Locating decisions
Samenvatting ‘Why locate manufacturing in a high-cost country? A
case study of 35 production location decisions’
There is a new recent phenomena: western manufacturers are “bringing manufacturing
back home”. We can look at the location decision by taking a lot of organizational and
technological interdependencies into account. we examine the interdependencies of
production with other value chain activities and actors, such as product development,
suppliers, and markets. value chain consists of all the activities related to the ideation,
development, manufacture and sale of industrial products. Supply chain management
means primarily management of the supplier relationships between the final assembler and
the first-tier supplier base.
For location decisions, we have three different approaches:
1. Locational perspective
Decisions about the geography of economic activity are guided by locational factors,
such as proximity to markets, access to knowledge, and the relative cost of
production inputs. The locational perspective seeks to identify the locational factors
that attract (or dissuade) manufacturing investment.
2. Organizational perspective
Decisions about the geography of economic activity are guided by organizational
factors, such as plant roles in the firm's network and interfunctional
interdependencies. The organizational perspective aims to understand how
corporations or business units with multiple manufacturing plants are structured
with respect to the roles assigned to individual plants.
3. Temporal perspective
Decisions about the geography of economic activity are guided by temporal
considerations. Research using this approach takes time as the central variable and
examines issues such as time-based competition, lead times, demand patterns, and
industry dynamics.
Decision perspective
We can look at how we can make a decision, with the decision approach/perspective. We
examine three relationships based on three key concepts. We look at the production-
supplier relationship, the production-development (R&D) relationship and the production-
market relationship. We examine these relationships and how they influence your decision
based on coupling, formalization and specificity:
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