Part A – Using ProQuest, the online database on the Ashworth College website, and Internet research, discuss what factors make international distribution more complex than domestic distribution.

Part B – Using Toyota as an example, what has been the influence of Japan on supply chain management? In your answer, discuss the concepts of industrial clustering and quality.

Part C – Why is global HRM more difficult than domestic HRM? How can staffing a foreign facility with locals alleviate some of these HRM difficulties?

ANSWER

Foreign Facilities and Supply Chain Management

Distribution is an essential logistics function in supply chain management that helps balance supply and demand. Distribution involves delivering products from original equipment manufacturers to retailers or consumers. Global distribution involves delivering manufactured products to all markets globally, while domestic distribution involves delivering products among consumers within the geographic location of a country of operation by a company. International distribution is faced with numerous complexities and challenges compared to domestic distribution due to the diversity and extensive operation environment and geography. Global distribution presents numerous risks compared to domestic distribution due to the influence of the external environment (Antoniadis & Tomlekova, 2014). Therefore, factors that make international distribution more complex than domestic distribution are the differences in legal frameworks, regulations, currencies that result in poor inventory management, unique distribution channels, and distance that complicate communication processes. Operating internationally means considering and accommodating different and diverse legal frameworks, regulatory issues. Every country has different and unique laws, ‘rules of the game’ and terms of conducting business seen in distribution contracts, tariffs, and trade barriers.

Moreover, a company must identify the most appropriate distribution channels in different countries to maximize product reception and efficiency in reaching the global markets on time and in high quality. A single distribution channel strategy does not work in every country; some must adopt multiple distribution channels such as Lenovo Company to ensure all customers, even in local areas, receive their orders. It also becomes complex to deal with numerous currencies, especially when handling inventories. It is different as domestically; a company has to deal with a single currency; hence, exchange rates and prices are not affected. Internationally, exchange rates are affected, which utterly affects their finances and bottom-line. Communication becomes another source of complexity (Antoniadis & Tomlekova, 2014). A company has to keep track, monitor, and communicate with distributors from different geographies. It can be difficult, especially in areas with poor or less developed network reception and connectivity.

Japanese prides itself on increased efficiency in its manufacturing and SCM through influential frameworks and approaches. They include JIT (Just-in-Time), Kaizen, meaning continuous improvement, Jidoka, meaning reliability, and Heijunaka meaning a matching level in production and product sales in the manufacturing, logistics, and sales systems (Park & Krishnan, 2012). These frameworks have made supply chain networks and management productive and competitive, hence influencing Toyota’s supply chain management. Toyota integrates all these terms and frameworks in their supply chain management. For instance, through the Toyota Production System, short car production time is taken through continuous flow, efforts, and improvements. The smooth process and systems provide a comparative advantage, maximizes productivity, reduces waste, and improves the quality of the cars. Moreover, a Japanese management approach influences Toyota’s SCM, which is the cross-functional management approach. It emphasizes on quality of products, minimized operational costs, and efficient delivery. Since centuries back, Japan is known to form industrial clusters, such as just-in-time delivery clusters through which Toyota Company has adopted and created the Toyota Castle Town cluster, Aichi Prefecture, a leading sales center of Toyota cars. This cluster houses more than 2,225 facilities, equipment, and machines related to the transportation of products (Jankowiak, 2011). These Japanese frameworks have influenced the supply chain management of Toyota to ensure maximized efficiency, effectiveness, comparative and competitive advantage in the automobile industry.

Just like global distribution, global HRM is presented by numerous risks compared to domestic HRM due to the influence of the external environment, diverse cultures of employees, and institutional capacities or factors. International HRM provides an extensive perspective, activities, and scope compared to the narrow perspective and scope in domestic HRM. At international levels, employee issues are no longer limited at a single country; rather, they are diverse in different parts of the world where labor rights, employment relations, laws, and regulations are unique and different (Dessler, 2013). Keeping up with ever-changing labor and employee relations in foreign countries becomes difficult as total compliance is mandated for an international company’s effective operations and success. A significant source of complexities and challenges in international HRM is the pay structure. Countries have different pay structures accompanied by unique currencies with ever-changing values, which, if not integrated and coordinated, provide heightened susceptibility to pay issues, losses, errors, and pay mistakes.

Staffing a global facility with locals alleviates global HRM difficulties, as a local workforce understands cultures, socio-economic, and political conditions better than foreign employees do. Moreover, many countries have developed employee relations and labor rights that maximize the use of local talent. If foreign companies are uncompliant, they add to the difficulties of international HRM. When foreign companies use foreign employees, host companies may feel threatened by the presence of an environment controlled by unfamiliar people. Therefore, countries embrace local talent while global companies integrate a ‘glocal’ strategy to increase local talent and workforce. With maximized local staffing, a foreign company creates a better reputation and image through which optimized support is likely to be granted. Issues of resistance and complicated international HRM, such as increased animosity among workers, are eliminated (Dessler, 2013). Besides, having local employees boosts employee morale and engagement as cultural differences, which is a primary difficulty in global HRM are removed. People prefer working for people they share an origin, or they know compared to a foreigner; hence, communication is made more accessible, and management becomes efficient and smooth.

References

Antoniadis, I., & Tomlekova, N. (2014). Supply Chain ManageMent: a View of the DiStribution Channel. Bulgarian Journal of Agricultural Science, Vol 20(2), pp; 480-486.

Dessler, G. (2013). Human Resources Management,13TH Edition. New York: Pearson Education Inc.

Jankowiak, A. H. (2011). Cluster models in Japan on the example of Toyota cluster. Wroclaw University of Economics: Faces of Competitivenessin Asia Pacific, Vol 191(173), pp; 173-181.

Park, D., & Krishnan, H. A. (2012). Elephant and Samurai: Differences between Indian and Japanese Supply Chain Management. Journal of Management Issues, Vol 24(2), pp; 207-224.