global considerations Flashcards
global considerations on operations
many businesses will look beyond their own borders when looking to run its operations system. it enables the business to take advantage of higher quality materials, strategic locations, cheaper inputs and global talent.
global sourcing of inputs
a strategy where a business sources its inputs from countries outside its place of origin. access to cheaper materials, access to materials not in the domestic country, specialise in production, lower tax rates. however it can lengthen delivery times, exposed to exchange rates, language barriers, legal standards different, risk of damage
overseas manufacture
where a business produces its goods in a country that is different to the location of its headquarters.
advantages are cheaper labour rates, large pool of employees, business not directly responsible for factory operations, works well with large volumes of simple assembly manufacture, access to new export markets. disadvantages are loss of jobs in domestic manufacturing, language barriers, legal and SCR different, sweatshop labour, shipping damage
global outsourcing
involves the contracting out of a business processes eg. payroll processing and claim processing, and non core functions eg call centre support, to another business advantage are cheaper labour rate, global expertise, focus on core business, works well IT based services. disadvantages are language barriers, internet connection reliance, scr standards different. an example is qantas outsourcing their it systems to Tata consultancy in India.
global supply chain
is the process of managing the flow of supplies from supplier, through the operations system and to the end consumer. every good or service that reaches the consumer is a cumulative effort of multiple businesses. to ensure supply chain is efficient businesses need to assess proximity to suppliers, quality of suppliers, cost of supplies and cost of transportation
