Lecture 1 Strategic Location Decision
Strategic production environment
- Assess strategic relationships with the entire fitting with institutional environment,
market, technology and labour opportunities and limitations and their respective
correlations with their organizational equivalents (Structure, strategy, equipment and
personnel)
- I.e. personnel can be influenced by education but also through the companies
themselves, as well as the individual.
Market characteristics ( Market development)
- Customer need ( Order winner, order qualifier)
- Product lifecycle ( Intro, growth, maturity, decline)
- Competitive position ( Benchmarking, customer/supplier information,)
Technology
- Investments in technology
- Infrastructural facilities (ICT, cluster of knowledge, Energy)
Paper Hall Gingerich 2009)
Labour ( Varieties of Capitalism) → Table ( Liberal = individ., Coordinated == collectivist)
- Labour relations -- corporate governance (institutional
- Growth economy -- coordination index
Relocation decisions
Companies relocation decisions:
- Labour costs
- Proximity to key customers
- Access to new markets
- Access to new knowledge/ tech/ clusters
- Fiscal opportunities
-
Companies backshoring motivations (developing economies becoming more developed)
- Quality
- Flexibility, ability to deliver on time
- Labour costs
, - Coordination and monitoring costs
- Availability /fluctuation of qualified personnel
Relocate and backshore to ? ( Check table)
Why? Changes in global risks ( i.e. Brexit)
Design method for international relocation:
- Identification phase (Problem definition, market position, location specific factors ,
competition etc.)
- Design phase (Plant Location analysis, capacity analysis, generate alternative
manufacturing & distribution structures)
- Selection phase Evaluation of alternative manufacturing and distribution structures ( 5%
costs)
Managing Networked production
How to manage international production network
- Face to face ( meetings, negotiation, communication) → Important: Language,
knowledge, behavior, rituals
- Company to company ( Contracts, alliances, JVs, M&A) → Important: Organization,
hierarchy, manager/employee relationships , attitudes towards work.
(
- Company to customer (marketing, product development) → Important: Consumer
preferences, quality of demand
Differences in work practices (TABLE)
,Fit with management practices to national culture ( Hofstede)
Industry 4.0
- Linking physical world of machines to digital world
- More autonomous decision making by machines
- Increasing communications by machines
Strategic production environment impacts on production strategy and can be influenced
Reasons to relocate are continuously changing
Technology allows information exchanges
Extent of congruence of organizational structure and culture affects the performance
Chapter 1 Manufacturing Planning and Control
= about planning and controlling all aspects of manufacturing )an effective mpc system can
contribute to the competive performance by lowering costs and providing greater
responsiveness to the market
Goals:
- Efficiently manage the flow of material
- Manage utilization of people and equipment
- Respond to customer requirements
, By making use of:
- Own facilities as well as the suppliers’ and the customers’
- Suppliers capacity
- Demand management (DM) = coordination of all acitivitiets of the business that palce
demands on manufacturing capacity ( order entry order promising etc.)
Supported by:
- Use of additional activities, like gathering information from customers on product needs
and providing customers with information on Delivery dates and product status
- KPI’s essential in effectively managing resources utilization
Key Influences on MPC
- Plug in compatibility: provide component specification and anyone can produce it
- Quickly shifting collaborations
- Breadth and depth of globalization
- fast growing economies, international agreements)
- Hallow corporation with a crucial role for the SC director
- Focus on core competencies (Nike, Apple)
- As a result→ outsourcing/ subcontracting
Nowadays:
1. An increasingly demanding role for customers & Increased use of technology
a. A faster response at lower cost aims at customer integration and responsiveness
( i.e. time to market, mass customization), which requires product
and process flexibility
b. Leads to more complex networks in operations compatibility
c. Global coordination and communication
d. Quality monitoring
3. Enterprise Resource Planning
= comprehensive software approach to first, efficiently handing of the transactions as goods
move through the production process and second support decision making concurrent with
planning and controlling the business
a. Provides information backbone for day to day execution
b. Integrates application programs in all organizational functions
c. Aims at horizontal integration
i. Requirements: Softwatr eshpuld be multifunctional in scope, integrated,
modular in structure and facilitate classic MPC activities
ii. Benefits: process improvement, training, information technology, strategic
ddirection and organizational flexibility
Key to keep up with evolution:
= ensure that system activities are synchronized and focused on the firm’s strategy
need for periodic auditing comparing the systems responses to those of the marketplace
Inlcuding the concomitant training of employees
- Changing competitive landscapes
Strategic production environment
- Assess strategic relationships with the entire fitting with institutional environment,
market, technology and labour opportunities and limitations and their respective
correlations with their organizational equivalents (Structure, strategy, equipment and
personnel)
- I.e. personnel can be influenced by education but also through the companies
themselves, as well as the individual.
