Omar Salgado Intenational Manufacturing

Abstract:

Plants along an International Manufacturing Network play specific roles that enables MNE’s to convey their products and services to one or several target markets with certain affinity that produces a particular degree of success; however the role may loose coherence if it is not maintained by paying attention to internal and external factors. This paper discusses the coherence of a plant role in the automotive sector and describes network, corporate, market and location factors as major drivers of change.

Introduction:

Getting the most from foreign subsidiaries is more than just a location decision exercise where the market to be target is supplied from the best suitable location in terms of distance, manufacturing cost and availability of knowledge. This pretty much snapshot exercise lacks of an inherent time dimension to make it not just coherent with reality, but also applicable in operational terms. The plants role assignation, development and current rational is therefore an important activity to be developed, even if most companies’ remembrances are explained via important milestones from which managers decided to change their firms’ directions; the reality is that companies performance is harvested from daily operations. The present paper intends to raise Manufacturing Network issues as on-and-off exercises where four group of factors impact on plant role coherent with the reality. The first factor is Market(s) to which a company conveys its products and services and which may or may not have peculiarities with company’s home market. The second group of factors is Location with specific inherent and created advantages where products are manufactured and from which companies decide to supply target markets. The third group of factors is Corporate configuration and coordination which not only regulate and bounder activities across business units but also enclose the entrepreneurial activity of managers; and the fourth and last group of factors is Network that empowers the corporation via resources sourcing and standardization of products/technologies, business practices, and knowledge. This paper is presented in three main sections; first there is an introduction to the paper’s problematic which includes: a short but comprehensive review of the development of the automotive industry in Mexico, the technological and market trends of the industry worldwide, and the case study from which paper’s data is and from paper’s assumptions 3/49 emerged. The second section gives a historical review of the theories converging to plant role coherence, the introduction to the research question, the presentation of the Plant Roles coherence model and research design and methodology. The third and last section includes the evidences from the model, the theoretical discussion of the evidences and its implications on the actual theory. The paper ends by proposing the future research on this field.

Type: Paper

Author: Salgado, Omar; Shi, Yongjiang. (2006)

Repository: Production & Operations Management Society