Global Production Network

The 21st century has seen several companies cross international borders to look for new markets to conduct their business and increase shareholders’ return. The process was fuelled by opening of borders and advancement in transport mode and technology in the 21st century. The situation has complicated the attempts to fully understand the process of global production. However, the research and different literatures in the recent past have given customers and scholar a good read on forms of labour which go into producing the product or service, and how this work is globally distributed (Coe, Dicken and Hess 2008, p.274). The development has made customers to strongly know what they want and what they consume. Therefore, this essay will analyze the Global Production Network (GPN) of coffee and discuss who benefits most from the structure of this GPN. In the analysis, the essay will focus on three different aspects. First, the paper will analyze various forms of labour that go into creating the product and how is this work globally distributed. The essay will also analyze how the value is captured at each stage of production distributed along the network. Lastly, the essay will focus on the institutional arrangements that explain the structure of this GPN.

“Global sourcing is defined as sourcing the technology, materials and components from sites and supplies located throughout the world. It also means the integration and coordination of requirements across worldwide business units” (Monczka & Trent, 1991, pp2-7).

Globalisation is the internationalization of trade and often forces businesses to adopt new strategies for operations to suit different cultures and economies. The often easily saturated domestic market has triggered many large

By grafting its system of custom direct sales onto the Internet infrastructure, Dell has transformed these activities, creating an innovative and efficient procurement, production, and distribution network. The innovative advance made by Dell in deploying Internet communication as the foundation of its production network, is a process innovation. Although to some extent, the Internet has enabled Dell to create a new product -- a PC custom-configured through Internet communication -- it is the process of organizing flows of materials and information within its network, from customer order to procurement, production and delivery, by means of Internet communication, that defines the innovation at the Firm. The case supports this notion by stating “While most other PCs were sold preconfigured and pre-assembled in retail stores, Dell offered superior customer choice in system configuration at a deeply discounted price, due to the cost-savings associated with cutting out the retail middleman. Additionally, an important side-benefit of the Internet-based direct sales model was that it generated a wealth of market data the company used to efficiently forecast demand trends and carry out effective segmentation strategies. This data drove the company’s product development efforts and allowed Dell to profit from information on the value drivers in each of its key customer

Dell developed its internal business process by creating production cells that start assembly at the point of order. It also established an internal information system to make the details of the products under production electronically available to all parties within the chain. To manage the supply of computer parts, Dell maintained close relationships with their suppliers and logistics providers to make their vendors manage the

The global manufacture chain is helpful to reduce the cost because the apparel production is highly labour-intensive (Z02). For example, a jacket was produced among many countries to make a good use of the price advantages of different areas.

The process of globalization has numerous significant effects on countries, organizations, and individuals. These effects can be observed in the quality of products, in their prices, but also in their availability. Because of globalization, numerous companies prefer to expand their business on international level. Some of them outsource some of their processes and activities to cheaper destinations that allow them to reduce their investments.

Participation of developing economies in globalization of the automotive industry was enhanced by innovations in telecommunication, technology development, and transportation. These elements made it possible for the industry to fragment its production processes and creation of smaller assembling plants that were located in different regions of the world. This segmentation of production processes created multiple global production networks and expanded the global market making many developing countries reap the benefits of globalizing the automotive industry (Maxcy 108).

Dell Computer Corporation was founded in 1984 by Michael Dell. From the early 1990s until the mid-2000s, Dell was ranked as a PC market leader relying on their distinctive marketing pattern “Direct Model” which undertook direct communication with customers and provided customized products. Recently, the PC industry is facing inconceivable worldwide competition, and Dell is gradually losing their competitive advantages by using its direct model in critical business segments. The company is facing shrinkage of growth, increasing competition, declining quality of customer service, and limitation of expansion. These issues have an enormous impact on Dell’s position as a technological giant in the PC industry.

What is the right supply chain for your product ? is the question asked by Marshall L. Fisher in his article titled, “What is the Right Supply Chain for Your Product ?” published in March-April 1997 issue of the Harvard Business Review. Author raises the question stating the fact that new ideas and technology implemented haven’t lead to improved performance. Performance has not become better but rather in at least some cases, has worsened due to costs rocketing to unprecedented levels.

Third, Dell has a rapid-response system for linking all suppliers, workers, managers, and customers to Dell’s value chain. This interactive real time communication system is employed to order parts, manufacture and outsource computer modules, and coordinate assembly and distribution of products to customers. Managers employ this system for all human resource functions, workers and suppliers for all coordination sequencing and quality control processes,

The world offers significant business opportunities for every company, however, opportunities are accompanied by significant challenges for managers. Managing global operations across diverse cultures and markets represents a big challenge and opportunity for companies. To compete in the global market and be successful, companies must learn the strategies, policies, norms and technology necessary to conduct international business. The opportunities for global expansion are numerous, and attaining success is a matter of developing the right strategy to win local markets and its consumers.

Globalization is “the integration of economies around the world through the movement of goods, services and capital across borders” and is a dynamic process through which companies, corporations and organizations leverage their strengths, magnify their reach, and decrease costs by outsourcing multiple business processes (IMF Staff, 2008). The globalization of Starbucks’ supply chain played a crucial role in attaining organizational success, having a significant impact on its business operations. This report aims to analyze the challenges that globalization presents in a constantly evolving market, and evaluate the solutions that Starbucks has implemented to manage these challenges.

Global companies source their raw materials and outsource manufacturing of their products to many countries to take advantage of lower costs or high quality production, and/or lower costs of

As trade increases hyper-competition grows forcing organizations to go global. By a company going global it requires them to rethink strategy and reform (Ananthram and Pearson, 2008). Global organizational structure is the way a company aims to merge local preferences with global strategy. The definition of global strategy is “strategic choices that have the characteristics of being globally uniform or integrated,” (Yip et al., 1997) such as standardization of products, uniform marketing, and competitive moves, but all globally (Townsend et al., 2004; Zou and Cavusgil, 2002; Bayraktar and Ndubisi, 2014). Global strategic strategy is a way to adjust to globalization. Globalization is “the economic and social process by which economies and communities grow inextricably interdependent “(Jhirad et al., 2009). The recent financial crisis (Das, 2010), large amount of poverty, and climate change are all problems that show how the world is globally connected because all countries impact each other (Jhirad et al., 2009).