Comprehension. Ex.1.Complete the sentences:

Ex.1. Complete the sentences:

1. Successive tiers of suppliers provide … inputs of materials, components and information 'upstream' from the firm

2. The SCM approach requires that the organization should be concerned with … with all upstream and all downstream firms, however distant and indirect the relationship.

3. SCM is concerned with the flow of … goods/services and information.

4. Purchase and supply of materials, components and information mean that there are important SCM decisions to be made in terms of … the nature of relationships, the number of supply firms (i.e. multiple or single sourcing) and whether to source in-house or from an external supplier.

5. Stock control means that … Efficient and effective SCM is essential if just-in-time methods are to be employed.

6. Distribution strategy is concerned with the nature of distribution … channels (direct or indirect, short or long, intensive or selective)

7. Physical distribution includes … both storage and transportation.

8. All firms in the supply chain need to add … value to output.

9. Appropriate management of the supply chain produces benefits in terms of … a reduction in stocks.

10. SCM also produces benefits in terms of … time-saving.

11. SCM encourages joint problem-solving to improve … quality and thus reduce waste.

12. Features of a partnership agreement are: … the sharing of success

- multiple points of contact

- long-term commitments

- joint learning

- information sharing

- joint problem-solving

- and, most important of all, trust

Ex.2. Answer the questions:

1. What are the three definitions of supply chain management?

2. What does the management of the internal supply chain refer to?

3. What does the development of long-term partnership with suppliers imply?

4. What are the ‘upstream’ and ‘downstream activities of the firm?

5. What are the basic components of SCM?

6. What does purchase and supply of materials suggest?

7. What does stock control mean?

8. What does distribution strategy include?

9. What does physical distribution mean?

10. What do they mean by saying that all firms in chain need to add value to output?

11. What benefits does appropriate management of supply chain produce?

12. In what way does SCM encourage partnership relationship?

Text 2

Competing Through Logistics

Within a given supply chain, it is important that each organisation understands how each group of products competes in the marketplace. It is impossible to be outstanding at everything, and supply chain partners need to give priority to capabilities that give each product group its competitive edge.

There are various ways in which products compete in the marketplace. The key advantage provided by logistics is product availability in the marketplace at low cost. Logistics supports competitiveness of the supply chain as a whole by meeting end-customer demand through supplying what is needed in the form it is needed, when it is needed, at a competitive cost.

Logistics advantage thus shows up in the form of such competitive factors as better product availability in the marketplace and low product obsolescence. Defining logistics advantage means that we need to set goals that are clear, measurable and quantifiable. The key advantage provided by logistics are quality, time and cost. There is a fourth, which is controlling variability in logistics processes: the dependability advantage. Let us look at each of these ways of creating advantage in turn.

The quality advantage

Quality is the most visible aspect of supply chain performance. Defects and late deliveries are symptoms of quality problems in supply chain processes that are all too apparent to the end-customer. Such problems negatively influence that customer's loyalty.

In many logistics situations, quality of service is about selecting the right quantity of the right product in the right sequence in response to customer orders. Logistics service providers who can implement and maintain the highest standards of service quality place themselves at an advantage over those who cannot.

The time advantage

Time measures how long a customer has to wait in order to receive a given product or service. Time can be used to win orders by companies who have learned that some customers do not want to wait - and are prepared to pay a premium to get what they want quickly.

The time advantage is variously described as speed or responsiveness in practice. Speeding up supply chain processes may help to improve freshness of the end product, or to reduce the risk of obsolete or over-aged stock in the system. Time is an absolute measure, that is, it is not open to interpretation like quality and cost. By following a product through a supply chain, we can discover which processes add value and which add time and cost but no value.

The cost advantage

Cost is important for all supply chain processes - that goes without saying. Low costs translate into advantages in the marketplace in terms of low prices or high margins, or a bit of each. Many products compete specifically on the basis of low price. This is supported from a supply chain point of view by low-cost manufacture, distribution, servicing and the like. Examples of products that compete on low price are 'own brand' supermarket goods that reduce the high margins and heavy advertising spend of major brands. They also perhaps cut some of the corners in terms of product specification in the hope that the customer will consider low price as being more important than minor differences in product quality.

