Plant Location Puzzle

2758 Words12 Pages
Plant Location Puzzle Introduction The case study involves a The Eldora Company (EDC), a bicycle manufacturer. EDC has prospered in the local marketplace but the industry on the whole is showing a low growth rate, i.e. the industry as of now is saturated. Large number of bicycle makers had moved their manufacturing operations overseas to take advantage of lower labor costs, EDC on the other hand had stuck with a domestic manufacturing strategy, keeping its plant on the same campus as its corporate offices in Boulder, Colorado. The company now faces competition from low cost manufacturers and a saturated marketplace. Management is therefore thinking of setting up a manufacturing unit offshore (i.e. China, Taiwan, Mexico, etc.) and enter/cater a new market. One of the reasons the company had been so successful was that Boulder, Colorado, was a bicyclists’ mecca. Employees at all levels shared a genuine love of bicycling and eagerly pursued knowledge of the industry’s latest trends and styles. Hence, they were able to relate to the customer needs in a much better way. The case revolves on the situation faced by the company where it faces a stagnant market and competition from low cost manufacturers, which leads them to consider an offshore location for their manufacturing. Keywords: Weighted Score Model, Production, Infrastructure, Communication, Operations What is the dilemma faced by the company? EDC faces a dilemma of whether to shift its manufacturing base to a low labor cost country such as China, Taiwan, Mexico etc. or to continue its production in Boulder, Colorado. While on one hand the company strategy to keep its function in the same area has enabled them to have a control over its manufacturing as well as added flexibility to its strategy many of its competitor’s has moved their base to low labor cost destinations catering to markets
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