Every company today is competing in a multi-polar world, and succeeding in this environment needs a new approach to global operations. Global operations widen into tax optimization and geopolitical threat improvement, in addition to global ability administration. This paper is a review of the global operations survey.
The Lay of the Land
A global survey of 300 senior company managers was conducted by Accenture in the year 2006 and 2007. It had been supported by interviews, with a number of global providing chain professionals who were to review the lay of the land in global operations, and the traits of global operations mastery. More than 85% of the business managers examined observed global operations as significant to their business plans (Deloitte Development LLC, 2011).
This percentage is likely to increase in the coming few years. The pace of supply and demand globalization is swiftly rising. In the process of discovering the traits of global operations mastery during the research, some of the respondents were asked to review their potentials across the features that Accenture’s knowledge shows to have a significant contact on the effectiveness of global operations. The participants were recommended three levels to determine how flavorsome they were doing in executing and handling each of these potentials.
Only six percent qualified at the right level on all capabilities. Fifteen percent of the participants compromised that they were performing under the target level of all capabilities. They are evenly distributed across industries while the first category gives attention mainly to chemicals, pharmaceuticals and retail. The leaders and laggards re spread within the profits range. The first category is known as the leaders while the second category is referred to as the laggards. The leaders are active compared to the laggards whose center of attention is optimizing their manufacturing, distribution, research and development set-up on global foundation (Deloitte Development LLC, 2011).
Leaders focus on investing in new plants and equipment and more intent on using mergers and acquisition. The leaders are global sourcing and manufacturing, and the number of or percentage of them sourcing more than half of their supplies outside their home markets is expected to increase in the coming years. In the contrary, only sixteen percent of the laggards sourced half of their supply from outside their home market.
The leaders boost their use of global sourcing and manufacturing, and they also seem to be more prepared to raise the percentage of the revenue generated outside their home markets. Forty percent of leaders produce more than thirty five percent of their revenue outside their home markets. The leaders seem to be more successful in putting into operation the procedures that lead to higher points of innovation and speed to market.
This is applicable to the global networks for R&D. Three quarters of the leaders compare with one quarter of the laggards. At least three quarters of the leaders show achievements in this area compared to the laggards. There are five principles that the leaders in the survey apparently know, and they are actively making developments and coming up with key potentials to permit them to focus on the growth chances that are offered by the globalization process. Most likely, the laggards have a number of negative impacts because of a badly designed global operation plan.
Mastering Global Operations
Background
These are the emerging marketing plans which are effective for each growing market. They protect logical property in the growing markets. Others are the global supplies which are the fixed connections with customers and suppliers to acquire the demand and supply visibility. There should be a flexible supply chain network that will attain immediate objectives on cost, quality and time to market. They further help, in developing strategies, to identify and manage the supply chain risk.
Key Capabilities for Global Operations Mastery in Supporting Military Functions
Global Sourcing, Outsourcing, and Manufacturing
The numbers of leaders who spring more than half of their own supplies from outside their home markets is anticipated to increase in the coming 3 years. Contrary to this, sixteen percent of the laggards who produced more than half of their production or supply from their home market is expected to increase to 32% in a period of three years (Cudahy et al., 2008). Only 22% of the laggards is expected to be manufactured all over the world, and it is expected to grow to 45% in three years, but this is left far behind by the leaders.
Growth Outside of Home Markets
Leaders seem to be ready to raise the percentage of the revenue generated outside their home markets (Keeter, 2001). Forty percent of these leaders generate more than thirty five percent of their income from outside their home markets. A good number of leaders generate income from their outside markets exceeding 35 percent. This figure has risen to sixty percent in duration of three years. This is a difference of twenty six and thirty five percent respectively.
Innovation and Speed to Market
The leaders in the global operations seem to be more victorious in employing practices that lead to higher points of innovation and speed to market. It is usually applicable with the global networks for R&D. Three-quarter of the leaders account tough achievement in this area when compared to one quarter of the laggards. It is also relevant to achievement with strong mutual processes between domestic departments and across geographies, confirmed by 75 percent of leaders and just a third of laggards (Cudahy et al., 2008). It also makes sense develop reliable and qualified suppliers, and transacting partners which is seventy five percent of leaders compared to the laggards.
Business Resilience in Support of Military Logistics Functions
Laggards most likely have experienced a number of negative impacts due to their poor designed and operated global operation plans. Almost half of their aspects diminish in boundaries because of accelerated shipping costs or other excessive measure, to satisfy the consumer needs. In the military, twenty seven percent go through poor customer services, as a result, to running out of stock and other metrics (Keeter, 2001). Fifty four percent of the laggards blame poor global operations for the increased price of goods sold when compared to the forty percent of the leaders. The laggards are likely going to rely on the high cost plans than the leaders so as to lessen supply chain risk.
The integrated chain management is defined as the process or approach to acquiring, producing and delivering goods or services to consumers. This has been made possible by the use of technology like the electronic catalogs which post products information on the internet. This advancement in technology and knowledge survives to influence best business practices into the military operations and perform the Revolution in Military Logistics (Keeter, 2001). The Industry has discovered that, in order to have achievement of these most excellent practices, it must have top leadership’s dedication, support, and participation. The military cannot achieve full support with the chattels and transportation that are predictable.
