This report is based on the case study of PH. It is the global information technology company which has its headquartered situated in California, United State of America. The organization prepares different type of hardware components such as tablets, laptops and printers etc. Here, with an aim to provide support to the global operations, PH has outsourced many of its manufacturing operation in the countries such as Singapore and China etc. This is done by the firm with an aim to get the benefit of reduced cost. In addition to this, from the given case it has also being identified that the firm has been going through with different types of issues which are associated with the new project (Uluskan, J
In accordance with the given context, it can be said that the report will provide the detailed description regarding the key issues which needs to be consider by firm when making the decision that whether it must have to reshore the call center operation or not. In addition to this, the report will also provide description regarding the ways which cited firm can adopt in order to manage its manufacturing operation in an effective manner. Furthermore, several recommendations will also be suggested to the board of PH with an aim to successfully establish the Shared Service Center at appropriate location. Finally, at the end project plan will be prepared for the transfer of singularity product development center to Germany.
Key issues to be considered when making the decision of whether or not to reshore call center operation
Reshoring is the practice of bringing manufacturing and service operation back to the country from which they were outsourced (Reshoring, 2015). It is being regarded as one of the most popular concept which has gained importance in today's competitive scenario. There are different type of issues identified which needs to be consider by manager of PH when making the decision of whether or not to reshore call center operation of the company (How Will You Know When to Reshore? Five Factors to Consider, 2015). Here, by improving the knowledge regarding different issues an effective decision can be taken by the manager of PH. The detailed explanation about the same is depicted in below:
Increment in cost: It is being regarded as one of the most crucial factor which needs to be consider by the firm when making the decision about the reshore of call center operation. In accordance with the given context, it has been seen that the main objective behind outsourcing the operation of firm in other market or country is to get the benefit of carrying out the production of product at low cost. If given purpose is not met by the firm at that time the need relating to reshoring the operation of firm will be arises in front of the manager of enterprise such as PH (Gray and et.al., 2013). For example, PH has outsourced its manufacturing operation in China with an aim to avail labor at low cost. Thus, if after some period of time it has been identified by the manager of cited corporation that the labor cost which it incurs in USA is similar to the cost which is being incurred by it in China. Then in the given circumstances manager again have to think upon its outsourcing related operation. As a result of decision about the reshoring will be taken by the company in an effective manner.
Market access and localization: While making the decision about the reshoring, PH must consider the market access and localization related factor. The decision relating to reshoring does not look by manager as a binary decision of about manufacturing product in one place or to other. This is because, the tactic such as reshoring is not only associated with manufacturing operation, but it is more than that. In this regard, it can be said that while making the decision of offsoring and reshoring the operations of company, manager of PH must consider the localization related factor (Chen and et.al., 2014). In this regard, it must make efforts whether it wants to satisfy the needs and demands of its targeted buyers or not. In this regard, it has been seen that satisfaction of firm's customers will be maintained if firm fulfills their needs and demands relating to product within the given specified time limit. However, this can be fulfilled if PH manufacture its product in own country rather than other. This is because, by complying with the given type of activity PH can carry out significant reduction in the lead time of delivering product. In accordance with the given context, it has been seen that enterprise lead time relating to product will be increase when organization outsource its manufacturing operation to some other country. Due to this, necessary impact can also be seen in the sales and profits of enterprise such as PH (Magelssen, Sanchez and Damanpour, 2015).
Political environment: Political environment of the country also forces company like PH with regard to comply with the practice such as reshoring. For example, the government of USA is going through with the condition like increased unemployment within country. Then in the given circumstances it will force the other companies such as PH which is outsourcing its function in another country with regard to adopt the strategy such as reshoring. However, if the given tactic will not being adopted by the manager of cited firm at that time it will become difficult for the enterprise with regard to maintain the continuity of its operation within country in an effective manner. Overall, it can be said that by considering all these given issues an appropriate decision regarding the whether or not to reshore the operation of company can be taken by PH (Görg, Hanley and Ott, 2015).