Controlling uncertainty: the dependability advantage

Time is not just about speed. It is also about controlling uncertainty in logistics processes. Uncertainty undermines the dependability with which a product or service meets target. Firms who do not offer instantaneous availability need to tell the customer - in other words to 'promise' - when the product or service will be delivered. Delivery dependability measures how successful the firm has been in meeting those promises. Dependability measures are widely used in industries such as train and air travel services to monitor how well published timetables are met. And in manufacturing firms, dependability is used to monitor a supplier's performance in such terms as:

• on time (percentage of orders delivered on time, and the variability against target);

• in full (percentage of orders delivered complete, and the variability against target).

It can be concluded that the basic ways of competing through logistics are quality, speed and cost objectives. Briefly, quality is about doing things right, speed is about doing things fast, and cost is about doing things cheaply. A fourth way is through better control of logistics processes, which makes them more dependable.

Ex.1. Match the words in column A with their English equivalents in column B:

A	B
1. a competitive edge	a) маржа (торговая наценка, устанавливаемая промышленными предприятиями)
2. product availability	b) лояльность (приверженность) потребителя
3. product obsolescence	c) конкурентное преимущество/отличие
4. dependability	d) устаревание продукта
5. customer's loyalty	e) оперативная готовность
6. a margin	f) наличие товара
7. instantaneous availability	g) надёжность
8. to meet a promise	h) выполнять обещание

Ex.2. Match the words in column A with their definitions in column B:

A	B
1. a supply chain	a) without omitting, decreasing, or shortening
2. obsolete	b) an item packaged and marketed under the brand name of a particular retailer, usually a large supermarket chain, rather than that of the manufacturer
3. an own brand	c) marketing a channel of distribution beginning with the supplier of materials or components, extending through a manufacturing process to the distributor and retailer, and ultimately to the consumer
4. to cut corners	d) at the expected or scheduled time
5. a spend	e) not current,out of date; outmoded
6. on time	f) to do something in the easiest or shortest way, esp at the expense of high standards
7. in full	g) (informal) an amount of money spent out

Ex.3. Answer the questions:

1. What do supply chain partners need to give priority to?

2. What is the key advantage provided by logistics?

3. What are the ways of creating logistic advantage?

4. Why quality is an important factor of logistics?

5. How can the time advantage be described?

6. How can cost advantage be achieved?

7. What does dependability advantage suggest?

Text 3

Read the text below, and insert words that follow

capacity	component	inventory	lead times
outsourcing	plants	subcontractor	location

Just-In-Time Production

Manufacturing companies are faced with a ‘make-or-buy decision’ for every item or 1) component… they use (as well as for every process and service). Do they make it themselves or do they outsource, and buy from a 2) subcontractor …? If a company assembles products supplied by a large number of subcontractors, they face the problem of how much 3) … inventory they require.

In Just-in-Time (JIT) production – also called lean production, stockless production, and continuous flow manufacture – nothing is bought or produced until it is needed. Each section of the production process makes the necessary quantity of the necessary units at the necessary time – which is when it is required by the next stage of the manufacturing process or by distributors or customers.

The JIT system is usually credited to Taiichi Ohno, who was vice-president for manufacturing with Toyota in Japan in the early 1950s – although he stated that he got the idea from American supermarkets! JIT is wholly contrary to the European and American logic of encouraging greater productivity, and welcoming production that exceeds the agreed schedule or quota, and stocking extras in case of future problems.

JIT minimizes the cost of holding inventories, which are regarded negatively, as avoidable costs, rather than as assets. The large Japanese manufacturing companies have long practiced 4) … outsourcing …, and generally use extensive networks of small subcontractors. Of course, if a single subcontractor fails to deliver a component on time, the whole production process is sabotaged, but the Japanese industrial system relies on mutual trust and long-term relationships. Small suppliers often attempt to situate their facilities close to the 5) …… location … of a large company with which they work.

The Japanese also prefer small, specialized production 6) … plants ………… with a limited 7) … capacity, in which, wherever possible, all the machines required for a certain job are grouped together. This avoids all the waiting and moving time involved in sending half-finished items from one department to another, although it often requires flexible, multi-skilled employees.

JIT thus greatly reduces transportation and inventory costs, and should ensure that there is no waste from overproduction, or from idle workers waiting for parts. It allows increased productivity because of shortened throughput time. If factories are equipped so that set-up times are short, very small production runs are possible. Any quality problem or product defects should be noticed more quickly, production 8) … lead times … are reduced, and the firm can react more rapidly to demand changes.

