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PRODUCTION AND

OPERATIONSMANAGEMENT

Chapter 27

INTERNATIONAL

OPERATIONS MANAGEMENT

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Himalaya Publishing HouseProduction and Operations ManagementBy K. Aswathappa & K. Shridhara Bhat

Chapter 27

International Operation

Management

Nature of InternationalOperations Management

MNCs are financially sound and they spend

money on R & D to gain competitive advantage.

MNCs take advantage of location economies.

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Himalaya Publishing HouseProduction and Operations ManagementBy K. Aswathappa & K. Shridhara Bhat

Chapter 27

International Operation

ManagementStrategic Issues

In operations management, an MNC needs to madedecisions on several strategic issues. The following are theimportant issues:

1. Sourcing and vertical integration.

2. Facilities location3. Standardization of production facilities

4. Contract manufacturing

5. Supply chain management

6. Managing service operations7. International quality standards

8. Internationalisation of R&D, and

9. Managing technology transfers.

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Himalaya Publishing HouseProduction and Operations ManagementBy K. Aswathappa & K. Shridhara Bhat

Chapter 27

International Operation

Management

Outsourcing Outsourcing is the act of moving some of a firm¶s internal

activities and decision responsibility to external providers.

Country, technology, product, government policies and

Organisational factors need to consider facility locations inglobal market.

Resource availability infrastructure, and host communityare the country factors.

Value to weight ratio and universal need are the twoproduct-factors.

Incentives, subsidies, trade barriers, local product standardare the prime government factors.