Introduction

According to Hitt (et al., 2014), operations management denotes the set of activities which create value through the transformation of materials or inputs into final products or services.  Rampant technological advancements, the lifting of international barriers to trade, the boom in certain undeveloped states, and market globalization are some of the factors causing a modification to the structure of many nations’ economy. These influences, among others, have pushed many companies to alter their strategies as well as how they conduct their commercial activities.  Fast transformation of business modus operandi entails a careful rethinking of the plan for operations management.  Innovative methodologies to the global new cycle of product development, logistics, sourcing, and manufacturing are necessary for sustaining and enhancing competitive advantage (Hitt et al., 2014).  These dynamics are well enunciated especially if the involved parties are affiliated to various scenarios of the economy.  However, it should be understood that internationalization procedures do not limit nation specific concerns but instead emphasizes them.

Nature of global operations management

Global operations management is defined as the myriad of activities utilized by a multinational business to transform various resource inputs like labor and materials, among others into final products and services.  A properly managed and designed operating system determines a company’s productivity as well as the quality of products and services produced. Again, operations management dramatically contributes to the determination of the speed of a company’s responsiveness to new technological developments, changes in the consumer’s tastes likings, competitive threats, pricing levels among others (Lasserre, 2017).

The strategic setting of global operations management should be closely related to the strategy of the organization. Its long-term strategy greatly influences the structuring and the control of a company’s operations.  A firm’s plan drives many activities of operations management including facility design, location and the controlling of logistics.

Global operations management happens to be a more difficult task than the controlling of domestic operations. At the international platform, managers and directors are obliged to compete with the many suppliers from many countries, different law and government regulations in all the areas the company does business, disparate networks and transportation facilities, long distances, and different markets.  Managers should decisively consider how and where to manufacture commodities. For instance, a company must decide on the most suitable location of a sales office or to establish a plant (Hitt et al., 2014). Additionally, the firm is also obliged to consider the ultimate supplier for its inputs and how to obtain to obtain them. Inventory levels and transportation choices should also be wisely considered. Logistics, location, and resources are the main complexities related to global operations management.

Product management

There are various issues regarding the process of product management which include global logistics, global control of supply chain, and worldwide facilities location

Vertical integration and management of supply chain

Supply chain denotes an array of procedures and steps companies use to source for the various inputs needed for creating final products and services.  This function is usually considered a strategic issue due to its underlying implications for the cost and quality of products as well as domestic capital demands. Vertical integration denotes the degree at which an organization either creates its resources or outsources them externally.

For an MNC to enter foreign markets, it must select the necessary method for shaping its international commercial activities. There are many methods of entry into the foreign business including franchising, licensing and direct investments such as mergers, ownership of new ventures, acquisitions and joint ventures. There are various streams of theories which handle the entry of companies into the international market like the analysis of transaction cost, behavioral theory, economic factors evaluation as well as the OLI approach. In short, global operations management is majorly change-related actions of a multinational firm.

Global operations management issues

Just as it has been earlier pinpointed, managers of multinational organizations must grapple with various issues related to the management of supply chain, logistics management as well as governing of the supply chain (Lasserre, 2017).

Location decisions

The likely decisions regarding location include the target countries for positioning the business and the kinds of products consumable by the market. The MNC should also consider the government policy about setting up the firm in a foreign land. Some factors like the political environment and taxation levels for business can either be detrimental to a business or an advantage.  Organizational decisions like the quality, expertise, and competence of the workforce should be taken into consideration when a company is going global (Hickson & Pugh, 2014).

Supply-chain management

The choices managers have to make regarding this aspect regards, partnering, sourcing, vertical integration, sourcing as well as make-or-buy decisions. Regarding sourcing, the MNC should look for the areas to get raw materials. The source should be very convenient to prevent the interruption of the supply chain. Moreover, the firm is also entitled to make radical choices regarding partnering. That is, does the company possess enough muscles to order for all inputs by itself or it will partner with other organizations with similar interests? Partnering may be a cheaper and convenient way because it can consider economies of scale (Lasserre, 2017). Regarding make-or-buy decisions, an MNC is faced with the challenge of deciding whether to make a particular component or to outsource it from other suppliers in consideration of the cost of producing the product and the desired margins.

Materials management

According to Hitt (et al., 2014) materials, management entails storage of goods, packaging, materials flow, options for transport as well as the speed. The articles should be transported at the most convenient speed to avoid production delays to the respective manufacturing centers. They should be packaged appropriately to facilitate proper flow and transportation of the inputs. The managers of the MNCs should also consider efficient shipping of the materials to the respective countries which manufacture their commodities. Inventory levels and lead times should well be calculated to avoid stock shortages.

Attaining Global Operations

Global business is the one that engages In international trade. Multinational corporations usually involve themselves with this kind of activity and won or controlled various facilities in many countries. A transnational company, on the other hand, is the one that combines the advantages of local responsiveness to the comprehensive benefits (Hickson & Pugh, 2014).   The following are the main reasons why companies would wish to globalize their operations.

First is to reduce costs, especially when they realize low-tax or tariff-free zones for conducting business. Another reason is to provide better commodities to its clients through the use of improved methods and technology which may not be at the home country.  Again, the majority of firms opt to go global to increase their market share, retain or attract global talent, learn different ways of enhancing performance together with improving their supply chains.

Considerations for attaining global operations

Managers of companies should consider the following factors before going global. First, they should gauge whether their product design is international. The technology and the design of their processes should be up-scale (Hofmann et al., 2013).  They should also consider if they have adequately handled the underlying cultural barriers and ethics that may impede their business progress. Some of the customer matters that must be solved in the international business platform include extended hours for lunch, bribery, punctuality variations and anticipations of thievery. The locations should also be suitable and convenient for the conducting of international business.

Lasserre (2017) states that in creating an international global services business, the managers of an MNC should determine if the available facilities or workforce are enough to facilitate the service creation. The company should establish the type of services which are of great interest to foreign clients. Again, the international markets for the dispensing of the services should be free (free from government control).

Managing operations for global service

To effectively manage an MNC doing service business, adequate location, capacity layout, and facility design planning should be undertaken. Scheduling of services is also essential to enhance efficiency in dealing with international operations (Mangan et al., 2016).

Conclusion

The management of international operations is essential if a company is to succeed in foreign business.  This means that logistics, location, and supply chain should be well considered to eliminate any sub-optimality prospect.  Managers of international operations grapple with issues regarding the management of the supply chain materials and location decision. However, the problem can be mitigated. Products, processes, procedures, and technology should be designed in a way which suits the culture, lifestyle, tastes, and preferences of the potential consumers of the MNC’s products and services. In this way, the efficiency of operations management globally will be attained.

References

Mangan, J., Lalwani, C., & Lalwani, C. L. (2016). Global logistics and supply chain management. John Wiley & Sons.

Lasserre, P. (2017). Global strategic management. Macmillan International Higher Education.

Hofmann, H., Busse, C., Bode, C., & Henke, M. (2014). Sustainability‐related supply chain risks: Conceptualization and management. Business Strategy and the Environment, 23(3), 160-172.//

Hickson, D. J., & Pugh, D. S. (2014). Management Worldwide: Distinctive Styles Among Globalization. Penguin UK.

Hitt, M. A., Ireland, R. D., & Hoskisson, R. E. (2016). Strategic management: Concepts and Cases: Competitiveness and globalization. Cengage Learning.

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