Ex.1. These are some basic words used in relation to industrial production. Match them up with the definitions below.

capacity component inventory lead time location outsourcing or contracting out plant subcontractor

1. any company that provides goods and services for another one subcontractor

2. any of the pieces or parts that make up a product, machine, etc. component

3. buying products or processed materials from other companies rather than manufacturing them outsourcing or contracting out

4. the (maximum) rate of output that can be achieved from a production process capacity

5. the buildings, machines, equipment, and other facilities used in the production process plant

6. the geographical situation of a factory or other facility location

7. the stock of any item or resource used in an organization (including raw materials, parts, supplies, work in process and finished products) inventory

8. the time needed to perform an activity (i.e. to manufacture or deliver something) lead time

Ex.2. According to the text, are the following statements TRUE or FALSE? If they are FALSE, say why.

1. In JIT, products are ‘pulled’ through the manufacturing process from the end, rather than ‘pushed’ through from the beginning True

JIT originated in American manufacturing False

3. JIT encourages production workers to exceed their production targets False

4. Companies using the JIT system and outsourcing many of their components are highly dependent on their subcontractors. True

5. In a JIT system, a delivery of defective components can be replaced from the reserve inventory. False

6. JIT depends on harmonious partnerships between a company and its suppliers True

7. Japanese production systems generally speed up the entire manufacturing process. True

8. JIT leads to economies of scale. False

9. JIT production – manufacturing only when a customer places an order – does not encourage innovation or the creation of demand.

Ex.3. After it has been decided what to manufacture, operations managers have to decide where to manufacture the different products, how much productive capacity their factories and plants should have, and how much inventory to maintain. Read the 15 sentences below, and classify them under the following six headings. Some sentences may fall under two headings.

A the consequences of insufficient capacity B the consequences of excess capacity C the advantages of large facilities D the disadvantages of large facilities E the advantages of having a large inventory F the disadvantages of having a large inventory

1. A long lead time may allow competitors to enter the market A and E

2. Average fixed cost per unit drops as volume increases because each succeeding unit absorbs part of the fixed costs, giving economies of scale C

3. Finding staff and coordinating material flow become expensive and difficult D

4. If lead tome increases, some customers may go to other suppliers A and E

5. Lost sales and market share are usually permanent A and E

6. T he working environment might worsen and industrial relations deteriorate D

7. There are costs of storage, handling, insurance, depreciation, the opportunity cost of capital and so on F

8. You can be more flexible in product scheduling, and have longer lead times and lower cost operation through larger production runs with fewer set-ups E

9. There is always a risk of obsolescence, theft, breakage, and so on F

10. You can meet variation in product demand E

11. You may be under-utilizing your work force B

12. You have protection against variation in raw material delivery time (due to shortages, strikes, lost orders, incorrect or defective shipments, etc.) E

13. You may be forced to produce additional less profitable products B

14. You can take advantage of quantity discounts in purchasing C and E

15. You may have to reduce prices to stimulate demand B and F

TRANSLATION

A. Use a dictionary to translate into Russian.

Freight transport is a critical aspect in business and trade, as it provides the link between supply and demand. It is therefore a foundational enabler in economic trade, involving as it does the movement of goods and product trade on a national or international scale. Indeed the growth of global production offshoring in recent years has brought freight transport into a sharper focus, as organisations increasingly try to balance cost with service reliability and inventory stock levels.

Freight Transport Management includes various strategies of increasing the efficiency of freight and commercial transport. Logistics is a technical term for efficient freight management, including shipping practices (e.g., vehicle type, shipment size, frequency, etc.), facility siting, and related activities. Logistics usually focuses on minimizing shipper costs, with little consideration of social costs such as congestion or pollution impacts. Below are examples of Freight Transport Management activities:

· Encourage shippers to use modes with lower social costs, such as rail and water transport rather than truck for longer-distance shipping. Trucking uses much more energy per unit of transport than rail or water (ten times as much in many situations), although only certain types of goods and deliveries are suitable for such shifting.

· Improve rail and marine transportation infrastructure and services to make these modes more competitive with trucking. (Note that by reducing shipping costs this may increase total freight traffic volumes, resulting in little or no reduction in energy consumption, emissions or other externalities.)

