Problem Statement
In an effort to remain a low-cost provider, Balagny Clothing Company made the decision to outsource the production of their clothing line to a contract manufacturer in China. By doing so, desired cost savings were obtained Balagny as labor costs and initial investments were less than if the domestic facilities continued manufacturing efforts. Although Balagny’s decision to outsource was created to minimize overhead, it eventually came with a price that nearly shortened the company’s life-cycle.
It is this author’s opinion that although there was a two-year planning phase, research was lacking in supply chain management. Intrinsically, the decision to shut down all domestic manufacturing sites in order to outsource and lower inputs resulted in an altered product, customer dissatisfaction, bottle-neck delivery, high …show more content…
By doing so, the company has the ability to address domestic demand, but also enter into a new market with limited investment.
Conclusion
The life-force of an organization is to satisfy client need while meeting relationship demands of all other stakeholders. In the case of Balagny Clothing Company, their life-force became weak shortly after all product manufacturing was placed in the proverbial egg basket when the decision to close all domestic plants and relocate to China.
In an effort to remain a competitive force, Balagny Clothing Company outsourced domestic production to a China contractor, where total overhead is lower. As a result, product manufacturing rights were lost and product alterations occurred. In the end, domestic consumers were displeased as perceived value had changed, resulting in Balagny’s loss of market
In an effort to remain a low-cost provider, Balagny Clothing Company made the decision to outsource the production of their clothing line to a contract manufacturer in China. By doing so, desired cost savings were obtained Balagny as labor costs and initial investments were less than if the domestic facilities continued manufacturing efforts. Although Balagny’s decision to outsource was created to minimize overhead, it eventually came with a price that nearly shortened the company’s life-cycle.
It is this author’s opinion that although there was a two-year planning phase, research was lacking in supply chain management. Intrinsically, the decision to shut down all domestic manufacturing sites in order to outsource and lower inputs resulted in an altered product, customer dissatisfaction, bottle-neck delivery, high …show more content…
By doing so, the company has the ability to address domestic demand, but also enter into a new market with limited investment.
Conclusion
The life-force of an organization is to satisfy client need while meeting relationship demands of all other stakeholders. In the case of Balagny Clothing Company, their life-force became weak shortly after all product manufacturing was placed in the proverbial egg basket when the decision to close all domestic plants and relocate to China.
In an effort to remain a competitive force, Balagny Clothing Company outsourced domestic production to a China contractor, where total overhead is lower. As a result, product manufacturing rights were lost and product alterations occurred. In the end, domestic consumers were displeased as perceived value had changed, resulting in Balagny’s loss of market