Strategic importance of locations and the factors that affect the decision of where to locate a facility. One of the primary roles of an operations manager involves being part of the decision process to locate a new facility in order to either expand the current operations or to reduce cost by outsourcing. The elements to be considered are the same in either case. In this activity you will need to consider a new factory location to support a European customer base.
For this discussion activity, imagine that you have been assigned by senior management to select a sub-contractor to assemble a high technology product for the European market. Recommend a facility location. What type of manufacturing facility would you suggest? Also, explain the elements you based this decision on.
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There are many things to consider when outsourcing a technology to another company including:
1. Costs: You need to look at surface-level cost criteria including salary differential, but other important cost factors include country taxes, telecommunications and data network infrastructure, and intellectual property laws. It's important to look at trends of the country as well so that you can factor in long-term costs of currency exchange and inflation rates as well as possible infrastructure breakdowns.
2. Talent Pool: It's important to know if the given region and country will have enough skilled laborer to support the business. Another important factor to consider is the talent level saturation, is there an influx of businesses moving in that you will have to compete with for this talent pool?
3. Technology Infrastructure: Look at the availability of telecommunications and data networks and the ...
This paper will go into detail on the factors to consider when outsourcing a high technology product. I then make one country recommendation on where I would outsource to.