Presentation is loading. Please wait.

Presentation is loading. Please wait.

International Operations Management

Similar presentations

Presentation on theme: "International Operations Management"— Presentation transcript:

1 International Operations Management
MGMT 6367 Fall 2013 Instructor: Yan Qin

2 Outline Course Overview
Learning objectives Topics to cover Course assessment Contact information Introduction to International Operations/Logistics What is Operations Management International Vs. Domestic Global Operations Strategy Supplement: Goods Vs. Services

3 Learning Objectives As a result of this course, students will be able to Understand the key strategic and operational aspects of international operations management to help in the design, planning, and execution of a firm's international operations; Comprehend how effective global operations can lower costs and improve responsiveness to customer requirements to provide a firm with competitive advantages; Apply theory and case examples on global supply chain management to help in the coordination of globally dispersed supply-chain activities; Apply theory and case examples on decision-making frameworks for global outsourcing and location of production facilities to help in the development of effective international operations strategies.

4 Topics to cover Global Operations Strategy Global Sourcing
Make or Buy Vendor Selection Supply Chain Coordination Facility Layout Transportation Management Distribution network design Facility Location Risk Management in the global context Information Systems

5 Grading scale Your letter grade is determined using the grade distribution that follows. You can calculate your percentage grade at any time in the semester by dividing the points you have accrued by the total points available up to that point. This percentage is then matched to a letter grade. A 90% or higher B 80 to 89% C 70 to 79% D 60 to 69% F Less than 60%

6 Course Assessment Grade breakdown Class Participation 20%
Individual Case Analysis % Individual Assignments % Two Exams % * Please refer to the tentative class schedule for all the post and due dates of the four individual assignments.

7 Individual Case Analysis
The purpose of this assignment is to identify and apply IOM (International Operations Management) concepts/tools to solve problems in managing international operations. To this purpose, you should find an interesting IOM problem from the real business world and think about how you can apply the IOM concepts/tools that you learned in this course to solve the problem. Detailed instructions can be found in the document titled “Individual project instructions”.

8 Assignments & Exams Individual Assignments Two Exams
There will be four individual assignments in total. Each assignment may consist of problem-solving questions, case-related discussion questions, or essay questions about specific issues in managing international operations. Each assignment accounts for 5% of the final grade. Two Exams There will be two non-cumulative exams in total. Both will be counted in the final grade. Each accounts for 20% of the final grade. The exams will be individual, timed, and open-book/notes. Only multiple-choice questions will be given on the exams.

9 Contact information Course Website: Class meeting time: Monday, 7 pm – 9:45 pm, except holiday Office: Room 338, Brazos Hall, UHSSL Office Hours: Every Monday, 6 pm – 7 pm, Or by appointment Contact number:

10 Operations Management
Production is the creation of goods and services. Operations include all the activities that relate to the creation of good and services through the transformation of inputs to outputs. Operations Management (OM) refers to the management of Operations activities to ensure the efficient utilization of all kinds of resources in meeting customer expectations.

11 Example: Operations activities in a Commercial Bank
Teller scheduling Check Clearing Collection Transaction Processing Facility Layout/design Vault Operations Maintenance Security Finance: Investment Securities Real estate Marketing: Loans Commercial Industrial Financial Personal Mortgage Accounting Auditing Trust Department Source: “Operations Management” by Heizer and Rander.

12 Example: Operation activities in a manufacturing organization
Operations: Facilities Construction; Maintenance Production and Inventory Control Quality assurance and control Supply Chain Management Product Design Industrial Engineering Efficient use of machine, space Process analysis Finance: Disbursements/credits Accounts receivable Accounts payable Funds Management Capital requirements Stock issue Bond issue and recall Marketing: Sales promotion Advertising Sales Market research Source: “Operations Management” by Heizer and Rander.

13 OM’s Transformation Role
Source: Raid and Sanders 2005

14 The 10 major OM decisions Ten Decision Areas Sample Issues
Design of goods and services What good or service should we offer? Managing quality How do we define the quality? Process and capacity What process and what capacity will these products require? Location strategy Where should we put the facilities? Layout strategy How should we arrange the facilities? Human resources and job design How do we provide a reasonable work environment? Supply chain management Should we make or buy this component? Inventory, material requirements planning, and JIT How much inventory of item should we have? When do we reorder? Intermediate and short-term scheduling Are we better off keeping people on the payroll during slowdowns? Maintenance Who is responsible for maintenance?

15 Operations Strategy Mission: the purpose or rationale for an organization’s existence. Ford Motor: “We are a global family with a proud heritage passionately committed to providing personal mobility for people around the world.” Operations Strategy is a long-term plan of actions designed to achieve a firm’s operational objectives, which are consistent with the mission. The mission statement usually includes a description of the products, the markets, geographical coverage of its activities, and an interpretation of its competitive advantages.

16 Four competitive Priorities
Cost Low cost strategy --- Low cost does not mean low value or quality. Wal-Mart provides low cost through its efficient management of transportation, inventory, and warehousing. Quality (2 dimensions) Design Quality --- The features, styling, and other product attributes that enhance fitness for use. Conformance Quality --- Product conformance to set production standards.

