Podcast
Questions and Answers
Which factor is NOT driving globalisation?
Which factor is NOT driving globalisation?
- Political risks (correct)
- Markets & competition
- Logistics
- Technology
What is one advantage of globalisation mentioned in the text?
What is one advantage of globalisation mentioned in the text?
- Skills and productivity
- Access to new markets (correct)
- Political risks
- Cultural differences
What is one disadvantage of globalisation mentioned in the text?
What is one disadvantage of globalisation mentioned in the text?
- Political risks (correct)
- Skills and productivity
- Cultural differences
- Access to new markets
Which of the following is NOT an issue with globalisation mentioned in the text?
Which of the following is NOT an issue with globalisation mentioned in the text?
What is one reason why a company would replicate manufacturing around the world, according to the text?
What is one reason why a company would replicate manufacturing around the world, according to the text?
What is the term used in the text to describe the split of common components from market-specific offerings?
What is the term used in the text to describe the split of common components from market-specific offerings?
What is the cost base comparison mentioned in the text?
What is the cost base comparison mentioned in the text?
What is one factor mentioned in the text that complicates management due to cultural differences?
What is one factor mentioned in the text that complicates management due to cultural differences?
What is one factor mentioned in the text that may be compromised in local infrastructure due to globalisation?
What is one factor mentioned in the text that may be compromised in local infrastructure due to globalisation?
What is one example of a logistics specialist mentioned in the text?
What is one example of a logistics specialist mentioned in the text?
Which of the following is a characteristic of the automotive industry?
Which of the following is a characteristic of the automotive industry?
What is the difference between outsourcing and offshoring?
What is the difference between outsourcing and offshoring?
What factors can affect location decisions?
What factors can affect location decisions?
What is a greenfield development?
What is a greenfield development?
What is the main advantage of the factor rating method for evaluation?
What is the main advantage of the factor rating method for evaluation?
What is the main disadvantage of the factor rating method for evaluation?
What is the main disadvantage of the factor rating method for evaluation?
What is the main advantage of the load-distance model for evaluation?
What is the main advantage of the load-distance model for evaluation?
What is the main disadvantage of the load-distance model for evaluation?
What is the main disadvantage of the load-distance model for evaluation?
What is a challenge in locating facilities?
What is a challenge in locating facilities?
What is a characteristic of the aerospace industry?
What is a characteristic of the aerospace industry?
Which of the following is NOT a driver of globalisation mentioned in the text?
Which of the following is NOT a driver of globalisation mentioned in the text?
What is one advantage of globalisation mentioned in the text?
What is one advantage of globalisation mentioned in the text?
What is one disadvantage of globalisation mentioned in the text?
What is one disadvantage of globalisation mentioned in the text?
What is one issue mentioned in the text that complicates management due to cultural differences?
What is one issue mentioned in the text that complicates management due to cultural differences?
What is one factor mentioned in the text that may be compromised in local infrastructure due to globalisation?
What is one factor mentioned in the text that may be compromised in local infrastructure due to globalisation?
What is the term used in the text to describe the split of common components from market-specific offerings?
What is the term used in the text to describe the split of common components from market-specific offerings?
What is one disadvantage of the load-distance model for evaluation mentioned in the text?
What is one disadvantage of the load-distance model for evaluation mentioned in the text?
What is one advantage of the factor rating method for evaluation mentioned in the text?
What is one advantage of the factor rating method for evaluation mentioned in the text?
What is one factor mentioned in the text that complicates management due to cultural differences?
What is one factor mentioned in the text that complicates management due to cultural differences?
What is the main advantage of the load-distance model for evaluation mentioned in the text?
What is the main advantage of the load-distance model for evaluation mentioned in the text?
Which of the following industries primarily focuses on manufacturing in the United States?
Which of the following industries primarily focuses on manufacturing in the United States?
Which of the following industries primarily focuses on manufacturing in Europe and the United States?
Which of the following industries primarily focuses on manufacturing in Europe and the United States?
Which of the following statements about outsourcing is true?
Which of the following statements about outsourcing is true?
Which of the following statements about offshoring is true?
Which of the following statements about offshoring is true?
Which of the following factors can affect location decisions?
Which of the following factors can affect location decisions?
What is the main advantage of the factor rating method for evaluation?
What is the main advantage of the factor rating method for evaluation?
What is the main disadvantage of the load-distance model for evaluation?
What is the main disadvantage of the load-distance model for evaluation?
Which of the following is NOT a characteristic of the aerospace industry?
Which of the following is NOT a characteristic of the aerospace industry?
What is a greenfield development?
What is a greenfield development?
What is one reason why a company would replicate manufacturing around the world?
What is one reason why a company would replicate manufacturing around the world?
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Study Notes
Globalisation and Factory Location in Manufacturing Management
- Factors driving globalisation include technology (communications, manufacturing, design) and logistics (bulk shipping, logistics specialists).
- Other drivers of globalisation are markets and competition (World Trade Organisation, NAFTA, EU, TPT) and cost base (e.g. China vs. EU with UK at $19).
- Advantages of globalisation include access to new markets, reduced stigma of imported goods, side-stepping trade barriers, utilizing reduced labor rates, and supporting just-in-time manufacturing.
- Disadvantages of globalisation include political risks, restrictions on operations by governments, exposure of intellectual property, complications due to cultural differences, lower skills and productivity, and compromised local infrastructure.
- Language barriers and cultural differences pose challenges in globalisation, such as misunderstandings and differences in communication styles.
- The economics of globalisation involve addressing external costs (tariffs, certification), accepting lower returns to address market risk, and using decoupling points to split common components from market-specific offerings.
- Different industries have different approaches to global manufacturing, such as VAG, Mercedes, and BMW selling the same products everywhere but manufacturing them in Europe and the USA, while Toyota, Nissan, and Honda manufacture market-specific products near the market.
- Boeing and Airbus in the aerospace industry have globally made components but final product assembly in the US and EU/US respectively.
- Facility location is important for long-term investment, the inability to easily move due to embedded equipment, and the reputational impact of closure.
- Outsourcing involves working with overseas partners, while offshoring involves developing own operations in an overseas territory.
- The optimum location for a new facility balances spatially variable costs, revenue potential, and service level responsiveness to customers.
- Factors affecting location decisions include labor costs, labor skills, suitability of the site, land costs, image of the location, energy costs, convenience of the site, transportation costs, and community factors.
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