Critically evaluating the PH's options and providing recommendations for locating and manufacturing its operation
On the basis of analyzing the given case it is identified that the company such as PH is integrating its operation with other company named as singularity. This is done with an aim to increase effectiveness of firm's operations. In this regard, from the given case study three different type of options identified which PH can use with an aim to start its manufacturing operation. It consists of Europe, USA and Far East etc.
The cost of resources as well as cost of purchasing land is high in Europe. This is because, Europe is very expensive country. In addition to this, the infrastructure facility in Europe is well developed (Chakravarty and et.al., 2014). This can be provide opportunity to the company such as PH with regard to make the use of given technology in order to provide assistance to the manufacturing operation which is being performed by it. However, it has been critically evaluated that although the cost of living is very expensive in country, but cited firm can avail labors at cost effective prices. This is because, in Europe many labors are outsourced from some other country where cost of labor is low. Thus, it can be said that due to the availability of migrated labor within country, firm can fulfill its labor related demand at cost effective prices.
In addition to this, USA is another option which PH can adopt with an aim to start its manufacturing operation. USA is known for its high technology savy environment. In this regard, it is analyzed that government of USA make significant efforts with regard to improve the infrastructural facilities of the country. This can be proved as fruitful aspect for the firm like PH. This is because, the given thing will provide opportunity to the firm with regard to carry out the production of their products by using the latest tools and technologies. However, it has been evaluated that the cost of purchasing the land as well skilled labor is very high in USA. This will lead to raise the cost of company (Grahovac, Parker and Shittu, 2015). Thus, it is beneficial for the company that it must choose some other option with an aim to start its manufacturing option. Furthermore, another option which are available with company is all the Far East countries. In this regard, it can be said that PH must choose China as the option with regard to start its manufacturing operation (Willcocks and Lacity, 2014). This is because, the country like China is economical in all aspects whether there is a need of low cost labor, land and high technologies. Thus, on conducting the analysis it is recommended to the manager of PH that it must start its manufacturing operation in China. This is because, by starting operation of firm in the given market PH can avail the labor for its company at cost effective prices (Clark, 2014). The given thing will provide opportunity to the firm with respect to sale the product of enterprise at low cost. Through this way, firm can attract large number of buyers towards its services and thereby it can gain benefit in the form of increased profits and sales in an effective way.
In addition to this, PH should outsource its operation to the manufacturing company which operates in China. This is because, the company which function within the country has thorough information about the culture as well as norms of the nation. Furthermore, carrying out the operation of firm at the lowest cost is being regarded as another most critical benefit of outsourcing. Thus, it is suggested to PH that it must outsource its product manufacturing work to companies operates in China.
Making the justified recommendations to the board of PH
On the basis of analysis of given case, it is identified that firm is establishing the Shared Service Center. In this regard, two options are available with the cited firm which it can use with an aim to start its operation in the respective country in an effective manner. It consists of India and Philippines etc (DasGupta, 2014). However, with an aim to select the appropriate location for the firm several approaches identified which needs to be considered by firm. The detailed description about the same is depicted in below:
Supply of labor: In order to carry out the operation in new location, firm will require the sufficient amount of labor. This is because, it is with the help of significant number of labors only, the manufacturing operation can be carried out by corporation in a smother manner. In this regard, it has been identified that India is being counted among second most populous country in world (Craig and Baxter, 2014). In addition to this, India is not only recognized for the quantity of labor, but it is also recognized for the quality of labor too. Besides this, Philippines is also the highly populated country but it does not possess good number of highly qualified as well as skilled labor.
Cost of land: It is another approach which can be used by the PH with an aim to make the decision about the location for its Shared Service Center (Chniederjans, Schniederjans and Schniederjans, 2015). For the firm it is very necessary that it must consider the given factor while making the decision about the location for the manufacturing operation of firm. This is because, lack of consideration about the given factor will lead to raise the cost of enterprise in an effective way. Due to this, firm will be forced with regard to sale its services at high prices in an effectual way.
