What It Takes to Reshore Manufacturing Successfully Harvard Case Solution & Analysis

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Broad differentials in energy costs in different regions of the world, high supply chain and logistics prices, and rising labor costs in China and other emerging markets are provoking a fresh round of relocation of manufacturing and creation. While some labor-intensive occupations are winding its operation and moving from China to Southeast Asia or the next emerging low cost areas, some manufacturing work is, in addition, returning to the United States. Wal Mart is facilitating prop attempts among its suppliers, and advisers are offering prop conferences, reports and plenty of advice.

This is particularly affirmative when resources that are needed (the provider base, the workforce and even the firm’s own inner product layout capacities) have atrophied. Shih analyzed several initiatives aimed at rebuilding regional capacity in the United States (including at GE’s Appliance Park in Kentucky and two Flextronics International plants in Texas) and other examples in Asia and Europe to identify lessons about what works. Setting production close to the marketplace reduces delivery times, minimizes inventory in the pipeline and shortens ordering cycles.

The challenges were apparent: the need to stabilize the workforce, address skill gaps, reconsider the capital/labor ratio, localize the supply base and rethink product design to leverage the closeness to production. In a lot of ways, Shih writes, the challenges of reshoring to the United States are prop in any market in the world’s challenges. Managers must design supply chains for the creation of goods that balance proximity to diverse marketplaces with the locations of their supply ecosystems and their capabilities. Doing that well, Shih claims, will stay a wellspring of competitive advantage.

PUBLICATION DATE: October 01, 2014 PRODUCT #: SMR504-PDF-ENG

This is just an excerpt. This case is about LEADERSHIP & MANAGING PEOPLE

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