Dr. CemCanel • Office: CIS Building, 2016 • Phone (office): 962-3816 • Email: email@example.com
Population of Mini World If we could shrink the world’s population to a village of 100, with people and nations remaining the same, below is how we would look … There would be: • 57 from Asia • 21 from Europe • 14 from Western Hemisphere (North & South America) • 8 from Africa • 95 would live outside the U.S. • 70 would be Non-White; 30 would be White • 70 would be Non-Christian • 50% of world’s wealth in hands of 6 people – all from the U.S. • 70 unable to read • 50 suffer from malnutrition • 80 live in substandard conditions • 1 of 100 has a university education
Business Environment • Improvement of organizational activities to ensure quality, customer satisfaction , and loyalty • Org. Behavior • Policy • Strategy • The application of people, technologies, and procedures to solve business problems • Sales • Promotion • Research Behavior • The study of how the forces of supply and demand allocate scarce resources • Bookkeeping • Pensions • Audits • Nceufhkurreffg • Investments • Capital • Stock Market
Why go global? • Reduce costs • Improve supply chain • Provide better goods and services • Attract new markets • Learn to improve operations • Attract and retain global talent
International Environment • Environment • All the forces influencing the life and development of the firm • Forces • External Forces (Uncontrollable) – Forces over which management has no direct control • Internal Forces (Controllable) – Forces that management can use to adapt to external forces
The International Environment Political: Governments Ideology Stability Civil Strife Economic: Trade Agreements Trading Blocs GNP/Wages Inflation Cultural: Customs Values Language Religion The International Company Legal: International Law Host Country Laws Home Laws International Piracy Infrastructure: Communications Internet Transportation Technology
Multi-national Companies… US Factory US DC Americas Demand USSuppliers Singapore Factory European DC European Demand Off Shore Suppliers Asia/Pacific DC Asia/Pacific Demand Kit Suppliers
Types of International OM Decisions • Strategic • long term, often involving acquiring new resources • - e.g., power station construction (at electric utility) • Tactical • - medium term, utilization of existing resources • - e.g., workforce commitments • Operational • - short term, execution of schedules or control activities • - e.g., shift scheduling (in a hospital)
Responsibility for Quality Customer Marketing Service Quality Product Or Service Packaging and Storage Design Engineering Inspection and Test Procurement Production Process Design
Where would you locate… An amusement park? A new pharmacy? Amazon’s new distribution center?
Factors to consider… Distances to surrounding community? Patient traffic? An amusement park in ALASKA? A new pharmacy? Length of summer season? Sufficient population? Quantity of labor? Labor costs? Local laws? Distances from online customers? Transportation costs? Unions? Taxes? Dabur’snew distribution center?
IOM Decisions Where to locate franchises?
Global Supply Chain Management • Involves total systems approach to managing flow of • Materials • Information • Finances • Services
Global Sourcing • Considerations • Costs • Control • Expertise • Distance • Languages • Laws and regulations
Global Sourcing • The Lure of Global Sourcing • Suppliers with improved competitiveness • Cost • Quality • Timeliness • Suppliers in less developed countries (LDC) with low-cost labor • Attractive for labor-intensive products with low skill requirements
Logistics • Movement of materials • Must interface with sourcing , manufacturing, design, engineering and marketing • Packaging and transportation requirements can greatly increase logistics costs • Many companies outsource logistics
Container Ships Are Getting Larger
Globalization is the Future and cannot happen without international operations