Reshoring Manufacturing
Jessica Marczak-6618812
Amanda Medina-6600115
Mahesh Sharma
Section J
Case Study
Case A: Reshoring Manufacturing: Coming Home
Q A1: If you are the Chief Supply Chain Officer (CSCO) of a manufacturing company, what are the three major factors that you would argue to convince the Board of Directors in support of moving manufacturing back to Canada? Justify your answer.
As the Chief Supply Chain Officer of a manufacturing company, the three major factors of moving manufacturing back to Canadawould be: the excess costs, the quality flaws as well as the distance between the manufacturer and the company.
Costs:
Initially, businesses outsourced their production mainly because labor was cheaper in Asia. However, according to the International …show more content…
A survey, conducted in January 2010 by the consulting firm Grant Thornton, resulted in 44% of respondents feeling that they received no benefit from outsourcing overseas. Additionally, 7% of them felt that offshoring caused damage to their company. The problem mainly arose from the fact that China has a large demand for outsourced production. In other words, China prioritizes their biggest clients and consequently, the factories put less effort into assembling products for smaller companies (Koerner, 2011). Although manufacturing production in Canada would incur slightly higher costs, businesses would be able to monitor the quality of their products more easily. In addition, many Chinese factories have started to subcontract their work to other factories in the western and central areas of the country at ever lower wages. In other words, production is being handed over to subcontracted employees who did not receive the same training as the employees from the primary manufacturer. As a result, the company does not receive the quality of product that they expect, and more often than not, lose a great deal of money (Koerner,
Amanda Medina-6600115
Mahesh Sharma
Section J
Case Study
Case A: Reshoring Manufacturing: Coming Home
Q A1: If you are the Chief Supply Chain Officer (CSCO) of a manufacturing company, what are the three major factors that you would argue to convince the Board of Directors in support of moving manufacturing back to Canada? Justify your answer.
As the Chief Supply Chain Officer of a manufacturing company, the three major factors of moving manufacturing back to Canadawould be: the excess costs, the quality flaws as well as the distance between the manufacturer and the company.
Costs:
Initially, businesses outsourced their production mainly because labor was cheaper in Asia. However, according to the International …show more content…
A survey, conducted in January 2010 by the consulting firm Grant Thornton, resulted in 44% of respondents feeling that they received no benefit from outsourcing overseas. Additionally, 7% of them felt that offshoring caused damage to their company. The problem mainly arose from the fact that China has a large demand for outsourced production. In other words, China prioritizes their biggest clients and consequently, the factories put less effort into assembling products for smaller companies (Koerner, 2011). Although manufacturing production in Canada would incur slightly higher costs, businesses would be able to monitor the quality of their products more easily. In addition, many Chinese factories have started to subcontract their work to other factories in the western and central areas of the country at ever lower wages. In other words, production is being handed over to subcontracted employees who did not receive the same training as the employees from the primary manufacturer. As a result, the company does not receive the quality of product that they expect, and more often than not, lose a great deal of money (Koerner,