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Factors Influencing Global Economy

Factors Influencing Global Economy
Factors That Influence Global Economy The industrial and business environment of developing countries has been subjected to a sea of changes owing to the economic reforms and policies in the light of globalization, privatization and liberalization. A long term economic vision is necessary for these countries to establish themselves in the global market which facilitates the process of becoming self sufficient in due course of time. Let me present you with a synopsis of how this change can happen and how countries are adapting themselves in lieu of the global economic boom. Multi Brand Retail Markets: Many multinational companies have acquired and are trying to acquire a major part of equity in multibrand retail markets of the host country and sometimes they opt for Joint ventures to factorize the economy of scale which also proves to be a win-win situation for both the parties. Developing countries have altered their economic views on foreign direct investment and are very liberal in their attitude in providing with the necessary licenses. The entry of multinational companies and their potential investment has even altered core sectors like power, oil and telecommunications. Moreover, the benefit of cheap labor, economic subsidies for the start of operations in economically backward regions lures foreign investors. Rush of Entrepreneurship: There is a rush of entrepreneurship in the developing countries, in the form of setting up of small scale industries, cottage industries for which liberal subsidies are provided by the governments to encourage the act of entrepreneurialism. Also people want to go for diversification, mergers and acquisitions in the wake of global competition. Capital Markets’ Role: Capital markets have gained new buoyancy. The rapid growth of stock market and its influence over the international economic scenario have made foreign brokers to keenly follow the market changes for potential investment. The one striking feature of the economy of developing countries is that, it is a self made economy and withstands the pressures of the business cycle, such as recession and inflation, unlike foreign markets that have failed to stabilize their markets owing to what is called sub prime lending, a plan that has failed to achieve the desired economic growth. Instead of making the capital market alive with fresh infusions of funds, it has left many banks and financial institutions bankrupt. Banking Sector: Banking sector has scaled to greater heights and has come under a competitive environment. Deregulation of interest rates to attract potential investors, new technology, products and aggressive marketing usher in new competition; disinvestment of government equity in nationalized banks have made banks to operate as commercial institutions and their services get marketed as branded consumer products. Financial services have emerged as a new business and funding options are aplenty increasing the chances of raising capital. This has evolved as a separate and major source of business fetching revenue to the service providers. Private Sector: Private sector is gaining importance in countries like India, where they have entered all the core industries like oil, mining, telecommunications, road building, railways, ports, civil aviation etc. This serves as a revenue source for the government and this kind of economic restructuring has brought a wave of enthusiasm amongst the potential investors. Imports have become an entrepreneurial activity and are out of the government domain and this has been facilitated by relaxation of licensing hassles. These are some of the recent trends in the developing countries that have captured the interest of multinational...
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Aim and Scope of Operations Management

