Managing Supply Chain and Operations 1st Edition by Thomas Foster ,Scott Sampson,Cynthia Wallin,Scott Webb

Exercise 9

Trudy Gonzalez was under pressure to put the finishing touches on her presentation to the Williamston Manufacturing executive management committee. Trudy had been with the company, a diversified manufacturing firm. for three years. In that time, she had worked in a variety of areas, most recently in capacity planning. As part of her duties, Trudy was working with a team of emplomes who were analyzing whether the company should begin to produce products outside the United States. Williamston had several production facilities, but all were located in the Northeast or the Ohio Valley. Many of Williamston's competitors had moved production to Mexico or Asia over the past two decades. Some competitors did all of their manufacturing outside the United States.
Trudy believed that locating production overseas could reduce manufacturing costs, but she was worried about the disruption and fracturing of the company's supply chain with production located no far trom key suppliers and end customers. She knew that Manufacturing costs were an important consideration in the analysis, but she also understood that managing a supply chain and controlling shipping costs over great distances could also eliminate any reductions in labor costs from locating plants outside the United States. Trudy's team needed to make recommendations to the company's executive team by next Wednesday. While she was completing her report, she came across an article titled "The Boomerang Effect" from the April 21, 2012, edition of The Economist (available at http://www.economist.com/node/21552898).
Question:
Trudy has hired you as an intern to provide a summary of the article and to relate the issues discussed in the piece to the decisions made by Williamston Manufacturing. Specifically, she wonders how important low wage costs are to manufaauring and whether it is worth chasing after low wages by moving plants outside the United States. What other issues and considerations should be analyzed before making the final recommendation to the executive management committee? Trudy is eagerly awaiting your summary of the article's findings.