on Demand database.

UNIT VII STUDY GUIDE

Managing Global Operations

https://libraryresources.columbiasouthern.edu/login?auth=CAS&url=http://fod.infobase.com/PortalPlaylists.aspx?wID=273866&xtid=128756&loid=450728

FIN 6301, Corporate Finance 2

UNIT x STUDY GUIDE

Title

Unit Lesson

Operations Management

Operations management
pertains to the administration
of business practices in
order to achieve the highest
level of organizational
efficiency. The concern of
operations management is to
convert materials and labor
into services and goods
using the most efficient
method in order to maximize
profits. Teams who are
responsible for operations
management make an effort
to balance the costs and
revenue in order to generate
the most net profit.
Operations management
includes the utilization of
various organizational
resources such as the staff,
materials, equipment, and
technology. Operations managers deliver what the client wants based on the ability of the company.

The specific responsibilities involved in operations management include handling various strategic issues
such as determining the size of the manufacturing capacity, the methods for project management, and the
implementation of information technology. Other important tasks assigned to operations management include
the handling of the inventory (including work-in-process and the acquisition of new materials), quality control,
materials, and policies for maintenance. Operations management also includes the strategic determination of
how raw materials can be used with only minimal waste. Utilizing numerous formulas, such as the economic
order quantity formula, operations managers can determine the time and quantity for the processing of a large
inventory, including how much inventory is needed to hold on-hand.

To further demonstrate the nature of the job of an operations manager, consider the following example. Henry
has been an operations manager for the company NitroTech for more than 5 years. One of his jobs is to
ensure that the system of production is efficient and productive. He ensures this system is efficient by reading
daily reports and statistics in order to spot irregularities or any possible problems. Henry also coordinates with
different managers in order to understand current issues and problems within the company. If he spots a
problem, he will make the necessary strategic decisions to make the changes to correct the issue.

Global Operations Management

Global operations management involves the management of operations in a global context, focusing on
contemporary issues such as effective collaboration with supply chain partners in order to remain globally
competitive. This global competitive advantage is based on the strategic ability of a company, particularly the
global operations manager, to compete based on differentiation, cost, and timely response based on
flexibility, reliability, and quickness. Management of global operations is important in order to reduce cost,
reduce risk, secure supply sources, attract new markets (i.e., expansion through new customers in other
countries), learn improvements in the operations and customer services, and attract talent globally—
particularly those who are not available locally.

(Ivanov, n.d.)

FIN 6301, Corporate Finance 3

UNIT x STUDY GUIDE

Title

Manufacturing in the Global Market

Manufacturing is the transformation of new material/inputs into goods/services. When an internationally based
company has the technological ability to manufacture goods and services, a sound operation strategy is
important in order to be competitive in the global market. Globalization has led to improvements in
infrastructure due to the presence of international treaties and regulations that support globally sustainable
manufacturing operations (Bhattacharya, Cheffi, & Dey, 2016). Management, procurement, logistics,
technology transfer, and marketing are some of the most important operations management issues facing a
global manufacturing company.

Management: International manufacturing gives companies the opportunity to grow and boost
competitiveness. Huge potentials can be gained by strategically restructuring—or rethinking—traditional
structures of manufacturing. Global manufacturing is accelerated when there is a large difference in factor
costs, high potential growth in emerging markets, and lower transaction costs. Some of the main issues in the
global management of a manufacturing company include geographic dimensions, regulatory factors, working
conditions and processes, location, and cost of production.

Procurement: Global procurement or source pertains to activities wherein buyers acquire goods or services
from other companies globally. The global procurement of commodities is a common practice for many
industries, particularly in the manufacturing and agriculture sectors because of the economic benefits (i.e.,
lower cost, higher profits) that can be gained from this strategy. Global procurement will be enabled when the
following factors are present:

• an expanding availability of very skilled resources,

• facilities that are technologically advanced,

• highly advanced telecommunications,

• highly improved tools and platforms for collaboration, and

• mature models for delivery.

Operations managers should have a strong understanding of global trends when making strategic decisions
about the procurement of materials that are both cost-effective and time efficient. They are responsible for
finding suppliers that can provide reasonable prices for goods and are able to deliver these products when
needed.

Consider the following example of a global procurement. Jodie is the operations manager of an international
company focusing on consulting services. In order to cut costs, Jodie decided to outsource the call center
agents who are responsible for helping clients address basic questions and needs regarding their services. In
addition to the benefit of lower costs because of lower currency value, Jodie also recognized the 12-hour
difference in the time zone of her target country of procurement, which meant that she could have a 24-hour
call center service available to her clients at a lower cost. Because the global procurement of services is
100% through online means, she would be able to save a considerable amount of the operating costs. Given
these benefits, Jodie decided to procure a significant number of call center positions in the other country.