Five Guiding Principles
Focusing on Value, not Assets
In the world, we are living today high performance of any company depends on the company’s ability to engineer its operations. This contributes to financial performance and marketable strategy, goal and whether that goal is customers’ needs, product modernism and operational fineness. In this global world, companies should change their chain structure and concentrate on their product value instead of the assets. By putting the focus away from managing and monitoring assets to running the development that guarantees quality service, easy market access and cost constraints. In a rigid chain, infrastructure, many companies can run far more successful and resourceful manufacturing.
Market forces have made it possible for these companies to concentrate on administering value that is cost, quality and service rather than scheming assets and operations. This value and not asset advancement is a significant plan as companies optimize their supply chains to contribute to customers’ eccentricity, product modernization and cost competence. Matching the price of products sold with suppleness and accessibility objectives entails cautious representation of trade-offs. When working with companies that have highly efficient global operations, it is known that they naturally favor globalizing the whole price chain of a product to a certain extent than globalizing purposes such as procurement, logistics, and manufacturing.
Designing the Right Support Organization
Companies, which are highly efficient, support procurement, logistics and industrialization. This enables them to manage a collection of local, regional, and worldwide goods with providing chains optimized for each product procession or place of business. Since companies must be able to judge changes in the market and adjust, a worldwide operations strategy should be put into operation in small, convenient pieces.
Aligning and Streamlining Decision-making Authorities
When a company is implementing its global operations strategy, it is crucial to attain responsibility and stability between local and worldwide objectives. There are a number of ways which leaders handle the required arrangement. One of these approaches is to have a one person responsible for worldwide operations to take action as the overall completion owner in the unavoidable differences among local, regional and global alarms. It is necessary to have a constructive pressure and steadiness between community, regions, and local markets with development and standard decisions made at the company’s level and decisions. Surely, Accenture’s survey proved that a company’s chief administrative model involves the simplicity of put into operation the global capabilities.
Optimizing Talent Deployment
It is crucial for a company to have people administrating a task in each local area. They should be knowledgeable directors who have strong local market acquaintance, as well as, healthy relationships. This often requires locating the company’s best talent in the regions and not headquarters that run counteract to the administration belief in most companies. With this approach, the companies indicate to local markets what they desire that is to start strong relationships there. It has been found out that many fast growing regions that are becoming rather large in income and return; principal organizations are coming up with strong regional administrative teams and authority representations that are starting up with top administration brought in to the region to sustain the expansion of local talent over time.
Building Adaptability and Risk Management Capabilities
Globalizing brings in networks and practice promising markets launches far more prepared risk than processes controlled within local markets. Natural disasters, which cannot be prevented, can take a disturbing toll of deaths where thousands of lives can be lost. Current subjects adjacent reminds of toys and other products made in China, which are just one case of unforeseen instability, which is articulated in terms of danger that can seriously spoil a Company or even a whole industry section, and with eminent problems brings with them increased cost and long delays. Frequently, when a serious problem is noticed, an extensive supply procession shows that four to six weeks’ worth of delivery is already in transit, and these means that it can take an extra four to six weeks earlier than value accepted product reaches its target.
Risks
A company can review its assorted risks and then classify which areas are of paramount concern. For example, for each most prominent risk, the company would allocate a charge to each of six risk factors. The value would be weighted according to the research done that would give precise weightings for each business or risk type. The company would end up with numerals that would specify how significant the risk is, so that it could assign its possessions properly.
Cost Cutting and Pricing Pressures
These are some of the greatest risks businesses encounter. Sometime they are forced to cut the prices of their products to make them affordable to their customers. This is a risk since it might lead to low profit gain, and this will affect the growth of the company. Pricing of goods can be a pressure since one has to find out how the other companies offering the same products are selling their goods. Some may force one to sell the products in a remarkably low price to make sure that he/she does not lose customers due to over pricing (Accenture.com, n. d.). One should ensure that the decisions they make in pricing will favor both the customer and business to avoid incurring loss or over charging the customers.
Investigations on Foreign Grounds
This is another risk. A foreign ground is a strange or new ground. People from diverse parts of the world have likes that are dissimilar. The main risk is coming up with a business in a strange place. One is not sure whether he/she will get or satisfy the customers in that area. One should find out the basic need that needs to be satisfied to avoid disappointments. Coming up with a company or a business is a risk because no one is ever sure whether it is going to work or not but it is worth taking.
In conclusion, the global military operations survey indicates that leaders seem to be more successful in putting into operation the procedures that lead to higher points of innovation and speed to market. The numbers of leaders who spring more than half of their own supplies from outside their home markets is anticipated to boost in the coming 3 years. This is due to efficient application of the five guiding principles and maximization of key strengths.
References
Accenture.com (n. d.). Risky business. Web.
Cudahy, G., Narendra, M. & Christophe, C. (2008). Accenture: mastering global operations to enable high performance. Framington: Peerless Media. Web.
Deloitte Development LLC. (2011). Payments outlook 2011: assessing the laying of the land. New York: Deloitte Publishers. Web.
Keeter, H. (2001). Transformation office calls for cultural change: possible acquisition shifts. London: Sage. Web.