INTERNATIONAL BUSINESS DYNAMICS

ASSIGNMENT ON GLOBAL BUSINESS OPERATIONS

Submitted by: SHASHANK DURGE

Notes on global operation management:

OPERATIONS MANAGEMENTS:

Operations management refers to the

administration of business practices to create the highest level of efficiency
possible within an organization. It is concerned with converting materials and
labour into goods and services as efficiently as possible to maximize the profit
of an organization.

1. Global operations management and competitive edge?

Global Operations Management (GOM) concentration prepares graduates

with state-of-the-art knowledge of managing operations in a global context. The
focus will be on contemporary issues related to operations function which are of
relevance in a firm’s ability to effectively collaborate with its supply chain
partners in order to remain competitive in a global economy. The GOM
concentration prepares students for careers with global manufacturing, service,
and consulting organizations by offering a variety of courses in management of
materials, quality, supply chains, services, global projects, and operations
strategy.

GLOBAL OPERATIONS CAREERS

• Supply Chain and Logistics Manager
• Purchasing Manager
• General Operations Manager
• Operations Research Analyst
OPERATIONS MANAGEMENT AND COMPETITIVE ADVANTAGE

• Competing on differentiation

• Competing on cost

• Competing on response

IMPORTANCE OF MANAGING GLOBAL OPERATIONS

1. Reduce cost

2. Reduce risk

3. Secure supply sources

4. Improve customer services

5. Attract new markets

6. Learn to improve operations

7. Attract global talent.

2. What are the strategic issues in, Global operations management?

When an international company possesses a particular technology and

decides to begin manufacturing, it needs to adopt a sound operation strategy so
as to enjoy competitive advantage. Manufacturing involves transformation or
conversion of new materials and inputs into good and services. It is there for
associated with activities or decisions related with manufacturing.

The operation strategy in a manufacturing company involves many issues. The

more important among them are:

• Manufacturing management
• Procuring

• Logistics management

• Other issues in managing global operations

MANUFACTURING MANAGEMENT

International manufacturing management provides an unparalleled opportunity

for companies to grow into new markets while at the same time boosting their
competitiveness. However, most of today’s networks are legacy structures only
a fraction was strategically planned. As a result, there is huge potential to be
captured from rethinking traditional structures, approaches and supply relations,
and huge potential for getting it wrong.

KEY ISSUES IN INTERNATIONAL MANUFACTURING MANAGEMENT

1. Geographical dimension

2. Regulatory regimes dimension

3. Working issues for labour force

4. Location issues

5. Increase in cost of production

PROCURING

Global procuring or sourcing occurs when buyers purchase goods and services
from sellers located anywhere in the in the world. Global sourcing of goods,
crops and other commodities has been common for many years in industries
such as manufacturing and agriculture, used as appositive strategy to reap
economic advantage

MODES OF GLOBAL PROCCURING

1. Importation

2. Establishment of international procurement offices (IPOs)

3. Sourcing through direct investment

LOGISTICS MANAGEMENT

Global logistics management is the process of planning, implementing and

controlling the flow and storage of goods and services and related information
from a point of origin to appoint of consumption located in a different country.
The global logistics function management function is naturally more complex
than the logistics function managed within one particular country

COMPONENTS OF GLOBAL LOGISTICS

1. International transportation

2. International insurance

3. Packaging needs

4. International means of payment

5. Teams of trade

6. The crossing of borders

7. Inventory

8. Environment of International logistics.

TECHNOLOGY TRANSFER

Technology transfer is the process of sharing of skill, knowledge, technologies,

methods of manufacturing, sample of manufacturing and facilities among
governments and other institutions to ensure that scientific and technological
developments are accessible to a wider range of users who can then further
develop and exploit the technology into new products, processes, applications,
materials or services.

REASONS FOR TECHNOLOGY TRANSFER

1. Profit from selling technology

2. Location and logistics advantage

3. Competitive edge

4. Grants and subsidiaries

5. Limitations of home country

6. Superior capital market

7. Enhance competence

3. Global outsourcing:

Global outsourcing involves the contracting out of a business process and

operational, and/or non-core functions like customer service outsourcing to
another party. It can be done to a company that is located anywhere in the
world. One of the biggest advantages of outsourcing is cost savings.

Global outsourcing is enabling business without barriers in a borderless world.

As enterprises think global, their outsourcing models have changed to follow
suit.

Outsourcing is no longer just a short term quick-fix to achieve cost reduction.

Global outsourcing uses a blend of onsite, offshore and near shore outsourcing
solutions to achieve strategic business objectives for the outsourcing company.
Today, there are job titles like "Chief Globalization Officer" and "Strategic
Services Manager" - which just goes to show that organizations are taking
seriously the impact of global outsourcing on the revenue growth and business
value of their companies.
As customers get more demanding, competition gets more intense and product
life-cycles shrink, there is increasing pressure on operating margins. The
complexity of global cross-border business management presents new
challenges as companies try harder to stay agile, profitable and innovative.
Business processes need to be flexible and adaptable to enable people to
respond faster to changing business needs. Services outsourcing must be aligned
to business goals, rather than be seen as just a tool for enhancing operational
efficiencies.
Global outsourcing takes a long-term holistic view of the client enterprise and
aligns its business goals to the outsourced service offerings, in contrast to
tactical short-term contracts that take a piecemeal project-by-project or simple
"out-tasking" approach to outsourcing.

Read more about  that enables companies to achieve their enterprise-wide

strategic goals and focus on core competencies.

Global outsourcing mitigates risks for the customer as it is not country-specific

or geography-dependent and allows more freedom and flexibility in decision-
making and operations during the outsourcing process. It allows businesses to
learn, adapt, grow and evolve while ensuring predictability in quality and
delivery in their business processes.

4. What is borderless world?

Borderless world is a concept of globalization where the goods, services,

technology, information, capital flow through the borders from one nation to
other. In this present day world of globalization, components may be produced
in one country, assembled in second country, marketed in third country and
financed from fourth country.

Hence running of businesses is changing drastically in a interesting way.

Organizations are finding a lot of opportunities to expand and run in other
countries. Resources can also be found very easily in a borderless world. Hence,
products are made very effectively and efficiently.

There is a lot of exchange of cultures happening in a borderless world. Running

a business in such scenario is itself a task. The issues businesses face today are
diverse. Managing the employees belonging to different cultures creates many
challenges to the human resource management department.
 

In the borderless world as the HRM is increasingly getting involved with the
strategic planning, the company's vision and mission should be reworked to give
a broader perspective so that employees of different cultures can align their
goals to the vision and mission. The organizations have to rework on the
policies, compensation, and structure time to time to attract and retain talent.
Organization's effectiveness completely depends on its people. Hence attracting,
utilizing, and retaining talent and their knowledge is very essential. The
management has to be trained and made aware of the cultures and cultural
differences they are dealing with. Hence, the cross cultural communication is
becoming increasingly important as organizations expand its business to other
countries. Impact of change in cultures during mergers and acquisition has to be
handled very carefully.