Supply Chain and Competitive Advantage Analysis

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Currently, none of the company’s competitors has a production facility in Latin America. To reach this untapped market, the chief executive officer (CEO) is considering opening an additional manufacturing facility in Latin America. The operations management team has been directed to analyze the factors (including global) that need to be considered when deciding where to locate a new facility and report the recommended factors for consideration to the CEO. The team will also need to analyze how a life cycle assessment will help the company reduce its ecological impact, including making a case to the CEO that the benefits are worth funding the effort. The company has the following four goals for establishing a new facility:

Increasing its customer base in the untapped Latin American market
Reducing the company’s ecological footprint
Reducing production cost
Enabling multicultural collaboration opportunities between the operation’s functional teams (marketing and sales, finance, and operations) in the U.S. and Latin America facilities
By answering the bullet points below, your operations management team will analyze the factors (including global) that need to be considered when deciding on where to locate the new facility and show how a life cycle assessment will help the company reduce its environmental impact, including making a case to the CEO that the benefits are worth funding the effort.

Use decision making and life cycle assessments to determine opportunities for sustainability in operations.
Differentiate which location factors below should be considered.
Describe the expected multicultural collaboration.
Evaluate the following aspects of the life cycle
Cradle-to-grave assessment
End-of-life programs
Reduction of costs and materials used
Reuse of parts of returned products
Recycling
Summarize key points from the research methods and sampling analysis discussed above.
Address the following in the Supply Chain and Competitive Advantage Analysis:

Introduce the reader to facilities location decision making and using life cycle assessments to determine opportunities for sustainability in operations.
Differentiate what location factors below should be considered by your furniture company’s CEO and operations management team when determining the location for the new manufacturing facility and explain why each selected factor is relevant to achieving the company’s four goals.
Country
Government
Culture
Customer preference
Labor
Resources
Financial
Technological
Market
Region
Raw materials
Markets
Labor
Community
Education
Shopping
Recreation
Transportation
Utility cost
Taxes
Regulations
Site
Land
Transportation
Zoning
Other restrictions
Global
Trade agreements
Technology
Legal
Regulatory
Multicultural collaboration (across business functions)
Describe expected multicultural collaboration opportunities between marketing and sales, finance, and operations teams in the United States and their peers who will work at the new facility in Latin America.
Evaluate the following aspects of the life cycle assessment for the ability of each to help your furniture company reduce its ecological impact and operations costs, including making a case in support of funding the assessment to the CEO:
Cradle-to-grave assessment
End-of-life programs
Reduction of costs and materials used,
Reuse of parts of returned products
Recycling

Sample Solution

Supply Chain and Competitive Advantage Analysis

Introduction to Facilities Location Decision Making and Using Life Cycle Assessments to Determine Opportunities for Sustainability in Operations

The decision of where to locate a new manufacturing facility is a complex one that requires careful consideration of a wide range of factors. These factors can be broadly categorized into two groups: location factors and life cycle assessment (LCA) factors.

Location factors are those that are specific to the geographic location of the facility. These factors include:

  • Country: The political and economic stability of the country, as well as its tax and regulatory environment, will all play a role in the decision of where to locate a facility.

  • Government: The government’s policies on trade, labor, and environmental protection will all need to be considered.

  • Culture: The culture of the country will also need to be considered, as this will affect how the company interacts with its employees, customers, and suppliers.

  • Customer preference: The company will need to consider the preferences of its customers in the Latin American market.

  • Labor: The availability and cost of labor in the country will need to be considered.

  • Resources: The availability of raw materials, water, and energy will all need to be considered.

  • Financial: The cost of land, construction, and operation will all need to be considered.

  • Technological: The availability of technology and infrastructure will all need to be considered.

  • Market: The size and growth potential of the market will need to be considered.

  • Region: The region of the country will need to be considered, as this will affect the availability of transportation and logistics services.

LCA factors are those that are related to the environmental impact of the facility throughout its entire life cycle. These factors include:

  • Cradle-to-grave assessment: This assessment considers the environmental impact of the facility from the extraction of raw materials to the disposal of the product.

  • End-of-life programs: These programs are designed to reduce the environmental impact of the product at the end of its life cycle.

  • Reduction of costs and materials used: This can be achieved through a variety of methods, such as using recycled materials and designing products for disassembly.

  • Reuse of parts of returned products: This can be achieved by refurbishing or remanufacturing returned products.

  • Recycling: This can be achieved by collecting and processing used products for reuse or remanufacturing.

Differentiating Location Factors

Not all location factors are equally important to the company’s four goals. The following table summarizes the relevance of each location factor to each goal:

Location Factor Increasing Customer Base Reducing Ecological Footprint Reducing Production Cost Enabling Multicultural Collaboration
Country Important Moderately important Moderately important Important
Government Moderately important Moderately important Moderately important Important
Culture Moderately important Moderately important Important Important
Customer preference Important Moderately important Moderately important Moderately important
Labor Moderately important Moderately important Important Important
Resources Moderately important Important Important Moderately important
Financial Important Important Important Important
Technological Moderately important Moderately important Moderately important Moderately important
Market Important Important Moderately important Moderately important
Region Moderately important Moderately important Moderately important Moderately important
Raw materials Moderately important Important Important Moderately important
Markets Important Moderately important Moderately important Moderately important
Labor Important Moderately important Important Moderately important
Community Moderately important Moderately important Moderately important Important
Education Moderately important Moderately important Moderately important Important
Shopping Moderately important Moderately important Moderately important Moderately important
Recreation Moderately important Moderately important Moderately important Moderately important
Transportation Moderately important Moderately important Moderately important Moderately important
Utility cost Moderately important Moderately important Important Moderately important
Taxes Moderately important Moderately important Important Moderately important
Regulations Moderately important Moderately important Moderately important Important
Site Important Moderately important Moderately important Moderately important
Land Moderately important Moderately important Moderately important Moderately important
Transportation Moderately important Moderately important Moderately important Moderately important
Zoning Moderately important Moderately important Moderately important Moderately important
Other restrictions Moderately important Moderately important Moderately important Moderately important
Global
Trade agreements Moderately important Moderately important Moderately important Moderately important
Technology Moderately important Moderately important Moderately important Moderately important
Legal Moderately important Moderately important Moderately important Moderately important
Regulatory Moderately important Moderately

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