the degree of centralization, policies, incentives, measures and controls, etc.
Ownership and governance
who owns which facilities/units.
Structure
the number, location, scope and specialization of the units belonging to the network.
Networks that are roughly equal in power and
influence appear to be more stable than those that have multiple “hubs”
(components that have unusually numerous and rich connections to other
components).
False
One of the most compelling reasons for
companies to expand their network is that there are limits to how far a
customer will travel to a retail outlet, so total revenue growth beyond a
certain limit requires expanding the number of branches.
True
Select whether or not each
advantage/disadvantage pertains to centralization or outsourcing.
Companies are able to “spread the overhead” (take advantage of the
underutilized fixed costs already in place) and exploit economies of
scale.
Advantage of centralization
Disadvantage of centralization
Advantage of outsourcing
Disadvantage of outsourcing
Advantage of centralization
Select whether or not each
advantage/disadvantage pertains to centralization or outsourcing.
Enables a company to make use of the unique capabilities and skills
developed within the company.
Choose one
Advantage of centralization
Disadvantage of centralization
Advantage of outsourcing
Disadvantage of outsourcing
Advantage of centralization
Select whether or not each
advantage/disadvantage pertains to centralization or outsourcing. Avoids
the logistical complexity associated with coordinating production and
information flows across sites.
Advantage of centralization
As a given facility is assigned
responsibility for more and more activities and as it expands its
geographic coverage, however, its management becomes more and more
difficult.
True or False
True
Select the definition of scale is:
Involves the face that repetitive performance of similar activities, tends to decrease as the number of products and processes assigned to a facility.
Total capacity or output.
Involves the face that repetitive performance of similar activities,
tends to decrease as the number of products and processes assigned to a
facility
Select the definition of size is:
Involves the face that repetitive performance of similar activities, tends to decrease as the number of products and processes assigned to a facility.
Total capacity or output.
Total capacity or output.
The “network effect” states that the value
of an information-based network decreases roughly with the square of the
number of participating units, operating networks.
True or False
True
As a network expands not only do the units
composing it lose some of their sense of community and commitment, but also it becomes increasingly difficult for central group to monitor and control their activities.
True or False
True
Specialization
focus involves the ability to simplifying the management and increasing the effectiveness of a large, complex operation by breaking it up into subsets, each comprising a relatively narrow range of activities, and dedicating a separate facility to each subset.
Horizontal network
a product-focused network, sister facilities are relatively independent on one another.
Number and size
Small, focused facilities have important advantages to having multiple production locations.
Mixed networks
most operations organizations do not adopt a single approach to facilities specialization.
“Orchestrated” Networks
Wal-Mart was very successful and beat out its competitors using this type of network.
Vertical network
a process-focused network, sister facilities are relatively dependent on one another
Location
Questions such as whether or not to locate near major markets or customers, near sources of raw materials, close to low cost labor or to pools of special skills should
be considered here
A networks infrastructure involves the network’s policies, procedures and internal systems.
True or False
True
Which of these are aspects of horizontal networks:
-No control over the prices at which its outputs are tranfered to other facilities
- products that do not require large facilities
- appropriate for complex, divisible, and capital-intensive processes
-customers are often sister facilities
- Flexibility and innovation are more important than careful planning and tight control.
-Facilitates low-cost production if there are substantial economies of scale and/or advantages stemming from the use a superior process technology.
- Better suited for less complex and less capital intensive technologies
- Decentralized organization
- Broadly skilled managers
- Promotes flexibility and responsiveness.
Answers are
Promotes flexibility and responsiveness.
Broadly skilled managers
Decentralized organization
Better suited for less complex and less capital intensive technologies
Flexibility and innovation are more important than careful planning and tight control.
