International factory networks

Abstract

Multinational Companies (MNCs) very often manufacture in a number of different countries. The management of these international factory networks has received very little direct attention from operations management specialists either in terms of research findings or the development of conceptual models. There is clearly a need to fill this gap to improve the operations of existing multinational manufacturing companies and to provide models for new emerging international companies (EICs). A review has been made of the literature on the experience of EICs and the general concepts presented by writers on operations management and business strategy. A research model is proposed which examines material and information flows according to the extent of the interlinking of individual factory units with each other and with a central manufacturing function. Factors suggested for investigation are the nature of the factory network, taking into account the business strategy, marketing strategy, organisation, finance policy, and human resources policy. Ten factors are taken as indicators of the performance of the network; product quality, customer service, network production flexibility, production costs, productivity, inventory, procurement, distribution, new product introduction and technology.