Analysis on the Effectiveness of Lean Manufacturing and Outsourcing among International Business Organizations in the Electronics Industry
Introduction and Problem Statement
Globalization has been the current characteristics among business organizations. Geographic boundaries as well as time have been successfully overcome through innovations and advancements in technology as a result of globalization. Profit-seeking organizations across the world are continuously expanding operations in order to extend the reach of marketing and promotion agenda all in the effort to increase the share in consumer base. Business operations at present are capable of delivering the needs and demands of the consumers and clients both in the local and international markets through incessant business reengineering processes. Aggressive market competition across the world is evident among the existing industries in terms of the information management, physical resources allocation, human capital reserves, financial strategies, procurement and logistics concerns, supply chains, sales and marketing objectives, performance goals, social and corporate responsibilities, and levels of customer satisfaction.
The emergence of a global community has been the result of internationalization trends and initiatives among varying political beliefs, cultural orientations, economic characteristics, and environmental consciousness (Kim and Weaver, 2003). According to Teeple (2000) profit accumulation among business organizations has undergone a shift from the national level to the supranational global setting where information and capital resources flow more ceaseless and relentless. As people become more and more conveniently connected, produced goods and services are likewise becoming more and more available in every possible market place in different localities marked with more frequent international travels and the commonness of virtual communication (Porter, 2004). Moreover, the acquisition of basic knowledge, resources, investments, technology, and ethical beliefs became more fluent across different locations where sharing has been the normal and best practice (Lazarus, 1998).
The end result of the popularity of globalization principles as well as practices led to varying emotional appeals and implications among different individuals as its definitions are associated with various meanings. Changes in the social settings have been witnessed which piloted diverse perceptions, attitudes and beliefs regarding globalization impacts within the continuum of the positive and the negative extremities. People have different emotive inclinations when asked regarding the concept and impact of globalization. There are those who believe in the in the benefits that globalization brings to existing social communities such as the inevitable and irreversible progress and development of the economy while others welcomed it with hostility as brought about by fears on worse social inequalities within and between existing nations and organizations. But nevertheless, it can not be denied that globalization initiated the trends towards greater international movements in terms of commodity, money, information, and people along with the growth and improvements of technology, organizations, legal systems, and infrastructures.
According to Lazarus (1998) the literal meaning of globalization rests on the social changes that characterize it particularly when it comes to forms and channels of social interconnection between people along with other cultural, economic, political, and social activities. In this regard, the contextual meanings of globalization range from (1) the communication and social contacts between distant places that creates mutual understanding, (2) freer trade practices across different market economies between and among commercial industries, and (3) exploitative aspects such as prevarication of legal policies and regulations as well as moral norms and principles (Lazarus, 1998). In this respect, globalization characterizes the new world order in terms of more liberal principles and practices, increased innovation in technologies, and large-scale transnational integration (Scheuerman, 2002).
Within the context of the electronics manufacturing industry, globalization trends resulted to excessive competition between and among business organizations that cater to the needs and demands on electronics products and services. The multi-level and large-scale operations among electronics manufacturing companies led to the formation of new business strategies that concern the entirety of the traditional business processes. The search for continuous and sustainable developments, increased customer satisfaction, and faster return on investments as well as the issues and considerations regarding shorter product life cycle, innovation, unpredictable economic trends, and more sophisticated customer specifications necessitated the call for extensive reformulation of business goals and performance objectives in order to endure the demands of the existing market economies along with aims to gain competitive advantage over industry competitors.
At present, business organizations that belong to the international electronics manufacturing industry deal with the implications of globalization through intensive reforms and reengineering initiatives on business processes. The aggressive competition that characterize internationally operating electronics manufacturing companies led to the utilization of various business operation strategies that will best serve the intentions of the business organizations. These include the implementation and application of contemporary operations management schemes and techniques that can improve the efficiency and effectiveness of the manufacturing and production processes. Due to globalization trends and the need to produce and manufacture at voluminous levels, quality control issues as well as effective resource utilization plan systems confronts modern operations management approaches. Among the popularly applied operations strategies within the international electronics manufacturing industry include the use of lean manufacturing and outsourcing principles and practices.
Simply put, lean manufacturing quality control system was designed to minimize if not eliminate the material wastes associated with production. The system involves enhancement on the value system of the manufacturing processes in order to create more efficient production practices through minimal waste of resources, labor, and time. Lean manufacturing are most utilized by large-scale manufacturing companies which are concerned with mass production operations (1999). On the other hand, outsourcing is a strategic operation approach that involves the mediation and support of another company in completing business operations through singed contract agreements. Also known as contract manufacturing, outsourcing aims to deliver quality products to customers that at the same time enables the reduction of the amount of incurred expenditures from material purchasing and labor costs. It is a strategic alliance between two companies committed to the execution of collaborative models and techniques (1998).
In this light, this academic research activity aims to compare and contrast the level of effectiveness of lean manufacturing and outsourcing among mass production operations of large-scale and transnational business organizations. More specifically, the research study is geared towards the provision of comprehensive and holistic assessment and evaluation of lean manufacturing and outsourcing practices within the context of business organizations belonging to the international electronics manufacturing industry. The entirety of the research paper focuses on the discussions that will determine which of the two operations approaches is most appropriate within the context of the international electronics manufacturing industry. The research argues that full implementation of the lean manufacturing value system is more effective than the principles and practices of outsourcing in the electronics manufacturing industry.
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