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Impact of technology on production
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Introduction The trend in the global manufacturing industry focuses its attention on bringing manufacturing back to the United States, known as reshoring. The major cause for this decision is mainly due to the rising labor cost that occurs in places like Vietnam, China and other outsourcing countries. As NPR News stated, “… at least 200 companies have already returned, and there's been a dramatic jump recently in the number of companies saying they're seriously thinking about [reshoring] .” According to the Wall Street Journal, the increase in labor cost was made by the government to boost the domestic consumption and economy without relying too much on export . However, with the increase in wages, those countries are losing its competitiveness in the manufacturing industry. Multinational companies, especially from the United States, realized that the strategy of producing goods by outsourcing has become ineffective. To gain a competitive advantage and increasing market share, a company must understand and analyze the strategy they choose in managing their total system. Reducing cost by moving production to a lower cost country is proving to be one of the many factors that contribute to the success of a company. There is no guarantee that a successful strategy will always work in the future or in the face of change. A strategy will only work for a certain period of time until variation in the global macro environment comes into play, such as the rising of labor cost. As Guy Morgan, the Managing Director and Global Operations Advisory Group Lead says, “those having a more macro view will do best. Additionally, those recognizing the needs of the global customers will do best, finally, those having the agility to move quickly with v... ... middle of paper ... .../22/265080779/as-overseas-costs-rise-more-u-s-companies-are-reshoring http://online.wsj.com/news/articles/SB10001424052748703849204576302972415758878 http://www.mbtmag.com/blogs/2014/02/reshoring-key-strategy-facing-present-and-future-manufacturers Heizer, J., & Render, B. (2011). Operation Management (10th Edition ed.). New Jersey: Pearson Education. http://www.cnn.com/CNN/Programs/lou.dobbs.tonight/popups/exporting.america/content.html Goldratt, E. M., & Cox, J. (2004). The Goal: A process of Ongoing Improvement (Third Edition ed.). North River Press. http://www.2ndbn5thmar.com/lean/Notes%20on%20The%20Goal.pdf https://www.goldratt.com/pdfs/CombiningLSSandTOC.pdf http://www.thwink.org/sustain/glossary/LeveragePoint.htm http://yourbusiness.azcentral.com/limitations-theory-constraints-16352.html https://www.goldratt.com/pdfs/CombiningLSSandTOC.pdf
Operations management is essential for the survival and success of any organization. According to Heizer & Render (2011), operations management (OM) is the set of activities that creates value in the form of goods and services by transforming inputs into outputs. Operations managers today contend with competition, globalization, inflation, consumer demand, and consistent change in technology. Managers must focus on the efficiency and effectiveness of processes such as cost, dependability, distribution, flexibility, and speed. The intent of this paper is to discuss the processes and operations management of the Kroger Company.
The Goal: A Process of Ongoing Improvement by Dr. Eli Goldratt and Jeff Cox is a fictitious novel based on very real business practices. Goldratt and Cox’s writing focuses on a non-traditional approach to introducing Goldratt’s own Theory of Constraints. The plot centers around Alex Rogo and his journey to find solutions to save both his manufacturing plant and marriage.
Outsourcing is a complicated and a multifaceted subject that involves a “business[’s] purchase of parts or labor from another company rather than maintaining a sufficient enough number of its own employees to do the same work in the country where the company is already based” ("Outsourcing"). The first practice of outsourcing was in medieval times when “nation-states called in soldiers-for-hire to help their own military forces during ongoing conflicts” ("Outsourcing"). Many think of outsourcing as a one way trade of production facilities moving outside of a companies locale but in actuality it is a two way trade that also involves companies from other areas moving their factories to local areas where conditions are beneficial for the specific business. Outsourcing has evolved but the main idea has remained the same. The recent increase in outsourcing “was initiated by Wall Street pressures on corporations . . . . for increased profits . . . in the production of goods and services marketed in the U.S."(Roberts).
Coulter, M., Decenzo, D. A., & Robbins, S. P. (2013). Fundamentals of Management (8th ed.). Upper Saddle River, New Jersey: Prentice Hall.
Companies are relocated some or all of their workforce to other countries where labor and material are cheaper. This has been bad for America, but the American companies are using it as a way of making more money by reducing their overhead. For America it is bad, because of the loss of jobs for people and loss of taxes paid by the company to the government.
Carpenter, M., Bauer, T., Erodogan, B., & Short, J. (2013). Principles of management. (2nd ed.).
Robbins, S. P., Decenzo, D. A., & Coulter. M. (2013). Fundamentals of Management (8th ed.). Upper Saddle River, NJ: Pearson.
Large corporations seeking the extra dollar to pocket are willing to spend whatever it takes to reduce the cost of production and increase profit margins. Doing whatever it takes in some instances can help men moving operations overseas to developing countries who are glad to be working. These developing countries unemployment rates are extremely high, so any job that pays is great to have. Americans lose jobs to foreign workers because the American economy is one of the largest in the world and its citizens enjoy great standards of living, when juxtaposed with a city of the same size in Taiwan. Labor costs play a huge and crucial role in corporations, which in turn pay the profits to the corporate giants who run, manage, and own the businesses.
Robbins, S.P., DeCenzo, D.A., & Coulter, M. (2013). Fundamentals of management (8th ed.). Upper Saddle River, NJ: Prentice Hall.
Robbins, S., Decenzo, D., & Coulter, M. (2013). Fundamentals of management. Upper Saddle River, NJ: Pearson Education, Inc.
Schonberger, R.J. and E.M. Knod Jr. Operations Management: Continuous Improvement. Richard D. Irwin, 1994, p. 44. 16. Selto, F.H. and D.W. Jasinski. "
In today's business environment, there is sustained pressure for companies to maximize productivity in order to be competitive in the marketplace. Many businesses are moving a variety of activities, such as manufacturing and product development, to countries with low labour costs. They are also opening up sales channels in many new markets. The resulting global organizations need to structure themselves, so that they can effectively manage operations across numerous locations. This paper looks at how the organizational structure of a global company influences decision-making at the regional level, and how this can affect the business performance. This paper will:
University of Phoenix(Ed.).(2003) Operations management for competitive advantage[University of Phoenix custom edition e-text]. New York: McGraw-Hill. Retrieved February 01, 2005, from university of phoenix, Resource, MGT554- operations management website: https://mycampus.phoenix.edu/secure/resource/resource.asp
Currently in the global environment, there is a strong sense of competition that must be achieved through better performance, almost all firms are competing in international markets due to the reduction in barriers for capital and tariffs. With the new changes in both communication and technology, the consequences faced are that production processes are no longer within national boundaries but spread across (Debrah & Smith, 2002).