Huxley Manufacturing Co. is an engineering company and possesses cutting-edge technology in raw material processing and part assembling. The main customer for Huxley is the US defense department. In recent years many factors were changing. Increase in the costs involved for R&D, higher “knowledge intensity” of defense products and reduced allocation by the federal government as funds towards the defense budget. These changes had made the US defense department move away from the use of sole vendors to more competitive bidding. Price became the most important selection criteria. US firms like Huxley were still the major suppliers; even then purchase from foreign supplier had started. The situation had kindled the idea in Huxley’s management to proceed in search of viable strategic operations to cope with the pricing and at the same time maintain the standards which Huxley had established. Robert Chan, the CEO of Huxley had initiated a plan to assess the advantages in moving the operations of the San Diego plant to Mexico. The team led by Philips has to give a report with detailed analysis.
3.1. “IMPROVE" UNDER THE EXISTING APPROACH:
This recommendation insists on retaining the labor intensive operations to the existing plant at San Diego. Though this is not the most effective of the recommendations, with the budgets allocated for defense falling sharply, Huxley can still plan to improve training so that the trained employees are able to cope up with the activities performed. The actual turnover does not happen because the employees are not satisfied with the salaries but the employees feel that they could not master the required job skills. Huxley can increase the duration of the training provided to the employees. The quality of training can also be monitored and it effectiveness increased by intermediate assessment of the quality of work of the employees. This is a viable option for improving in the...