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Presented by: Dr. B.

WARNER

International Business, 6th Edition


International
Operations Management

Griffin & Pustay


17-1
Copyright 2010 Pearson Education, Inc. publishing as Prentice Hall
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

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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

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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.

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Operations Management
(continued)

International Operations Management:


refers to the transformation-related
activities of an international firm.

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Figure 17.1 The International
Operations Management Process

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Complexities of
International Operations Management

Resources

Location Logistics

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Forms of Operations Management

Service
Production Operations
Management Management

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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.

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Supply Chain Management

Vertical Integration is the extent to


which a firm either provides its own
resources or obtains them from other
sources.

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Figure 17.2 Basic Make-or-Buy Options

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Influence Factors for the
Make-or-Buy Decision

Size Scope of Operations

Technological
Nature of Product
Expertise

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Necessary Trade-Offs in the
Make-or-Buy Decision

Flexibility Cost

Trade-offs

Investment Control

Risk

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Factors Affecting Location Decisions

Country-related issues

Product-related issues

Government policies

Organizational issues

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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.

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Factors Distinguishing International and
Domestic Logistics

Transport
distance

Number of
transport modes

Complexity of
regulatory content

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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

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Managing Service Operations

Capacity planning

Location planning

Facilities design and layout

Operations scheduling

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Why would Multi National Corporations
(MNCs) use global sourcing as an alternative
to producing all the parts and materials in-
house?
What challenges might occur when the firm
relies on external sources to provide essential
components, parts and other production
inputs?

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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

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