Operations Strategy in a Global Environment
International Operations at General Motors
For years, General Motors dabbled with the idea of becoming a truly global business. While the firm exported its cars to several other countries and had a few plants outside the U.S., it remained predominantly a North American enterprise. Just a few years ago, for example, 80% of the firm’s vehicles were made in North America. Cars made elsewhere were often retreads of older GM models no longer in demand in its domestic market. GM’s older South American plants, for example, were still churning out Chevy Chevettes well into the 1990s.
All that has changed dramatically in recent years, since GM made a bold and public commitment to becoming a global automaker. New products are being designed and manufactured in other countries, and GM is striving aggressively to reach a goal of having 50% of its capacity outside of North America. At the center of this effort is an innovative approach to designing and manufacturing its automobiles in the four corners of the world.
General Motors is essentially emulating its Japanese rival, Toyota. Through a series of partnerships and alliances, GM has gained important insights into the payoffs that Toyota has achieved through its strategies of plant standardization and lean manufacturing. At Toyota, a change in a car being made in Japan can easily be replicated throughout other Toyota plants around the world, and Toyota is the acknowledged master and pioneer in rapid design, exceptional quality, supply-chain management, and productivity.
In contrast, U.S. automakers have traditionally designed each automobile factory as a unique and autonomous facility. While this sometimes makes a given plant especially productive—because it was designed for one specific purpose—it also constrains flexibility and makes it more difficult to transfer new technologies and methods between factories.
GM is now using...
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