Market characteristics ( Market development)
- Customer need ( Order winner, order qualifier)
- Product lifecycle ( Intro, growth, maturity, decline)
- Competitive position ( Benchmarking, customer/supplier information,)
Technology
- Investments in technology
- Infrastructural facilities (ICT, cluster of knowledge, Energy)
Paper Hall Gingerich 2009)
Labour ( Varieties of Capitalism) → Table ( Liberal = individ., Coordinated == collectivist)
- Labour relations -- corporate governance (institutional
- Growth economy -- coordination index
Relocation decisions
Companies relocation decisions:
- Labour costs
- Proximity to key customers
- Access to new markets
- Access to new knowledge/ tech/ clusters
- Fiscal opportunities
-
Companies backshoring motivations (developing economies becoming more developed)
- Quality
- Flexibility, ability to deliver on time
- Labour costs
, - Coordination and monitoring costs
- Availability /fluctuation of qualified personnel
Relocate and backshore to ? ( Check table)
Why? Changes in global risks ( i.e. Brexit)
Design method for international relocation:
- Identification phase (Problem definition, market position, location specific factors ,
competition etc.)
- Design phase (Plant Location analysis, capacity analysis, generate alternative
manufacturing & distribution structures)
- Selection phase Evaluation of alternative manufacturing and distribution structures ( 5%
costs)
Managing Networked production
How to manage international production network
- Face to face ( meetings, negotiation, communication) → Important: Language,
knowledge, behavior, rituals
- Company to company ( Contracts, alliances, JVs, M&A) → Important: Organization,
hierarchy, manager/employee relationships , attitudes towards work.
(
- Company to customer (marketing, product development) → Important: Consumer
preferences, quality of demand
Differences in work practices (TABLE)
,Fit with management practices to national culture ( Hofstede)
Industry 4.0
- Linking physical world of machines to digital world
- More autonomous decision making by machines
- Increasing communications by machines
Strategic production environment impacts on production strategy and can be influenced
Reasons to relocate are continuously changing
Technology allows information exchanges
Extent of congruence of organizational structure and culture affects the performance
Chapter 1 Manufacturing Planning and Control
= about planning and controlling all aspects of manufacturing )an effective mpc system can
contribute to the competive performance by lowering costs and providing greater
responsiveness to the market
Goals:
- Efficiently manage the flow of material
- Manage utilization of people and equipment
- Respond to customer requirements
, By making use of:
- Own facilities as well as the suppliers’ and the customers’
- Suppliers capacity
- Demand management (DM) = coordination of all acitivitiets of the business that palce
demands on manufacturing capacity ( order entry order promising etc.)
Supported by:
- Use of additional activities, like gathering information from customers on product needs
and providing customers with information on Delivery dates and product status
- KPI’s essential in effectively managing resources utilization
Key Influences on MPC
- Plug in compatibility: provide component specification and anyone can produce it
- Quickly shifting collaborations
- Breadth and depth of globalization
- fast growing economies, international agreements)
- Hallow corporation with a crucial role for the SC director
- Focus on core competencies (Nike, Apple)
- As a result→ outsourcing/ subcontracting
Nowadays:
1. An increasingly demanding role for customers & Increased use of technology
a. A faster response at lower cost aims at customer integration and responsiveness
( i.e. time to market, mass customization), which requires product
and process flexibility
b. Leads to more complex networks in operations compatibility
c. Global coordination and communication
d. Quality monitoring
3. Enterprise Resource Planning
= comprehensive software approach to first, efficiently handing of the transactions as goods
move through the production process and second support decision making concurrent with
planning and controlling the business
a. Provides information backbone for day to day execution
b. Integrates application programs in all organizational functions
c. Aims at horizontal integration
i. Requirements: Softwatr eshpuld be multifunctional in scope, integrated,
modular in structure and facilitate classic MPC activities
ii. Benefits: process improvement, training, information technology, strategic
ddirection and organizational flexibility
Key to keep up with evolution:
= ensure that system activities are synchronized and focused on the firm’s strategy
need for periodic auditing comparing the systems responses to those of the marketplace
Inlcuding the concomitant training of employees
- Changing competitive landscapes