Aim and Scope of Operations Management
Aim and Scope of Operations Management The management of conversion or transformation process which accepts inputs and delivers usable goods and services is what is called “operations management.” The inputs may be in the form of, capital, material, labor, technology, information, machines etc. The process takes place in an effective and efficient manner through operations planning, design, management and control. Earlier it was called, production or manufacturing management. Since operation is a general term in a productive environment whose output may be goods or services, the term operations management has become more appropriate.  The aim of a good operational management would be High level of productivity Competitive cost and quality Timely delivery Producing goods as per the requirements of the consumer, that is customer oriented. Flexibility and responsiveness in the production of goods and services Production or operation in the three important sectors of an economy, namely, agriculture, industry and service, creates national wealth and serves as an index for the growth of that economy. One has to understand the link between operations management and other functional areas to appreciate its scope. The goals of the operations strategy has to necessarily be in tandem with the overall corporate strategy to accomplish the goals of a firm. Scope of Operations Management From marketing department, cues regarding customer preference and market segmentation in terms of product, price and volume are supplied to the production department, based on which the production planning is concluded. From Research and development comes the product design and process technology. Human resource is an integral part of production process and also a crucial input. Man power planning by the human resource department plays a major role in recruiting, selecting, training, evaluating and empowering labor force. Operations Strategy The great diversity in products and services available in the market should be taken into consideration before deciding on your operations strategy. At one end we have custom made products that are designed and manufactured to suit the specific needs of the consumers. For instance, custom made shoes, shirts, suits, furniture etc. Here the emphasis is on quality and delivery where the customer is not very much bothered about the price. At the other end manufacturers go for highly standardized products that are available “off the shelf.” Say, home appliances, detergents, soaps etc., here the product differentiation is very minimal and the focus is on competitive pricing as the material is available in plenty. Economy of Scale: A customized product would require a manufacturing set up that can handle a wide variety of general products. The sequence of operations for each product would vary in the manufacturing system making a customized product. So, a process oriented manufacturing system is designed, where similar facilities doing similar operations are grouped together and departmentalized. Standardized products go for a product focused manufacturing system, to reduce the “through put” time as large volumes are required. To be cost effective, each product should have a dedicated line of production to take advantage of the “economy of scale.” Intermediate types of products also find their place in the market and they are produced in a production layout that has a mix of product and process orientation. Here a whole range of products and services are created for the benefit of the customers. In a long term basis, manufacturers should aim to develop new technology, environmentally viable products, increase R and D activity, update skills of work force and managers and focus on development of new products, process and...
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Design of an Ideal Plant Layout

Design of an Ideal Plant Layout
Design of an Ideal Plant Layout Approach to proper layout: When a new plant is erected, a good deal of expertise is used by management to design a proper layout. A comprehensive approach with regard to the placement of machineries, location of stores, inspection cabins, tool rooms, maintenance wings, receiving and shipping departments, toilets, canteens and other handling equipments, is necessary for achieving quick and smooth production at the least cost. There is no set pattern of layout for all plants. What is suitable for a giant plant will not be fit for a small factory. What goes well with a processing industry may not match a job industry. But, the basic principles governing a plant layout are more or less the same. Cost of Production: The all time concern of big industries is the ever rising cost of production. Their priority would be mass production or continuous production to factorise the economy of scale. This is possible where industries are involved in producing highly standardized products. Industries involved in the production of customized or specialized products, catering to premium customers, cannot go for mass production since it is not a feasible option. They have to dedicate separate lines of production for different products. Invariable of the type of production, all industries need to cut down their costs wherever possible. The only possible solution is to design a suitable layout that facilitates uniform and minimum movement of materials thus avoiding wastage, minimization of production delays and avoidance of bottlenecks. An ideally laid plant layout reduces manufacturing costs through reduced materials handling, reduced personnel and equipment requirements and reduced in-process inventory. It is amazing how industries in Japan have mastered the art of employing Just-in-time concept, which focuses on continuous improvement and increases the rate of return on investment by reducing the in-process inventory and associated costs. The importance of plant layout would be better appreciated if one understands the influence of an efficient layout on the manufacturing function. An efficient plant layout would definitely incorporate the following aspects: Economies in handling-cut down material handling costs that account for 30-40 percent of the manufacturing cost Effective use of available space-especially in urban areas, where every inch of available space is an asset. Minimization of production delays-on time delivery schedules and speedy execution will help. Improved quality control-to reach expected standards of production Minimum equipment investment-by planned machine balance and location Identification and rectification of bottlenecks-don’t allow materials to pile up at any place of production, don’t allow workers to be lethargic, keep the machines in the best of condition to speed up operations Better production control-facilitated by a planned layout Better supervision-a good plant layout enables the supervisor to have a hawks eye on the entire shop floor Improved utilization of labor-process flow should be planned in such a way that workers should be equipped all the time without any lull Improved employee morale-by providing better working conditions, employee facilities, increased earnings, reduced accidents etc. , Scope for Expansion: A good plant layout must also have scope for expansion or revision in future. Even best layouts become obsolete over a period of time, so revisions ranging from minor alterations to a complete dismantling of the existing structure and installation of a new layout become necessary from time to time. Manufacturers, who are keen to survive the global competition, must consider revising their layouts which should fall in line with technological and market...
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