· Improve scheduling and routing to reduce freight vehicle mileage and increase load factors (e.g., avoiding empty backhauls). This can be accomplished through increased computerization and coordination among distributors.

· Organize regional delivery systems so fewer vehicle trips are needed to distribute goods (e.g., using common carriers that consolidate loads, rather than company fleets).

· Reduce total freight transport by reducing product volumes and unnecessary packaging, relying on more local products, and siting manufacturing and assembly processes closer to their destination markets.

· Use smaller vehicles and human powered transport, particularly for distribution in urban areas.

· Implement fleet management programs that reduce vehicle mileage, use optimal sized vehicles for each trip, and insure that fleet vehicles are maintained and operated in ways that reduce external costs (congestion, pollution, crash risk, etc.).

· Encourage businesses to consider shipping costs and externalities in product design, production and marketing, for example by minimizing excessive packaging and unnecessary delivery frequency, and relying on more local suppliers.

· Change freight delivery times to reduce congestion.

· Increase land use accessibility by clustering common destinations together, which reduces the amount of travel required for goods distribution.

· Pricing and tax policies to encourage efficient freight transport.

· Increase freight vehicle fuel efficiency and reduce emissions through design improvements and new technologies. These include increased aerodynamics, weight reductions, reduced engine friction, improved engine and transmission designs, more efficient tires, and more efficient accessories.

· Improve vehicle operator training to encourage more efficient driving.

Heavy trucks represent about 10% of total vehicle mileage, and smaller commercial vehicles represent another 5-10% of total vehicle traffic. Heavy trucks represent a major share of total traffic on some highways, particularly around major ports, rail terminals and industrial areas. Because of their size, freight trucks impose relatively high congestion, road wear, accident risk, air pollution and noise costs, so travel reductions can provide significant benefits in areas where they are concentrated.

B. Translate into English:

Логистика— часть экономической науки и область деятельности, предмет которой заключается в организации рационального процесса продвижения товаров от производителей к потребителям, функционирования сферы обращения продукции, товаров, услуг, управления товарными запасами, создания инфраструктуры товародвижения.^[1]

Более широкое определение логистики трактует ее как науку о планировании, управлении и контролем движения материальных, информационных и финансовых ресурсов в различных системах. ^[2]

С позиции менеджмента организации логистику можно рассматривать как стратегическое управление материальными потоками в процессе закупки, снабжения, перевозки и хранения материалов, деталей и готового инвентаря (техники и проч.). Понятие включает в себя также управление соответствующими потоками информации, а также финансовыми потоками. Логистика направлена на оптимизацию издержек и рационализацию процесса производства, сбыта и сопутствующего сервиса как в рамках одного предприятия, так и для группы предприятий.

WRITING

Write a summary to the article that follows. Make use of the table to list advantages and disadvantages of lean production.

To list advantages	One/Another/A further/An additional (major) advantage of... is …, The main/greatest/first advantage of... is...
To list disadvantages	One/Another/ A further/An additional (major) disadvantage/drawback of…, The main/greatest/most serious/first disadvantage /drawback of …, Another negative aspect of...

Lean Production

Why lean?

Lean production aims to avoid waste by making efficient use of a firm's key resources (labour, raw materials, machinery and time). Elements within this approach include:

(1) Just-in-time (JIT). Components arrive just as they are needed, eliminating the need for stockpiles of parts which tie up cash that could be earning interest elsewhere.

(2) Kaizen groups. Individual employees and groups are encouraged (or in some cases obliged) to contribute suggestions for productivity and quality improvements. The aim is 'continual improvement' — every employee should be constantly focused on ways of carrying out their job more effectively.

(3) Total quality management. A philosophy of zero defects is created throughout the entire organisation, reducing the need for rework and cutting wastage.

(4) Cell production. Employees are grouped into teams; each team is generally assigned 'internal customers' who will demand certain levels of performance.

(5) Simultaneous engineering. Areas such as new product design are analysed to assess whether time can be saved by carrying out some processes in parallel with others.

