Why Go Global? The Multinational Imperative | p. 2 |
Phases of Globalization | p. 3 |
Before 1930: Mainly Sales Offices Abroad | p. 3 |
1930 to 1980: Largely Independent Production Abroad | p. 5 |
Since 1980: Globally Networked Production and Cross-Functional Collaboration | p. 6 |
What Are the Forces Accelerating Global Production? | p. 9 |
Huge Factor Cost Differences | p. 9 |
High Growth in Emerging Markets | p. 10 |
Lower Transaction Costs | p. 10 |
Fewer Trade Barriers | p. 12 |
Goals of Global Production | p. 14 |
The Growth Impact | p. 15 |
The Cost Impact | p. 16 |
Secondary Objectives: Tapping Resources and Minimizing Risks | p. 24 |
Current Production Networks of the Three ProNet Focus Industries | p. 26 |
Automotive Industry | p. 27 |
Electrical and Electronics Industry | p. 30 |
Machine Tool Manufacturing | p. 31 |
Selection Criteria: Assessing Relevant Trends and Indicators | p. 34 |
The Relevance of Selection Criteria for Global Production Locations | p. 35 |
Interaction Between Location Parameters and Process Parameters | p. 35 |
How Varying Perspectives Affect the Importance of Different Location Parameters | p. 37 |
Markets and Market Development | p. 41 |
Market Growth - Industrialization and Transition to a Service-Based Economy | p. 42 |
Market Growth in Developing and Newly Industrialized Countries - General Trends and Regional Specifics | p. 43 |
The Elephant and the Dragon - Asia's Impact on the World Market | p. 48 |
Factor Costs - Labor, Capital, and Materials | p. 50 |
Labor Costs | p. 51 |
Capital Costs and Depreciation | p. 59 |
Cost of Materials | p. 59 |
Productivity and Economies of Scale in Manufacturing | p. 61 |
Physical Productivity and Skills | p. 61 |
Economies of Scale, Synergies and Production Technology | p. 67 |
Logistics - Direct and Indirect Costs | p. 71 |
Direct Transportation Costs | p. 71 |
Costs of Inventory - Tied Capital and Depreciation | p. 76 |
Modes of Transport - Untapped Optimization Potential | p. 76 |
External Factors - Boundary Conditions and Risks | p. 78 |
Subsidies and Taxes | p. 78 |
Customs Duties and Non-Tariff Trade Barriers | p. 80 |
Exchange Rate Effects and other External Risks | p. 84 |
Handling Migration - Transition Financials | p. 94 |
Investments | p. 94 |
Cost of Production Ramp-Up | p. 96 |
Restructuring Costs | p. 98 |
Investments Abroad: Using the Right Evaluation Techniques | p. 102 |
Basic Models | p. 104 |
The Simple Knockout Process | p. 105 |
Portfolio Analysis | p. 108 |
Strategic Location Concept | p. 110 |
Dimensions of the Analysis | p. 112 |
Narrow Versus Extended Functional Scope | p. 113 |
Tactical Versus Strategic Choice of Location | p. 113 |
Static Versus Dynamic Analysis | p. 115 |
Single-Stage Versus Multi-Stage Supply Chain | p. 115 |
Qualitative Versus Quantitative Evaluation | p. 116 |
Deterministic Versus Stochastic Perspective | p. 116 |
Simulation Versus Optimization | p. 117 |
Specific Tools and Analysis Methods | p. 118 |
Investment Analysis | p. 118 |
Decision Support Systems | p. 121 |
Sensitivity Analyses | p. 123 |
Central Guidelines and Templates | p. 124 |
Survey Results and Case Studies | p. 124 |
How Companies Prepare Investment Decisions | p. 124 |
Case Studies | p. 126 |
Appendix: Investment Analysis Techniques | p. 137 |
Network Design: Optimizing the Global Production Footprint | p. 140 |
Holistic Approach | p. 142 |
Principles for Redesign | p. 142 |
Approach for Generating a Strategic Location Concept | p. 144 |
Identifying Strategic Objectives and Urgency | p. 146 |
Modeling Existing Production | p. 154 |
