Examine the Impact of globalization on operations strategy. The business world Is developing Into a more Internationally interactive and Integrated establishment essentially forming a global economy, this is known as globalization. This growing sensation has had a major impact on all businesses and companies worldwide and on their operations strategies.
Globalization impacts operation strategies such as performance objectives, new product development, supply chain management, outsourcing, technology innovation and advancements and management inventory; as businesses try to manage their operations strategies to effectively respond to libations.
Boeing- The American company of Boeing Is a multinational airplane and defended corporation. Boeing is one of the largest manufacturers of aircrafts in the world has is the second largest aerospace and defended contractor globally. As a result Boeing is the largest exporter by value in the U.
S. , this success and the international competitiveness of the company Is due to the advent of globalization and Boeing’s global alliances. Globalization has enabled Boeing to reconsider their operations strategies to correspond with the global economy of today.
The production and placement of the new product the ‘Boeing 787 Dreamlike’ is recognized as a state- of-the-art global production which had been produced and developed through the Integration of globalization to achieve competitive advantage over major competitors Airbus.
Globalization enabled Boeing to outsource the production of the Dreamlike on a global scale essentially forming a global supply chain with the use of global sourcing and value adding throughout production. Technology advancements enabled frequent and effective communication between Boeing and contracting companies throughout the outsourcing strategy.
The production of the Dreamlike is outsourced globally as an incentive to produce a product with a high level of quality In design and conformance to achieve the business’ performance objective indicator of quality. F the components of the Boeing 787 Dreamlike are supplied by foreign contractors. The global nature of the aircraft market enabled Boeing to outsource globally to obtain outstanding development and supply services to achieve efficient and cost effective production of the Dreamlike 787 which is recognized as an advantage of outsourcing. Globalization and outsourcing has also enabled Boeing o coincide with more than 20 international system suppliers to advance technology, design ideas and produce the 787 resulting in product design and development throughout the production of the 787.
An example of Boeing outsourcing production of the Dreamlike 787 Is Japanese companies such as Tray, Testing Sell, If}, Sukiyaki, and Meticulous and Italy Elena Aeronautic providing and producing over 45% of the Dreamlike production. With the US dollar being at a higher rate to those countries to which they outsource labor is cheaper and is recognized as cost effective whilst the labor is also skilled within the contracting companies to achieve efficient production.
A number of leading edge aerospace technologies were also used in the production of the 787 through the use of outsourcing and product design and development. As a result of globalization, the globally produced the Dreamlike, I OFF fastest selling commercial Jets in history. Ezra- Ezra, a Spanish clothing and accessories manufacturer and retailer, is the leading brand of parent company Inedited Group contributing 64% of total sales within the group in 2011. 011 saw Ezra reach up to 82 global markets and achieve 1,830 stores worldwide.
Globalization and technology advancements has assisted consumers in having additional access to fashion essentially putting pressure on fashion retailers globally. The responsiveness of operation’s management at Ezra has enabled operations strategies to correspond with the changing business world as it develops into a more integrated and interactive global economy. The success of the business is a result of Sara’s responsive consumer based supply chain and the speed and flexibility of performance objectives.
Ezra incorporates a vertically integrated supply chain which focuses on the current trends and the demand of the consumers in retail stores. Globalization has allowed communication between different Ezra branches around the world, enabling them to continuously converse the demand of customers, trend information and feedback to Inedited and Ezra headquarters. The effectiveness of Sara’s performance objectives of speed and flexibility are highlighted in the production of Ezra products as they respond immediately to customer demand, trend information and feedback.
This is made available with the majority of Sara’s design, production, warehousing and logistics being operated internally allowing these procedures to be vastly responsive. Interaction between economies has resulted in easier, faster and cheaper transportation of goods globally. Ezra has taken advantage of this benefit of globalization as they strive for effective use of the supply chain strategy of logistics. Ezra products are distributed from the distribution centre in La Corona to stores twice a week in lesser consignments.
This operation strategy is used by Ezra allowing inventory to be minimal within Ezra stores worldwide. Stock is shipped to European stores within 24 hours and to American and Asian stores within 48 hours facilitating Ezra with an opportunity to keep the store fresh and to resist the need of holding of stock. Globalization has seen many businesses become more active on an international scale with the use of e- commerce.
With the more frequent use of e-commerce strategy within the retail and fashion sector, Ezra reactively responded with the implementation of an e-commerce website using the business to consumer approach providing online purchasing for all consumer countries in which Ezra sells. Example of a positive and negative impact of globalization- Globalization has had a positive and negative effect on the operations strategies of a number of businesses and companies. The main outcome of globalization within businesses is the introduction of outsourcing.
Boeing successfully used outsourcing throughout the production Dreamlike 787 to access skilled labor but also as a cost positive impact by globalization on the company’s operations strategy. However a number of businesses suffer the disadvantage of communication and language barriers between outsourcer and contractor as well as contractor and employees as a exult of the use of outsourcing. An example of this is the Australian bank sector outsourcing to predominately Asian countries.
Businesses must ensure that operations management respond efficiently to globalization impact on operations strategies used by the business. By being proactive with the operation strategies a business can benefit from globalization with high sales and quality products as highlighted throughout the case studies of Boeing and Ezra. However if a business’s operation strategies are not responsive to globalization the business will fail to achieve business objectives.
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