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A Case Study At Balagny Clothing Co

Good Essays

Florida Tech
Lorraine Alvarez
EMG3340
Professor Michael Aubry
October 7, 2016
Problem
As a consultant to Balagny Clothing Co., these are the problems that I understand have occurred after the relocation to China for the production of your product:
Balagny Clothing Co. closed all of its domestic manufacturing plants and moved its operations to China. The agreement put in place with the Chinese company seems to be an Independent Overseas Manufacturer agreement. By utilizing this type of agreement, it gave up almost all control of the manufacturing processes and development of their products. The agreement with the Chinese contractors was for a fixed amount of product to be delivered in batches and the orders could not be changed. Because of the lack of control of the product, Balagny lost control of it supply chain management. Geringer (2016) states that supply chain costs can denote 50 percent of a company’s assets and 80 percent of their revenue, which makes this an extremely important part of the quality and cost management process of the company. Due to the lack of control of supply chain management, Balagny increased its inventory which ties up money available to the company.
Balagny Clothing Co. also found that the Chinese contractors used different materials to produce the products and utilized their own raw material suppliers. Because of these changes customers noticed the difference in the feel and fit of the products. There was a loss of

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