EBK OM
6th Edition
ISBN: 9781305888210
Author: Collier
Publisher: YUZU
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Chapter 6, Problem 12PA
Summary Introduction
Interpretation:The impact of reshoring to the United States and how it should be encouraged.
Concept Introduction:
Offshoring is the process that takes out various functions of an organization from its country of origin to some other country. It is mostly being done to maintain lower costs and obtaining tax concessions. Reshoring is a term that goes hand in hand with offshoring. It is the process that brings such functions back to the mother country. United States encourages reshoring as it brings them back a lot of opportunities and benefits.
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Toyota SA Motors (TSAM) has announced a R4.28bn investment in local vehicle assembly and partssupply. Speaking at the company’s annual State of the Motor Industry address at Kyalami on Thursday,president and CEO Andrew Kirby said the lion’s share of R2.43bn would go towards the production ofa new passenger-car model from October 2021 at the Prospecton plant in KwaZulu-Natal.The new car, which he did not name, will replace the Corolla model line that will end in 2020. TSAMalso announced it will build a Toyota Hybrid Synergy Drive vehicle, in a first for the continent. Kirbysaid the investment will inject R2.85bn a year into the South African economy and create about 1,500new jobs. He noted that the deal was made possible due to industrial policy certainty in the form ofthe Automotive Production and Development Programme, the government’s incentive plan for themotor industry. The next phase of the APDP runs from 2021 to 2035.TSAM has boosted the local economy with more than R12bn in…
Canon, a Japanese manufacturer of photographic equipment, decided against offshoring and kept its manufacturing and new product development processes in Japan, which has relatively high labor costs. In contrast, GM, headquartered in the United States, has a joint venture with Shanghai Auto Industry Corporation (SAIC) to produce cars in China. Givenour discussion of outsourcing, offshoring, next-shoring, and supply chain design, discuss how these two seemingly diverse decisions could be supportive of each company’s operations strategy.
Difference between offshoring and outsourcing
Circumstances to use each one?
Are there any special subcomponents of each one?
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