Global Production (eBook)

Preface 6
Table of Contents 8
1 Why Go Global? The Multinational Imperative 14
Summary 14
Key questions, Chapter 1 15
1.1 Phases of Globalization 15
1.2 What Are the Forces Accelerating Global Production? 21
1.3 Goals of Global Production 26
China and India – Attractive Markets if Approached Right 29
The Grundig Example 34
1.4 Current Production Networks of the Three ProNet Focus Industries 38
Further reading 45
2 Selection Criteria: Assessing Relevant Trends and Indicators 46
Summary 46
Key questions, Chapter 2 47
2.1 The Relevance of Selection Criteria for Global Production Locations 47
2.2 Markets and Market Development 53
2.3 Factor Costs – Labor, Capital, and Materials 62
2.4 Productivity and Economies of Scale in Manufacturing 73
2.5 Logistics – Direct and Indirect Costs 83
2.6 External Factors – Boundary Conditions and Risks 90
External Factors – How the Mercedes Car Group ( MCG) Selects Production Locations 93
Radical Change in the Textile Industry: The Consequences of Hampering Globalization 95
Currency Risks and Competitive Strategy – Airbus Uses Financial Derivatives to Hedge Against Exchange Rate Fluctuations 98
2.7 Handling Migration – Transition Financials 106
Suspicion of Product Piracy: GM Sues SAIC Subsidiary Chery 107
Further reading 113
3 Investments Abroad: Using the Right Evaluation Techniques 114
Summary 114
Key questions, Chapter 3 115
3.1 Basic Models 116
3.2 Dimensions of the Analysis 124
3.3 Specific Tools and Analysis Methods 130
3.4 Survey Results and Case Studies 136
Building a Global Business in Ten Years – Investment Decisions at Deutsche Post World Net 144
Appendix: Investment Analysis Techniques 149
Further reading 149
4 Network Design: Optimizing the Global Production Footprint 152
Summary 152
Key questions, Chapter 4 153
4.1 Holistic Approach 154
4.2 Network Phenotypes 176
4.3 Production Footprint Redesign: Case Studies 179
Further reading 202
5 Production Technology: Adapting to Maximize Local Advantage 203
Summary 203
Key questions, Chapter 5 204
5.1 Reasons for Adaptation 204
5.2 The Options for Adaptation 212
Aligning Technology with Local Conditions: Weighing Equipment Manufacturing at Sartorius in China, Germany, Malaysia, and the US 217
Hero Honda as an Example of Automation in Low- Cost Countries: as Little as Possible, as Much as Necessary 220
Alternative Production Technology: Industry- and Location- Specific Solutions for Balancing Rotors 223
Automation in High-Cost Countries: Integrated Optimization of Product, Machinery and Sequence at SGF 230
5.3 Evaluation and Selection 232
Using Alternative Manufacturing Methods: Armature Shafts for Small Motors 237
Minimizing One-Off Expenditure: An Automotive Supplier Uses Older Machinery and Plant Concepts 244
Further reading 246
6 Implementation: Ramping Up New Facilities for Top Performance 247
Summary 247
Key questions, Chapter 6 248
6.1 Improvement Potential Revealed by the Survey 248
6.2 Detailed Regional Planning 250
Pulling Out All the Stops – Too Far: A Mechanical Engineering Company Overreaches Itself in Asia 251
Bargaining Power: Raising the Stakes in Back- End Chip Production 254
Accelerating Location Planning: Best- Practice Site Selection in South Korea 255
6.3 HR Management 258
Choose your Friends Carefully: How an SME was Exploited by its Joint Venture Partner 258
Revving Up for Excellence: Global Executive Staffing at an International Automotive Supplier 263
Fueling for Performance in China: Bosch Wuxi Uses Cross- Site Know- How Transfer to Ramp Up for Sophisticated Injection Valve Production 268
Staffing for Success in Developing Countries: Hero Honda Achieves High Productivity via Low Attrition 270
Overdrive on all Cylinders: A European Hydraulics Manufacturer Fails to Differentiate its Skill- Building 271
6.4 Production Ramp-Up 272
Navigating a Maze of Requirements: Implications for Bosch When it Goes Overseas 279
Further reading 280
7 Management: Applying Best- Practice Structures and Processes 281
Summary 281
Key questions, Chapter 7 282
7.1 Organization Structure 282
The Evolution of Organization Structures: A Retrospective 283
Boosting Competitiveness and Margins: SBU Pioneers 288
7.2 Supply Chain Management 293
Economies of Scale in Logistics: Advantages of Company- Wide Integration 296
Managing Complexity: Global Production Planning at Mercedes- Benz 309
Managing Global Production: Hella’s Network 311
Case Study: Pharmaceutical Distribution in India 317
7.3 Production Systems 324
Global Lead Factory: Trumpf Transfers its Lean Production Process from its Lead Factory to all its Branch Factories 329
Further reading 331
Appendix A 331
Appendix B 332
8 Sourcing: Extending the Footprint Reconfiguration to Suppliers 334
Summary 334
Key questions, Chapter 8 335
8.1 Why Sourcing is so Significant in a Production Network 335
Definition of Local Versus Global Sourcing 338
8.2 Segmentation of Sourced Parts 339
8.3 First Wave: Sourcing Simple Parts Locally 340
Producing Shower Heads in Eastern Europe: How to Segment Sourced Parts Strategically 341
Suppliers of Turned Parts in Eastern Europe: Preliminary Screening Based on Simple Criteria 342
Mechanical Engineering Component Supplier in India: New Supplier Day 343
Sourcing an Electric Motor Housing from Slovakia: Selecting and Building Local Suppliers 348
Example: Establishing a Purchasing Office in China 349
8.4 Second Wave: Sourcing more Complex Parts 350
Sourcing of Injection-Molded Parts in China: Developing Suppliers Using Quality Management Support 351
Globalization in the Automotive Industry: BMW 353
Appendix 356
Example: Determining the Performance Parameter for an Automotive Wiring Harness 357
Further reading 358
9 R& D: Aligning the Interface with Production
Summary 359
Key questions, Chapter 9 360
9.1 The Challenge: Finding the Right Constellation 360
9.2 Design of the Interface with Production 363
Transplants of Japanese Automotive OEMs in Europe, with Japanese Lead Factories 367
Distributed Application Development Hand- in- Hand with the Customer: Flextronics Builds on a Standardized Approach 370
Flex-Fuel Vehicles for Brazil: Volkswagen and Bosch Achieve a Breakthrough Innovation Due to Local Presence2 372
9.3 Outlook: Globalization of R& D
Trumpf Develops an Innovative Laser Cutter for the US Market Using a Unique Collaboration of Local Platforms 374
ABB Research Locations in China: Sophisticated Solutions in Cooperation with Local Experts 375
Automotive Supplier with Production Plant in Spain: Transforming an Extended Workbench into a Center of Competence 375
Further reading 380
10 Macroeconomic Implications: Accelerating Growth 381
10.1 Impact on Industrializing Economies 384
10.2 Impact on Highly Industrialized Economies 384
10.3 Impact on Post-Industrial Economies 385
10.4 Breakpoints Between the Phases 387
10.5 Accelerating Industrial Development 388
Appendix 389
The ProNet Initiative and Methodology 389
List of Figures 391
List of Tables 396
Bibliography 397
Keyword Index 402
About the Editors and Authors 406
Acknowledgments 410