P RODUCTION A ND O PERATIONS M ANAGEMENT. L OCATION S TRATEGY.

PRODUCTION AND OPERATIONS

MANAGEMENT

LOCATION

STRATEGY

CASE STUDY

ACCOCIATION FOR

COMPUTING

MANUFACTURING (ACM)

Introduction:

It is an electronic component manufacturing company.

It is located in singapore

CASE PROBLEM

1. Increase in labor costs

2. Utility cost increased

SO, COMMITTEE SUGGESTED TWO NEW LOCATIONS

LOCATION STRATEGY

1 • Singapore

2 • Hong Kong

3 • Malaysia

HONG KONG

HONG KONG

1. More access to labor and labor cost

decreased2. Large seaport 3. Good infrastructure

MALAYSIA

MALAYSIA

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

SINGAPORE

SINGAPORE

Offers by Government: Tax exemption Subsidized by Government.

QUESTIONS

What advantages and disadvantages does each potential location offer?

QUESTION N0. 1

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.

What other relevant factors that are not mentioned in the case study might play a role in this decision?

QUESTION N0. 2

1. The education of the workforce 2. Political stability will impact the decision.

Why is transportation infrastructure so important in this decision?

QUESTION N0. 3

Transportation costs will doubtlessly have a large impact on the decision.

This is a long-term strategic decision; what factors might change in the next ten to twenty years? How will this influence the decision?

QUESTION N0. 4

Examples of costs which are likely to change and whose change would make or break the decision

Which alternative would you recommend, under which circumstances?

QUESTION N0. 5

ANY QUESTIONS