Firms must constantly explore sources of cheaper inputs and overseas production in order to remain competitive in our rapidly shrinking world. Indeed, this process can be regarded as manufacturing ‘ s new international economies of scale in today ‘ s global economy. Just as companies were forced to rationalize operations within each country in the1980s, they now face the challenge of integrating operations for their entire system of manufacturing around the world in order to take advantage of there new international economies of scale. What is important is for firms to focus on those components that are indispensable to the company ‘ s competitive position over subsequent generations and outsource other component in which outside suppliers have distinct production advantage.