What impact does globalisation have on operations management?

Globalisation significantly influences operations management by increasing competition, diversifying markets, and promoting innovation.

Globalisation, the process by which businesses or other organisations develop international influence or start operating on an international scale, has a profound impact on operations management. One of the most significant effects is the increase in competition. As businesses expand globally, they face competition not only from local companies but also from international ones. This increased competition forces businesses to improve their operations management to stay competitive. They need to ensure their operations are efficient, cost-effective, and deliver high-quality products or services.

Another impact of globalisation on operations management is the diversification of markets. As businesses expand into new countries, they encounter different market conditions, customer preferences, and regulations. This requires them to adapt their operations to meet these new demands. For example, a company might need to modify its product to comply with local regulations or to appeal to local tastes. This diversification can make operations management more complex, but it can also open up new opportunities for growth.

Globalisation also promotes innovation in operations management. As businesses are exposed to new ideas, technologies, and practices from around the world, they can incorporate these into their own operations. This can lead to improvements in efficiency, quality, and customer service. For example, a company might adopt a new manufacturing technology that it learned about from a foreign competitor, or it might implement a customer service practice that is popular in another country.

In addition, globalisation can also lead to challenges in operations management. For instance, managing supply chains can become more complex as businesses source materials from and sell products in multiple countries. This can increase costs and risks, and require businesses to develop new skills and capabilities. However, with effective management, these challenges can be overcome, and globalisation can provide significant benefits for businesses.