11 International Production, Supply Chains And HR Management Flashcards
Supply chain
Network linking tgt
- different aspects of value chain
- coordinating materials
- information
- funds from initial raw material supplier to ultimate consumer
Global sourcing
Materials mgt (includes sourcing)
Inventory mgt
Transportation bw suppliers, manufacturers, customers
Contract manufacturing
Entire manufacturing handled by another firm
Key factors influencing success for company‘s global production/manufacturing
- compatibility
- manufacturing configuration
- coordination
- control
Key factors influencing success for company‘s global production/manufacturing - compatibility
Degree of consistency bw foreign investment decisions and competitive strategy
Key factors influencing success for company‘s global production/manufacturing - manufacturing configuration
Company must decide:
1) centralise manufacturing in one country?
2) establish regional operations?
3) multidomestic production
Key factors influencing success for company‘s global production/manufacturing - coordination
Integrating activities into unified system
Key factors influencing success for company‘s global production/manufacturing - control
Measuring performance so company can respond to changing conditions
Why global sourcing?
1) reduce costs: cheaper labor, more flexible work rules, lower land and facility costs
2) worldwide technology
3) improve quality
4) access to materials and other resources from abroad
5) improve delivery-of-supplies process & reliability of supply (supplementing domestic suppliers with foreign suppliers)
6) establish presence in foreign market & react to competitors foreign location strategies
7) diversify supplier base
Modes of global sourcing
- vertical integration: one company owns entire international supply chain (or significant part)
- industrial clusters: buyers ans suppliers locate close to each other to facilitate business
- keiretsu: group of independent comp work tgt to manage flow of goods
Foreign trade zones (FTZ)
Areas in which domestic and imported merchandise can be stored, inspected, manufacture free from formal customers until they leave zone (SDM in Madeira)
Transportation
Crucial part of logistics - links suppliers, companies, customers
Human resource management in EPG model
Ethnocentric HR policy: recruitment/development in home country to key positions abroad
Polycentric HR policy: recruitment/development in host country for key positions in those countries
Geocentric HR policy: recruitment/development of the best - independent of origin (opportunities are independent of nationalities)
Three types for manufacturing configurations
- offshoring
- nearshoring
- reshoring/onshoring
Offshoring
Manufacturing outside home market based on cost efficiency
Nearshoring
Manufacturing outside home country, but regionally close
Reshoring/onshoring
Manufacturing moving back to home country
Holland is …. Largest exporter if food
Second
Evolution of industry
- Industry 1.0: mechanical production
- Industry 2.0: science, mass production
- Industry 3.0: energy, electronics, telcos
- Industry 4.0: digital transformation
Design principles and goals of industry 4.0
A: interconnection
B: information transparency
C: technical assistance
D: decentralised decisiosn
Industry 4.0 primary drivers
Digitalization and integration of vertical and horizontal value chains
Digitalisation of products and services
Digital business models and customer access
How industry 4.0 is changing drivers of internationalisation
Traditional drivers:
- availability of raw materials and land
- low cost labor
- tariff incentives and tax benefits
Cutting edge drivers
- network connectivity
- robotics/3D printing
- easiness to access R&D capital
- availability HR
Potential benefits for MNE
- increase productivity
- reduce costs
- improve quality control
- innovate faster
Problem in global HR mgt that hinder implementation of industry 4.0
- lack of skill set
- low top mgt commitment
- insufficient qualification of employees
