International Operations Management Griffin & Pustay 17-1 Copyright 2010 Pearson Education, Inc publishing as Prentice Hall International Business, 6th Edition chapter 17 Chapter Objectives • Describe the nature of international operations management • Analyze the supply chain management and vertical integration decisions facing international production managers • Analyze the meaning of productivity and discuss how international firms work to improve it 17-2 Copyright 2010 Pearson Education, Inc publishing as Prentice Hall Chapter Objectives (continued) • Explain how firms control quality and discuss total quality management in international business • Analyze how international firms control the information their managers need to make effective decisions 17-3 Copyright 2010 Pearson Education, Inc publishing as Prentice Hall Operations Management Operations Management is the set of activities an organization uses to transform different kinds of inputs (materials, labor, and so on) into final goods and services 17-4 Copyright 2010 Pearson Education, Inc publishing as Prentice Hall Operations Management (continued) International Operations Management: refers to the transformation-related activities of an international firm 17-5 Copyright 2010 Pearson Education, Inc publishing as Prentice Hall Figure 17.1 The International Operations Management Process 17-6 Copyright 2010 Pearson Education, Inc publishing as Prentice Hall Complexities of International Operations Management Resources Location 17-7 Copyright 2010 Pearson Education, Inc publishing as Prentice Hall Logistics Forms of Operations Management Production Management 17-8 Copyright 2010 Pearson Education, Inc publishing as Prentice Hall Service Operations Management Supply Chain Management Supply Chain Management is the set of processes and steps a firm uses to acquire the various resources it needs to create its products 17-9 Copyright 2010 Pearson Education, Inc publishing as Prentice Hall Supply Chain Management Vertical Integration is the extent to which a firm either provides its own resources or obtains them from other sources 17-10 Copyright 2010 Pearson Education, Inc publishing as Prentice Hall Government Policies • Stability of political process • National trade policies • Economic development incentives • Existence of foreign trade zones (FTZ) 17-19 Copyright 2010 Pearson Education, Inc publishing as Prentice Hall Organizational Issues Business Strategy Organizational Structure Inventory Management Policies 17-20 Copyright 2010 Pearson Education, Inc publishing as Prentice Hall International Logistics International logistics is the management of the flow of materials, parts, supplies, and other resources from suppliers to the firm; the flow of materials, parts, supplies, and other resources within and between units of the firm itself; and the flow of finished products, services, and goods from the firm to customers 17-21 Copyright 2010 Pearson Education, Inc publishing as Prentice Hall Factors Distinguishing International and Domestic Logistics Transport distance Number of transport modes Complexity of regulatory content 17-22 Copyright 2010 Pearson Education, Inc publishing as Prentice Hall Characteristics of International Services • Services are intangible • Services are not storable • Services may require customer participation • Services may be tied to the purchase of other products 17-23 Copyright 2010 Pearson Education, Inc publishing as Prentice Hall Managing Service Operations Capacity planning Location planning Facilities design and layout Operations scheduling 17-24 Copyright 2010 Pearson Education, Inc publishing as Prentice Hall Productivity Productivity is an economic measure of efficiency that summarizes the value of outputs relative to the value of the inputs used to create the outputs 17-25 Copyright 2010 Pearson Education, Inc publishing as Prentice Hall Strategies for Enhancing Productivity • Spend more on R&D • Improve operations • Increase employee involvement 17-26 Copyright 2010 Pearson Education, Inc publishing as Prentice Hall Managing Quality in International Business Quality: the totality of features and characteristics of a product or service that bear on its ability to satisfy stated or implied needs 17-27 Copyright 2010 Pearson Education, Inc publishing as Prentice Hall International Organization for Standardization 17-28 Copyright 2010 Pearson Education, Inc publishing as Prentice Hall Figure 17.4 Essential Components of Total Quality Management Strategic Commitment to Quality Employee High-Quality Involvement Materials 17-29 Copyright 2010 Pearson Education, Inc publishing as Prentice Hall Up-to-Date Technology Effective Methods Key Components of Total Quality Management Statistical Process Control 17-30 Copyright 2010 Pearson Education, Inc publishing as Prentice Hall Benchmarking Managing Information in International Business Information is data in a form that is of value to a manager in making decisions and performing related tasks 17-31 Copyright 2010 Pearson Education, Inc publishing as Prentice Hall Managing Information in International Business (continued) Information System is a methodology created by a firm to gather, assemble, and provide data in forms useful to managers 17-32 Copyright 2010 Pearson Education, Inc publishing as Prentice Hall All rights reserved No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without the prior written permission of the publisher Printed in the United States of America Copyright © 2010 Pearson Education, Inc publishing as Prentice Hall ... transformation-related activities of an international firm 17- 5 Copyright 2010 Pearson Education, Inc publishing as Prentice Hall Figure 17. 1 The International Operations Management Process 17- 6 Copyright 2010 Pearson... meaning of productivity and discuss how international firms work to improve it 17- 2 Copyright 2010 Pearson Education, Inc publishing as Prentice Hall Chapter Objectives (continued) • Explain... discuss total quality management in international business • Analyze how international firms control the information their managers need to make effective decisions 17- 3 Copyright 2010 Pearson Education,