The introduction of techniques such as these has had a dramatic impact in terms of driving down costs and increasing the profits of firms in which they have been successfully implemented. Daimler-Chrysler reported $300m cost savings in 2000 as a result of its new lean production programme. The increasing pressures of global competition are encouraging firms in all sectors, not just the traditional area of vehicle manufacture, to challenge their existing processes.

Problems with lean production

Nevertheless, it has been suggested that lean management is best suited to an environment in which cost cutting is essential. Lean techniques were first introduced in the UK/US car market, for example, when firms were facing declining sales and profitability as a result of tough competition from Japan. It is possible that some lean operators may face problems coping when demand is rising rapidly because of the very streamlined nature of their operations.

The main issues for lean management seem to come from three interlinked areas: demand volatility, supply chain management, and labour turnover and other employee implications.

(1)Demand volatility

An important part of lean production is the ability to estimate demand effectively. Because there are minimal stocks of parts, and capital equipment is only sufficient to meet needs, an unexpected surge in demand can create significant problems for firms.

(2)Supply chain management

Problems with unexpected demand can be exacerbated by problems with supply chain management, especially when a firm is operating internationally. As globalisation accelerates, many firms are taking advantage of low-cost production locations in newly industrialising countries. Dyson's recent announcement of a move to Malaysia is a typical example. However, the cost savings from such location decisions do not always mesh well with lean operations, unless key components can also be sourced locally.

Studies have shown that where firms have very complex chains of supply, involving many different components and an international environment, modelling the necessary delivery times involves complex and expensive computer systems. This reliance on complex computer systems can backfire if delays in implementation occur. The big US chocolate manufacturer, Hershey, was hit in late 1999 when software upgrades to its ordering systems were not ready for its late-summer production ran (when products are produced for Halloween and Christmas). Consequently, profits fell by 20% due to difficulties in meeting demand.

Even if technology is working well, unexpected surges in demand are still difficult to resolve if a supplier is a month away in terms of shipping times. Lean producers have sometimes had to resort to using international airfreight, or other premium-rate services, to acquire the components that they need to keep their business running. Inevitably this drives up costs and erodes the benefits of both lean operations and a low-cost overseas location, increasing the possibility that 'just-in-time' may become 'just-too-late'.

(3)Labour turnover and other employee implications

Labour turnover aims to maximize productivity in terms of output per worker – kaizen, for example, aims to find ways of wasting less time and getting more out of each employee. The potential consequences of lean operations can be more stressful jobs and negative health and safety implications.

In terms of safety at work there are numerous accidents that seem to have been contributed to by rushing and pressure of work. The risk to firms is an increase in compensation claims.

Finally, flexible working means that working hours vary unpredictably and this may influence family life of employees and cause them to leave the job. These workers have to be replaced, again increasing costs of the firm.

Well-managed and thoughtful introduction of techniques such as kaizen and JIT can have a major positive impact on firms’ profitability. Even so, there are many hidden costs that may occur if lean techniques are not managed properly.

LISTENING

A. Good networkers often have a couple of questions prepared. Look at these examples and decide which one(s) you would and wouldn’t use. Give reasons for your choice. Add five of your own questions you ask a person you meet for the first time or don’t know very well.

How much do you earn?

What do you like most about (living in …/your job/ this event/place)?

What’s your opinion on this restaurant/event/place?

Do you come her often?

What do you recommend I do/see (in your town/country/regin)?

What’s the weather like in your country/region/city at the moment/

What’s the political situation in your country/region/city at the moment?

What do you think of the new boss?

B. Listen to the following conversation between some delegates at the conference on intercultural communication in business held in Brussels. Tick if you hear the speakers do anything of the following.

	Melanie	Konrad
1. Ask for information
2. 2. Greet someone
3. Compliment someone
4.Accept a compliment
5.Agree with someone
6.Express interest
7.Refer to a previous conversation
8.Exchange business cards
9.Refer to future contract
10.Introduce someone to a useful contract

C. Work in pairs introduce yourself to another participant at an international conference.

SPEAKING

A. Useful Language: Networking

Introductions

Could I introduce you to a collegue of mine?

I’m afraid I’ve run out of cards, but I can give you our company website/e-mail/phone number.

Finding things in common

What about your self? Have you lived here long?/ Have you worked for the company for long?

Really? That’s a coincidence! So have /do/am I.

Invitations

Here’s my business card. Please give me a call if you ever in…(region/city).

