Strategic logistics in co-ordinated global manufacturing success

Abstract

As more US firms turn to global manufacturing, not only to meet the competitive challenges brought on by the economic globalization of the past 20 years but also to take advantage of the unique opportunities created by global markets, logistics will increasingly be viewed as strategically critical to the firm's competitive succcess. While much of the impetus for the development of co-ordinated global manufacturing strategies has historically originated from the desire to reduce production costs to compete with lower-cost foreign competitors, the emergence of large trading blocks has created an additional incentive for global manufacturing. Indeed, the added incentive of gaining access to global markets is now a pervasive argument in the decision to establish global manufacturing operations. Regardless of the reason for undertaking a global manufacturing strategy, the key to achieving success rests on the firm's ability to effectively co-oordinate its worldwide operations so that the overall manufacturing network performs as a cohesive conversion system. Logistics competence provides this essential co-ordinating mechanism.