PRODUCTION AND OPERATIONS MANAGEMENT LOCATION STRATEGY CASE STUDY

PRODUCTION AND OPERATIONS MANAGEMENT

LOCATION STRATEGY

CASE STUDY ACCOCIATION FOR COMPUTING MANUFACTURING (ACM)

Introduction: q q It is an electronic component manufacturing company. It is located in singapore

1. Increase in labor costs 2. Utility cost increased SO, COMMITTEE SUGGESTED TWO NEW LOCATIONS CASE PROBLEM

1 2 3 • Singapore • Hong Kong • Malaysia LOCATION STRATEGY

HONG KONG

1. More access to labor and labor cost decreased 2. Large seaport 3. Good infrastructure HONG KONG

MALAYSIA

1. Give access to Natural Resources 2. Transportation Infrastructure is good 3. Deep sea port MALAYSIA

SINGAPORE

Offers by Government: �Tax exemption �Subsidized by Government. SINGAPORE

QUESTIONS

QUESTION N 0. 1 What advantages and disadvantages does each potential location offer?

SINGAPORE Advantages • Labor relatively cheap, • Good transport infrastructure ◦ Incentives offered to stay. Disadvantages: � � Increasing labor costs Increasing utility costs.

HONG KONG Advantages: 1. Labor consistently cheap and 2. Good transport infrastructure.

MALAYSIA Advantages: 1. Access to raw materials and natural resources 2. Inexpensive labor Disadvantages: 1. Concern with frequency of ship visits. 2. Transportation cost increased.

QUESTION N 0. 2 What other relevant factors that are not mentioned in the case study might play a role in this decision? 1. The education of the workforce 2. Political stability will impact the decision.

QUESTION N 0. 3 Why is transportation infrastructure so important in this decision? Transportation costs will doubtlessly have a large impact on the decision.

QUESTION N 0. 4 This is a long-term strategic decision; what factors might change in the next ten to twenty years? How will this influence the decision? Examples of costs which are likely to change and whose change would make or break the decision

QUESTION N 0. 5 Which alternative would you recommend, under which circumstances?

ANY QUESTIONS