17 Four competitive Priorities
Service (2 dimensions) Delivery Speed --- Ability to produce and deliver the product quickly. Delivery Reliability --- Ability to produce and deliver according to contractually specified time intervals. Flexibility (3 categories) New-Product Flexibility --- Ability to introduce new products quickly and effectively.

18 Four competitive Priorities
Flexibility (Cont.) Product Mix Flexibility --- Ability to efficiently and effectively adjust the production mix in response to market demand. Production Ramp-up/down Flexibility --- Ability to rapidly expand/shrink the production process to accommodate changes in demand. It is very difficult for a company to excel in all aspects simultaneously due to limited resources. Each company must carefully identify the areas that may provide competitive advantages.

19 Questions: Competitive priorities
What are the competitive priorities of the following companies based on the descriptions? (1) HP demonstrates great flexibility in both design and volume changes in the business of personal computers. (2) Safeskin Corporation is number one in latex exam gloves because it has differentiated itself and its products. It did so by providing gloves that were designed to prevent allergic reactions. When other companies caught up, it developed hypoallergenic gloves. Then it added texture. Then it developed a synthetic disposable glove for those allergic to latex.

20 Qualifying and Winning Criteria
Qualifying criteria The basic criteria that permit the firm’s products to be considered as candidates for purchase by customers. Winning criteria The criteria that differentiate the products or services of one firm from another.

21 New trends in OM Global focus
Decline in communication and transportation costs has made markets global; Resources such as personnel and capital are available globally; Operations managers are responding with innovations that generate and move ideas, production, and finished good rapidly.

22 New trends in OM Just-In-Time performance Supply Chain partnering
How to free assets from inventory and improve responsiveness Supply Chain partnering Operations managers are outsourcing and building long-term relationship with its suppliers all over the world. Rapid product development Requires rapid responses in operations especially in high-tech industries New challenges appear when dealing with their foreign suppliers and managing the lengthened Supply Chain.

23 New trends in OM Mass Customization
Mass customization aims at supplying customized products and services to each customer in a responsive and cost effective way. Broadening product variety gives a company a distinctive competitive advantage in quickly responding to ever- changing market environments and customer tastes. Challenges in cost control and responsiveness. However, product proliferation also leads in increases in the number of setup times and the costs associated with material handling, inventory holding, and the logistics of managing variety.

24 New trends in OM Empowered employees
Operations managers are moving more decision making to the individual worker as more competence is now required at workplace. Environmentally sensitive production Concerned with designing products and processes that are environmentally friendly. Ethics Continuing challenge to enhance ethical behavior

25 Operations: Global Vs. Domestic
Riskier and more complex More risk factors to consider Transportation becomes more complex and costly. Product proliferation due to localization and mass customization.

26 Sources of Risk in the global environment
Risk Factors Natural disasters Shortage of skilled personnel Geopolitical uncertainty Terrorist infiltration of cargo Volatility of fuel prices Currency fluctuation Port operations/custom delays Customer/consumer preference shifts Performance of business partners Logistics capacity/complexity Forecasting/planning accuracy Supplier planning/communication issues

27 Operations: Global Vs. Domestic
Attention paid to cultural, political, and economic factors More difficult interpersonal management task: International business partners Officials in central and local governments Inventory cost gets higher. Longer and slower pipeline leads to more pipeline inventory Uncertainty in politics and production leads to more safety stock.

28 International Operations Management
Now what is International Operations Management (IOM)? IOM is just Operations Management in the global context. Why do we need to study Operations Management in the global context? Similarities and differences in the economic, cultural, legal, and political aspects in different countries bring about both opportunities and risks in the business world. IOM, as compared to OM, focuses on the use of operational strategies to take advantage of the unique opportunities that appear during the globalization process without being exposed to an unacceptable level of risk. Multinational firms and other international agencies invest overseas by initiating start-ups, entering into joint ventures, or acquiring existing organizations. Most of these transactions involve operations and logistics activities.

29 Supplement: Goods Vs. Service
Attributes of Goods Attributes of Services Tangible product Intangible product Product can be resold. Reselling a service is unusual. Product can be inventoried. Many services cannot be inventoried. Some aspects of quality are measurable. Many aspects of quality are difficult to measure. Selling is distinct from production. Selling is often a part of the service. Product is transportable. Provider, not product, is often transportable. Site of facility is important for cost. Site of facility is important for customer contact. Often easy to automate. Service is often difficult to automate. Services are often produced and consumed simultaneously. There is no stored inventory. For instance, the beauty salon produces a haircut that is “consumed” simultaneously, or the doctor produces an operation that is “consumed” as it is produced. Services are unique. Services have high customer interaction. Often difficult to standardize, automate, and make as efficient as we would like because customer interaction demands uniqueness. In many cases, uniqueness is what customers paying for. Services are often knowledge based, as in the case of educational, medical and legal services, and therefore hard to automate.

30 The output from most operations is a mixture of goods and services

31 Similarities between service providers and manufacturers
Both use technology Both have quality, productivity, & response issues Both must forecast demand Each will have capacity, layout, and location issues Both have customers and suppliers Both have scheduling and staffing issues

32 The Week after Labor Day
Global Sourcing Concepts in Sourcing Key decisions in Outsourcing What should be outsourced? Which vendors/providers are most suitable partners? What forms of relationship with partners should be used?

Download ppt "International Operations Management"

Similar presentations

Ads by Google