Why are the concepts of dependability and quality important when developing a global manufacturing strategy?
Chapter 18 Global
Production and Supply Chains
#Daniels #15edition #GlobalProductionandSupplyChains #GlobalProduction #SupplyChain #Chapter18International Business: Environments and Operations, 15e, Global Edition (Daniels et al.)
Daniels, 15edition, Global Production and Supply Chains, Global Production, Supply Chain, Chapter18
Answer: Many factors besides cost must also be taken into consideration. The growing customer demand for dependability and prompt deliveries has caused companies such as Dell Computer to locate plants closer to customers rather than in low-wage areas. When a longer supply chain risks late deliveries of components or finished goods, shortening the distance can improve dependability. Quality is a major issue as well. As long as foreign operations ensure high quality and contribute to innovation, companies will keep setting up operations abroad. However, after a decade-long trend of sourcing in low-cost countries like China, Japanese firms such as Honda, Canon, and Sharp are now relocating production back in their home country. These MNEs have been responding to the need for access to Japan's pool of skilled workers, as well as its proximity to engineers, parts suppliers, and decision makers. They believe that to ensure innovation and quality, close communication between product development and manufacturing is essential.
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