Availability of high technologies: The firm always prefer to start their operations in the country which is highly developed in terms of infrastructural facility. It is important for the corporation that it must consider the given factor (Tjader and et.al., 2014). This is because, with the use of high technologies firm can carry out its Shared Service Center operations in a smother manner. Furthermore, due to this enterprise can also get the benefit in the form of increased profits and sales in an effectual way. Overall, it can be said that among both the given market it is recommended to PH that it must start its Shared Service Center operations in the country like India. This is because, India is the country which fulfills low cost labor related cost of firm. In addition to this, it also helps company with regard to avail the land for manufacturing operation at cost effective prices. It is due to the presence of given aspect, India is suggested as the location for starting the Shared Service Center operation of company in an appropriate manner (Kotlarsky, Scarbrough and Oshri, 2014).
From the above analysis, it is recommended to the PH company that it must outsource its HR and IT operation to the country like India. This is because, if it is done then all the benefits which are mentioned in above paragraph can be gained by the company in an effectual way.
Explaining the content of project plan for the transfer of Singularity product development plan to Germany
In the given case, it is also analyzed that the PH is transferring its Singularity product development center to the country like Germany. In order to perform the given activity, firm will have to go through with number of activities (Rivard and Aubert, 2015). Here, with an aim to give the description about different activities, assistance has been taken from the approach such as Gantt chart. It is the project management tool which is used with an aim to attain the specific objective of firm within the given specified time limit. In addition to this, with the help of technique like Gantt Chart motivation of the workers working in PH can be enhanced. Here, motivation of employees will be hindered when they do not possess any knowledge or information about the tasks which they need to perform (Mitchell, 2015). In accordance with the given context, following steps identified which manager of cited firm can use in order to transfer the Singularity product development center to Germany.
- Analyzing the political environment of Germany.
- Gathering information about land in Germany.
- Selecting appropriate location for Singularity product development center in Germany.
- To make the arrangements for finance
- To contract different contracting agency who can carry out the construction work
- To start the construction operation
- To finish the construction work for Singularity product development center.
- To recruit employees for the new center
- Finally, start the operation of firm in new center.
On the basis of given steps following Gantt Chart is prepared
Besides this, there are some resources required with an aim to Singularity product development center in Germany. The detailed explanation about the same is depicted in below:
Financial resources: Sufficient amount of finance is required with an aim to given practical implementation to the respective project. Here, the need relating to the finance can be fulfilled by firm by taking help from varied sources of obtaining finance.
Human resources: The firm will also require the team of talented and skilled employees which can be used by the firm with an aim to accomplish its product development operation in an appropriate manner (Sarder, Miller and ZIAUL, 2014).
It can be concluded from the whole report that, before making the decision about the reshore and offshoring manager of firm must consider the different type of issues. This is because, by improving the knowledge about different issues, firm can set its direction towards the right path. In addition to this, by taking help from the technique such as Gantt Chart firm can accomplish its set goal within the given specified time limit or in an effectual manner.
- Chakravarty, A. and et.al., 2014. Choice of Geographical Location as Governance Strategy in Outsourcing Contracts: Localized Outsourcing, Global Outsourcing, and Onshore Outsourcing. Customer Needs and Solutions. 1(1). pp.11-22.
- Chen, X. and et.al., 2014. New algorithms for secure outsourcing of modular exponentiations. Parallel and Distributed Systems, IEEE Transactions on. 25(9), pp. 2386-2396.
- Chniederjans, M.J., Schniederjans, A.M. and Schniederjans, D.G., 2015. Outsourcing and insourcing in an international context. Routledge.
- Clark, G.T., 2014. The importance of partnership when outsourcing exploratory bioanalysis. Bioanalysis. 6(6). pp.733-736.
- Craig, L. and Baxter, J., 2014. Domestic Outsourcing, Housework Shares and Subjective Time Pressure: Gender Differences in the Correlates of Hiring Help. Social Indicators Research, pp.1-18.
- DasGupta, S., 2014. Globalization and Transnational Surrogacy in India: Outsourcing Life. Lexington Books.
- Görg, H., Hanley, A. and Ott, I., 2015. Outsourcing Foreign Services and the Internet: Evidence from Firm Level Data.
- Grahovac, J., Parker, G. and Shittu, E., 2015. The Impact of Costliness, Competitive Importance, and Modularity of Investments on Outsourcing. Production and Operations Management. 24(3). pp.421-437.