I need help with this!!!! Canon, a Japanese manufacturer of photographic equipme
ID: 434667 • Letter: I
Question
I need help with this!!!!
Canon, a Japanese manufacturer of photographic equipment, decided against offshoring and kept its manufacturing and new product development processes in Japan, which has relatively high labor costs. In contrast, General Motors, headquartered in the United States, has a joint venture with Shanghai Auto Industry Corporation (SAIC) to produce cars in China. Given the textbook's discussion of outsourcing, offshoring, next-shoring, and supply chain design, discuss an aspect of how these supply chain design strategies might support the companies' operation strategies and corporate missions. Additionally, how might these companies' strategies change in the current global economic environment?
Explanation / Answer
Q1) Below is how thesupply chain design strategies might support the companies' operation strategies and corporate missions -
1. Offshoring strategy involves transfer of the work to other countries either setting up own units or contracting to other firms to take advantage of low labor and land costs, high availability of resources etc. thus reducing the overall cost of the product and increase in profits.
2. Outsourcing is transfer of work to other firms within the same country or other countries through a contract and is usually done when the business wants to concentrate on its core business processes while outsourcing support processes at lower costs.
3. Manfacturing the products internally by the firm provides greater control of quality due to the control of the design and process by the firm and better estimate on the production capacity and resouce productivity thus driving efficiencies.
Q2) In the current global economic environment, with the borders for doing business getting narrowed, firms have become increasingly competitive in acquiring customers from foreign countries, expanding the businesses and taking advantage of the lower costs. Hence, their strategies depend on the factors like costs, revenue growth, availability of skilled resources, ease of regulations etc.