Canada Expansion Case

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Canada Expansion
Strength
- Modest amount of $30k was required as capital investment to double the capacity
- Proximity to US (customer market) which could minimize the logistics cost
- Existing management info system and Material requirement planning (MRP) software could be leveraged to improve customer responsiveness
- Better inventory turns compared to Century glass (China) (Six turns Vs two turns)
- Better lead times compared to Century glass

Weakness
- About 8x labor cost when compared w/ low cost (off-shore) manufacturing facility (one week worth labor)
- High wage rates and unionized environment
- No communication barrier (English as a primary medium between customer and manufacturer)
- Increasing competition (per exhibit 2 & 3) and majority of competition had either automation or established (proven) off shore / cost effective manufacturing facility
- …show more content…
In case something goes wrong with Century glass and IDG will get caught with having all eggs in one basket situation
- China requires high capital investment for capacity expansion as current facility (70 employee) is elbow to elbow

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