Class Notes 10-20

Class Notes 10-20 - October 20, 2011 Global Challenges:...

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October 20, 2011 Global Challenges: Commodities II Changing Organization of Commodity Chains Fordism, 1920-70’s Post-Fordism/Flexible 1970’s Producer driven Market driven (no longer about mass consumption [standard items that everyone consumes i.e. similar in look] but more personalized In-house production Outsource to subcontractors Vertical integration Horizontal integration (array of subcontractors that are providing different parts) Just in case inventories Just in-time inventories (responding quickly to changing markets) Economies of scale Economies of scope (doesn’t mean that economies of scale aren’t important, but scale is important as well…find new niche markets) Shift made possible by drive toward free trade and the failing costs of telecommunications and transportation—more and more efficient (cheaper) to be able to move towards this kind of production and model Nike and Wal-Mart were 2 key models that followed this model Manufacturers also change this as well These changes have been praised on the grounds that: Outsourcing means workers in the global north can be put to more effective use Sourcing efficiency reduces costs to consumers SEZs and call centers provide new points of entry into the paid workforce…. Challenges?
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Class Notes 10-20 - October 20, 2011 Global Challenges:...

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