Management and Strategy News
Global Operations: 3 challenges, 1 roadmap
by Arthur D. Little
Global operations networks are challenged by three
global trends: the maturing of emerging markets which changes consumers’
attitudes in these countries, the current and ongoing global and
regional macroeconomic instability and the inherent inability of many
companies to overcome these challenges with their current operations
footprint. Arthur D. Little’s latest report ‘Performance Excellence
Networks’ outlines how by implementing key principles, companies can
make a major step forward to tap the full potential of their global
network and become significantly more flexible in reacting on changing
market situations rapidly.
Three widely spread defects within companies are true around the globe:
In most companies, the global operations
networks are complex and not focused due to the fact that their
current organization is the result of historical developments.
They are missing transparent and consistent
governance structures, competencies, processes and an open
collaboration culture which leads to inefficiency.
Operations networks are not optimally networked
internally and externally, hindering a continuous best practice
exchange and flexible adaptations of the global network.
But how can companies solve the operations footprint puzzle to transform
towards an open, focused and networked global setup while consistently
improving local performances in practice? Arthur D. Little and St.
Gallen University have developed a ‘networked operations approach’ - a
set of measures to help companies with the transformation towards
focused, open and networked global operations.
Open operations: This comprises leadership alignment between the
different sites and corporate functions plus the enabling and mobilizing
Focused: They have a clear focus that supports the corporate strategy
and alignment of businesses. Across all regions and functions core
competencies are concentrated on more extensively.
Networked: The new organization is not only networked and aligned within
but also with a range of external partners to create collective
The ‘networked operations approach’ was developed in cooperation with
companies who were willing to let the scientific team share their
insights and have a closer look at their production networks. In this
approach efficient tools were developed, for example the Operations
Maturity Assessment which helps companies assess their own operations
network and the Value Chain DNA Design.
Carsten Vollrath, Global Practice Leader OM Practice Arthur D. Little
says: “To leverage the existing potential, companies need to clearly
define the role individual sites and their interactions with internal
and external partners have. Depending on the industry, if set up
correctly networked operations offer further savings potential of up to
The full report can be downloaded at
How Will You Measure Your Life? by 2013 Thinkers50 Award Winner Clayton M. Christensen