10-09-2013, 01:15 PM
International manufacturing networks—to develop global competitive capabilities
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Abstract
This paper seeks to extend existing manufacturing system concepts and develop new structured knowledge about
international manufacturing networks by analysing the networks, classifying the configurations and identifying the
capabilities. The design and operation of international manufacturing networks is an increasingly important issue for
transnational corporations faced with rapid changes in global market opportunity, competition and new managerial
mechanisms. Four international manufacturing networks in mechanical and process industries are analysed and a number of
conclusions drawn: first, a novel configuration map is proposed; second, key strategic capability parameters are identified;
third, networking trends and their implications for configuration are discussed.
Introduction
Business globalisation is leading to widespread
restructuring of international manufacturing systems
in transnational corporations ŽTNCs. ŽUNCTAD,
1993.. Little systematic research in manufacturing
engineering or productionroperations management
ŽPrO M. has focused on these new manufacturing
systems ŽAnderson et al., 1989; Lawrence and
Rosenblatt, 1992; Miller and Roth, 1994; Shi and
Gregory, 1995.. Many critical issues, such as proper-
ties of international manufacturing network systems
in terms of structural architecture, dynamic mecha-
nisms, and related strategic capabilities and strategy
processes, are poorly understood and are not covered
by current manufacturing research agendas. In indus-
try, lack of global vision and appropriate strategies
during the internationalisation have become major
barrier to the effective management of international
operations ŽKlassen and Whybark, 1994..
Background
The changing industrial enÕironment
The international market is not only a sum of
different national markets. Traditionally, interna-
tional business strategy is based upon these individ-
ual markets and sets up objectives and policies sepa-
rately to satisfy the specific requirements of different
countries. This type of international development is
an outcome of ‘multidomestic’ oriented strategy
ŽDicken, 1986; Porter, 1980.. As international com-
munication and exchanges extend, especially under
the trends of political regionalisation and rapid eco-
nomic growth in some developing countries, the
global market—a new type of international market is
emerging ŽLevitt, 1983; Yip, 1992.. This global mar-
ket is based on the shared and common demands of
different countries. It integrates different national
preferences into a core entity and presents this as a
fundamental and nondifferentiable market require-
ment.
The focus of this paper
This paper mainly introduces the knowledge-base
research work in the research programme, by focus-
ing on the first and second stages of the research
programme in Fig. 1, although the background to the
full programme is briefly introduced in the paper to
provide contest. Presenting four typical cases to
demonstrate the emerging and transformation of in-
ternational manufacturing network systems, the pa-
per sets out to discuss typical options of the network
configurations and their related strategic capabilities
and managerial behaviours. However, as this knowl-
edge-based research is only a part of the wider
programme, it might be helpful to remind that the
research strategy, model constructions and methodol-
ogy choice are designed from the point of view of
the whole programme rather than just for finding
knowledge or building theory.
Research methodology
The ‘process research approach’ was adopted in
the knowledge-based research. The process approach
enables firms to capture strategic and operational
decision-making into a relatively standardised imple-
menting procedure which is easier for firms to apply
and control ŽDTI, 1988; Platts and Gregory, 1990;
Platts, 1993; Maslen and Lewis, 1994.. Platts and
Gregory Ž1990. note:
The audit procedure has sought to ‘operationalise’
the existing strategy frameworks . . . and make them
accessible to the management of operating compa-
nies. This has been done by using worksheets at each
stage of the process to facilitate the recording and
progressing of the procedure. The use of worksheets
is most important as they require the users to interact
formally with the process rather than simply review-
ing a ‘checklist’. The worksheets also provide trace-
ability; the logical and data of the analytical part of
the process are recorded and can be revisited periodi-
cally to check that the bases for the strategy are still
appreciate.
Conclusions
In summary, manufacturing businesses are in-
creasingly faced with decisions involving global con-
siderations and capability development. The litera-
ture of manufacturing strategy and of international
business are reasonably well developed but the links
between them are weak. The research set out in this
paper suggests the following.
Ø Manufacturing globalisation, based on internal
coordination or rationalisation rather than pure geo-
graphic expansion, clearly dominates current manu-
facturing business internationalisation ŽFig. 5..