Case Study Should Amy Go Offshore

Case Study Should Amy Go Offshore

OFFSHORE PRODUCTION 3

CaseStudy: Should Amy Go Offshore

ShouldAmy Go Offshore?

Itis evident that Amy is wallowing in a quandary. On one side, there isthe offshore production that can significantly cut costs andultimately guarantee her promotion and a bonus. On the other hand,there is domestic production that is pivotal for American economy,and employees working in the firm. Offshore production has inherentlimitations that make it untenable as a strategy to boost profits byreducing costs. First, it is not shrewd at all to outsource thefirm’s best selling clothing line to other nations where workersare paid less, for the reason that quality can be a real problem,especially if the there are no qualified workforce to work in thefactories. It is also important to not the fact that offshoreproduction has an ‘eroding cost savings’ effect. This means thatthe cost benefit reaped at the initial stages can be wiped out infuture to the point where the saving would become a superfluous cost.The delivery and quality concerns will ultimately add to the cost aswell a multitude of other elements. In any nation, as the demand ofconsumer items like clothing increase the demand for labor pushingwages up. Today we see workers in prime countries for offshoreproduction such as China striking for more wages (Dana etal.2010)

Perhapsmore importantly in the fact that offshore production is not the onlyway that Amy can use to cut costs and improve profit margins. Thereare other options that would not impact negatively on any group ofpeople (Danaetal.2010.For example, adopting lean manufacturing and six sigma strategieshave the potential of reducing not only the cost but also improvingthe quality. This will maintain employment in United States, meaningmorepotential clients for buy the firm’s product (Danaetal.2010).Organizational goals should supersede personal goals and hencepromotion and bonus should not be the benchmark for course of actionin a organization. The impacts of a given proposal both in the shortrun and long-run should be the yardstick in such an endeavor.

References

Dana,L., Hamilton, R., &amp Pauwels, B. (2010). Evaluating offshore anddomestic production in the apparel industry: The small firm’sperspective. Journalof International Entrepreneurship, 5(3-4), 47-63