Reconstructing the Supply Chain after a Cross-Border Factory Relocation

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Management Group: Reconstructing the Supply Chain After a Cross-Border Factory Relocation: Analysis of a Case Study Introduction MGT Group purchased LSD company in northern France in March 2005. LSD is a specialist in the design, manufacture, as well as the sale of high-precision valves for the aerospace, energy and defense industry and is renowned globally however; the company's performance after acquisition by MGT is reported as disappointing. MGT spent $13 million on LSD by the second quarter of 2007 but there was no evidence of improvement witnessed on the group resulting in a decision to close the France plant and relocate the plant to China. I. Challenges The greatest of all challenges facing the company in the transfer project was due to having to first destroy and then create the supply chain. The company had to make decisions concerning the elimination of elements of the original supply chain that were ineffective in nature and then replacing these elements with new elements that were more efficient. It was critical that the team cut operating costs and this would require a fast and steady finalization of the transition since the group was witnessing a lowering of their ability to attract outside investment due to the company's financial situation. A preliminary analysis was conducted and findings showed that there were specific challenges faced by the company during the relocation of the factory. Those seven challenges are stated to include the following:

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