MANAGING TRANSITION PROCESSES OF MANUFACTURING CONFIGURATIONS OF GLOBAL OPERATIONS

Exploration and exploitation excellence is one of the ways of satisfying today’s, tomorrow’s and future customers. Bolwijn and Kumpe (1998) explained that efficiency, quality, flexibility, speed and innovativeness are necessary in order to achieve exploration and exploitation excellence. Western companies have now started to compete on the basis of value delivered by shifting their market focus from manufacturing to more product-service oriented systems. This is linked to the view that manufacturing companies are becoming more oriented to the use of the product-service offering rather than the pure product. Incidentally, products and services are often inseparable and the sale of a product would lead to a relationship where services could be sold over an extended period of time (Levitt, 1983). Thereby, many manufacturers have sought growth through the increased sale of products-services offerings. Localizing and globalizing these products-services offerings have inherent complexities which have been under researched. Facing the intense global competition, companies are seeking higher levels of efficiency and effectiveness by configuring their discrete value-added activities on a global scale and utilizing the best locations for these activities. The trend in the operations of western companies has evolved from domestic market sales and export to offshoring. Export became necessary in order to meet the demand of customers who are willing to pay for a product or service globally. However, export was reduced as a result of the possibility to exploit the opportunity of low cost of production and to harness cheap resources related benefits by offshoring activities. As a result of offshoring and outsourcing, manufacturing activities kept in-house in western companies have reduced and has led to a situation where western companies now embed themselves in emerging markets to harness maximum benefits along products life cycle. Hence, what is offered (product or service innovation), the creation and delivery of products and services (process innovation) and to whom they are offered (market innovation) with the organization and management of the processes involved (people and organizational innovation) together with the creative recombination of existing techniques, ideas or methods (synthetic innovation) will be adopted in this study to manage the transition processes of manufacturing configurations.