Assessing the Potential of Current Locations | p. 159 |
Generating the Strategic Location Concept | p. 160 |
Implementation and Management | p. 162 |
Network Phenotypes | p. 164 |
Production Footprint Redesign: Case Studies | p. 167 |
Case Study 1: Passenger Car Gearboxes | p. 169 |
Case Study 2: Consumer Electronics | p. 182 |
Case Study 3: Structural Component for the Aviation Industry | p. 184 |
Case Study 4: Appliances Manufacturer | p. 187 |
Production Technology: Adapting to Maximize Local Advantage | p. 192 |
Reasons for Adaptation | p. 193 |
Factor Costs | p. 195 |
Skills/qualifications | p. 195 |
Unit Volume and Flexibility | p. 197 |
Customer Requirements and Local Supply | p. 199 |
External Conditions and Risks | p. 200 |
The Options for Adaptation | p. 201 |
Basic Adaptation Models | p. 201 |
Adapting to Local Requirements - Concepts and Case Examples | p. 204 |
Evaluation and Selection | p. 221 |
Creating Transparency Around the Trade-Offs | p. 222 |
Analyzing the Impact for a Specific Location | p. 225 |
Broadening the Perspective to the Entire Production Network | p. 225 |
Implementation: Ramping Up New Facilities for Top Performance | p. 236 |
Improvement Potential Revealed by the Survey | p. 237 |
Detailed Regional Planning | p. 239 |
Balancing Complexity Versus Capabilities | p. 239 |
Selecting the Right Site | p. 241 |
Going it Alone Versus Partnering | p. 245 |
HR Management | p. 247 |
Filling Skilled and Executive Positions | p. 248 |
Recruiting and Training Operational Staff | p. 256 |
Production Ramp-Up | p. 261 |
Ramp-Up Strategies | p. 261 |
Equipment Transfer Versus Purchase | p. 265 |
Management: Applying Best-Practice Structures and Processes | p. 270 |
Organization Structure | p. 271 |
Form of Organization | p. 271 |
Cost or Profit Center? | p. 276 |
The Difficulties of Internal Transfer Pricing with Cost and Profit Centers | p. 279 |
Supply Chain Management | p. 282 |
Challenges for Global Supply Chain Management | p. 283 |
Three Approaches to Setup and Optimization | p. 286 |
Logistics in Emerging Markets | p. 304 |
Production Systems | p. 313 |
Design and Pilot Phase | p. 314 |
Rollout Phase | p. 317 |
p. 320 | |
p. 321 | |
Sourcing: Extending the Footprint Reconfiguration to Suppliers | p. 324 |
Why Sourcing is so Significant in a Production Network | p. 325 |
Cost Potential | p. 326 |
Challenges | p. 326 |
Segmentation of Sourced Parts | p. 329 |
First Wave: Sourcing Simple Parts Locally | p. 330 |
Setting up a Systematic Process | p. 330 |
Establishing a Local Sourcing Organization | p. 337 |
Second Wave: Sourcing more Complex Parts | p. 340 |
Targeted Development of Local Suppliers | p. 340 |
Methodical Skill-Building for Purchasers | p. 342 |
Appendix | p. 346 |
R&D: Aligning the Interface with Production | p. 350 |
The Challenge: Finding the Right Constellation | p. 351 |
Design of the Interface with Production | p. 354 |
Option 1: Independent Networks with Minimal Collocation | p. 356 |
Option 2: Collocation of Process Development | p. 359 |
Option 3: Relocation of Application Development | p. 359 |
Option 4: Relocation of Platform Development | p. 361 |
Option 5: Full Collocation | p. 362 |
Outlook: Globalization of R&D | p. 365 |
Macroeconomic Implications: Accelerating Growth | p. 372 |
Impact on Industrializing Economies | p. 375 |
Impact on Highly Industrialized Economies | p. 375 |
Impact on Post-Industrial Economies | p. 376 |
Breakpoints Between the Phases | p. 378 |
Accelerating Industrial Development | p. 379 |
Appendix | p. 380 |
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