Logistics: The management of logistics involves the planning, implementation, and controlling of the flow and
storage of goods and services starting from the origin to the consumption of these goods and services in
another country. The management of logistics globally is more complex compared to operations logistics in a
single country. This is because of the higher level of collaboration and involvement needed when multiple
countries are involved. Some of the components of global logistics are international transportation and
insurance, packaging, means of payment between countries, teams needed for the trade, border crossing,
and inventory. Some of the decisions that an operations manager may encounter include the management of
warehouses, packaging and inventory management, handling of materials, information systems, and
transportation.

In the apparel industry, lower costs are the main motivation for global outsourcing (Aksoy & Öztürk, 2016). To
illustrate how global logistics work within the context of a global operations manager, consider the following
example. Barbara is the operations manager for an international manufacturing company of printed shirts. Her
source of materials (i.e., the plain shirts) is China. She handles all of the transportation arrangements so the
shirts will reach the United States from China (including the tax, fees, method of transfer, border permits, and
other regulatory documents). Barbara is responsible for hiring all of the teams and individuals needed for this

FIN 6301, Corporate Finance 4

UNIT x STUDY GUIDE

Title

transaction to work efficiently. She is also responsible for ensuring that payments are made to the suppliers
involved in the process. Once the shirts arrive in the United States, Barbara’s team is responsible for bringing
the shirts to the local artists who provide the designs for the plain shirts. Once the shirts have been designed,
she ensures that the products are packaged properly and stored in a warehouse.

Technology transfer: Technology transfer is the sharing of skills, knowledge, technology, and manufacturing
methods that allow multiple institutions to facilitate scientific and technological developments in order to make
the development of new products, services, or materials possible. Companies engage in technology transfer
in order to profit from technology, gain advantage in terms of location and logistics, gain competitive edge,
acquire grants, address limitation of the home country, and enhance competence. Some of the methods used
in the transfer of technology include foreign direct investment, licensing and franchising, contracts, joint
ventures, and joint research and development projects. Engaging in technology transfer is important in order
to encourage technology use, acquire competitive advantage, support research and development, facilitate
innovative ideas and services, and leverage the business environment.

Marketing: The management of marketing involves conducting analysis, setting goals, predicting sales and
profits, developing strategies and procedures, evolving appropriate mixes of marketing strategies, organizing
activities and resources, participating in the planning of products, managing supply chains, and engaging in
after-sales activities. Marketing internationally is beneficial because of the optimal use of resources and
surplus production, fast industrial growth, ability to conduct comparative cost, international cooperation,
cultural exchange, and expansion of tertiary sectors. Some of the major activities in global marketing are
market assessment, product decisions, promotions, pricing, and distribution strategies (Douglas & Craig,
2010).

Conclusion

Even though global operations are primarily used for various beneficial reasons (e.g., save costs, market
expansion, technology improvements), they are not without their problems and complications. These issues
include geopolitical and logistical barriers such as unpredictable weather, quality of infrastructure, and
government stability. Some of the risks involved in managing a global operation are the delay in the delivery
of products due to problems in border crossing, damaged products because of the longer route in the process
of delivery, and the volatility of international currency. A global operations manager usually analyzes these
problems and issues an order to maintain smooth transactions in various aspects of the company’s
operations.

References

Aksoy, A., & Öztürk, N. (2016). Design of an intelligent decision support system for global outsourcing

decisions in the apparel industry. The Journal of the Textile Institute, 107(10), 1322–1335.

Bhattacharya, A., Cheffi, W., & Dey, P. K. (2016, February 1). Recent advances in manufacturing operations

management. Journal of Manufacturing Technology Management, 27(1).
https://www.emeraldinsight.com/doi/full/10.1108/JMTM-12-2015-0109

Douglas, S. P., & Craig, C. S. (2010, December 15). Global marketing strategy: Perspectives and

approaches. https://onlinelibrary.wiley.com/doi/full/10.1002/9781444316568.wiem06013

Ivanov, K. (n.d.). Operations management business and technology concept on virtual screen (ID 113918450)

[Graphic]. Dreamstime. https://www.dreamstime.com

Course Learning Outcomes for Unit VII
Required Unit Resources
Unit Lesson
Operations Management
Global Operations Management
Manufacturing in the Global Market
Conclusion
References