Global Reader is a 5 year old E-company that grew from $1 million in sales in the second year to $8 million in sales. They have created the industry’s first portable book reader that provides any book in four major languages. They have manufacturing operations for their hand-held devices located in India and the Dominican Republic to supply the western and eastern hemispheres.
You have become Global V.P. for Distribution and Logistics. Due to the global economic downturn, your CEO has tasked you with looking at the possibility of relocating your operations elsewhere. You know that in the last few years there have been increased kidnappings and robberies in Santo Domingo (due to increased drug-related problems) at the operation in the Dominican Republic. It has gotten to the point where your employees feel threatened by coming to work there. In India, with the down turn in the economy, your plant is the only one open in that area of Goa on the East coast of India. You are located right near the port. But as work has become scarce for people there in Goa, they have moved out, and it is difficult to find workers willing to work various shifts and transport shipments to the port. Your company does have another smaller plant in Mumbai, but lately there have been several bombings in that city by extremists and employees feel threatened.
Based on this information, what do you suggest to the CEO and why? Where should your plants be located? What cost-cutting can be accomplished while positioning the company for continued explosive growth? Create a step-by- step initial plan of action using bulleted points. Then write 2 paragraphs detailing your potential plans for production facilities/staff for the next three years.
Based on the information provided, the Global V.P. for Distribution and Logistics should suggest relocating the operations to another location. The safety concerns and difficulties in finding willing workers and transporting shipments in both the Dominican Republic and India pose significant challenges for the company. Here are the suggested steps in the initial plan of action:
1. Conduct a comprehensive analysis of potential locations: Research and identify potential suitable locations for the manufacturing operations that fulfill the company's requirements. Factors to consider should include safety, availability of skilled labor, transportation infrastructure, and cost-effectiveness.
2. Evaluate the potential costs: Assess the costs associated with setting up new facilities in different locations, such as land or building acquisition, labor costs, transportation costs, and any legal or regulatory requirements.
3. Perform a risk assessment: Examine the safety and security situation in each potential location to ensure a secure environment for employees. Consider the political stability, crime rates, and any other relevant factors that may impact the safety of the workforce.
4. Consider potential incentives: Investigate potential incentives or subsidies that may be offered by governments or local authorities to attract businesses to specific regions. These incentives can help offset the costs of relocating and could contribute to long-term cost-cutting goals.
5. Develop a detailed cost-benefit analysis: Compare the costs and benefits of each potential location, including potential savings in labor costs, transportation costs, and other cost-cutting measures, against the operational and logistical requirements of the company.
Based on the potential plans for the next three years, the company should consider the following:
1. Facility relocation: Based on the analysis, select a new location or locations that offer favorable conditions for manufacturing operations. This may involve closing the existing facilities in Santo Domingo and Goa and investing in new facilities elsewhere.
2. Workforce planning: Develop a plan for attracting and retaining skilled workers in the new location(s). This may include partnering with local vocational schools or offering training programs to develop a skilled workforce. Additionally, consider creating an employee relocation package to incentivize current employees to move to the new location(s).
3. Enhanced security measures: Implement stringent security measures at the new facilities to ensure the safety of employees and protect against potential threats. This may include hiring private security firms, investing in surveillance systems, and implementing safety protocols.
4. Streamlined logistics: Optimize the transportation and shipping processes to cut costs and improve efficiency. This may involve negotiating contracts with dedicated logistics providers to ensure smooth transportation of shipments to and from the new location(s).
5. Continuous improvement: Establish a continuous improvement plan to constantly monitor and evaluate the effectiveness of the new facilities and make necessary adjustments. This includes regularly reviewing the safety measures, optimizing production processes, and seeking feedback from employees and customers to identify areas for improvement.
By following this initial plan of action and implementing these potential plans for the next three years, the company can position itself for continued explosive growth while addressing the safety concerns and cost-cutting goals. The new locations should provide a secure and efficient manufacturing environment, ensuring the success and future growth of Global Reader.