Would you be interested in visiting our company/ having lunch/ playing golf some time?

Thank you. That would be great/lovely/nice/very interesting.

Finishing a conversation

It’s been a pleasure talking to you.

Enjoy the conference/ your stay/ your meal/

B.

Case Study 1.

Working for Logistaid

Background: Logistaidis NGO (non-government organisation) that provides emergency assistance in more than 80 countries. A group of logistics managers is undergoing a training programme in Amsterdam before being relocated to Indonesia with the organization. The logisticians are receiving training from the Centre for Intercultural Communication in Amsterdam. The programme includes how to adapt to their new environment and improve interaction in social and workplace settings.

Task 1. You are applying for the position of Logistics Manager with Logistaid. Look at the advert and make a note of any relevant skills and experiences required. What kind of candidate do you think might be interested in this kind of work?

LOGISTICIANS

Logistaid is currently looking for trainee logisticians to work in various worldwide locations. Candidates will possess leadership skills, have a good command of English and another language, and be willing to work alongside local teams in a challenging intercultural context. Relevant experience in logistics is desirable but not essential. Training provided.

Logisticians are responsible for the technical and operational support of medical activities. Activities include:

· purchasing, transporting and distributing aid supplies

· maintaining vehicles, communications equipment, office and housing accommodation

· training and supervising local and non-medical staff

· supervising and implementing repair and construction work

· related administrative activities

· liaising with local authorities and other organisations

Task 2. Work in pairs. You are trainee logisticians for Logistaid and you are on your lunch break during the course. Read the intercultural communication programme and then talk to one of the other participants. Follow the instructions for Student A and Student B that are below Task 3.

INTERNATIONAL RELOCATION PROGRAMMES

Organisations working internationally site the following reasons for failure in a foreign country;

1. culture shock and adaptation challenges (including re-entry into the home culture)

2. difficulty in earning trust and establishing relationships

3. failure to understand local systems

4. language barriers and intercultural misunderstandings

5. differences in business practices and management styles

Task 3. Work in groups of three. You are networking with some of the course participants. Follow the instructions for Student A, B and C that are below.

Student A: These are your incomplete notes for the country-orientation session as, unfortunately, you had to leave early. Ask the other trainee to explain to to you what you missed. When you have finished, discuss how useful these notes for working and leaving abroad. The numbers coincide with the numbers of reasons for failure in a foreign country sited by organizations working internationally.

1.

· Don’t underestimate culture shock; initial excitement can soon turn to criticism.

· Find a balance between finding out about the new culture and spending time with people from your own culture.

· When you return home, don’t expect family/friends to be interested in all your stories. It is important, however, to find people that you can talkto who have had similar experiences.

2.

· Building relationships is highly important in many non-Western cultural contexts; make sure you spend some time getting to know local people.

Student B: These are your incomplete notes for the country-orientation session as, unfortunately, you had to leave early. Ask the other trainee to explain to you what you missed. When you have finished, discuss how useful these notes for working and leaving abroad:

4.

· Apart from obvious language problems, misunderstandings often arise due to differences in attitudes to time and punctuality, dres codes, importance of loss of face and so on. Be respectful to the traditions, customs and behavior of the people you are working with.

· Be careful when using humor; what is funny in one culture may be offensive in another.

5.

· Do not jump to conclusions about work practices; you may have only a superficial understanding of why things are done the way they are.

· Go into your project with the philosophy ‘What am I going to learn from this experience?’ rather than ‘What am I going to teach the locals?’ you will have a less stressful time, frustrate fewer people and build up long-lasting work relations.

Student C: Until recently, you have bee working as a purchasing manager for a pharmaceutical company in Germany. You left the job because, after 5 years, you were getting bored. When you saw the ad for Logistaid on the internet, you thought it would be the perfect opportunity to travel, to get to know people from different cultures and broaden your horizons. You have learnt a lot of thing on the course, but are worried about being relocated because you don’t know the area.

1. Network with the other course participants and find someone who:

· took the job for the same reason as you

· hasn’t found the course very useful

· has previously done similar work in Nigeria and Mozambique

· has been in Indonesia and Thailand on holiday/

2. Think f some hobbies or interests you may have; find someone with similar hobbies/interests.

3. Agree to a further meeting before being relocated and promise to keep in touch when you are in Indinesia.

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