9783540716525

What is the best configuration for a global production network? What are the different dynamics in low-cost vs. high-cost countries? Getting the answers right is key to building a competitive and efficient global production network. Centers of economic activity are shifting profoundly, globally and even regionally. Production is shifting even more dramatically than the economy as a whole, making it critical for decision makers to know what criteria matter most and how to make the right decisions on where to invest. Regardless of the industry involved, an optimized global footprint can translate to a competitive advantage. A comprehensive redesign typically yields a 20 to 40 percent reduction in manufacturing costs. Global production and purchasing operations create a platform for entry into new markets. Planning and implementing a sustainable globalization strategy, however, takes considerable effort; this book is there to help in that task.The wealth of experience and analysis featured in Global Production is the result of an extensive survey among leading manufacturing companies as well as countless discussions with executives who have personally wrestled with the issues of "going global." In breadth and depth, the insights it offers surpass what a manager or most individual companies could acquire on their own.

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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Global Production

3540716521

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