Manufacturing Footprint: A Value Chain ApproachDocument Transcript
Manufacturing Footprint: A Value Chain Approach
Sami Farooq1, Chris O’Brien2and John Johansen1
Center for Industrial Production1
Fibigerstræde 16, 9220 Aalborg, Denmark
Division of International Business2
The University of Nottingham Ningbo Campus
199 Taikang East Road, University Park, Ningbo 315100, China
Email: firstname.lastname@example.org , email@example.com , firstname.lastname@example.org
This paper presents a process based conceptual approach for the evaluation of manufacturing
plant location decisions. The developed approach recognises the importance of global supply
chains and their increasing role in achieving desired competitiveness. The decision making
environment for manufacturing plant location is divided into manufacturing, supply chain and
general environment. The manufacturing environment consists of intra-organisational factors,
supply chain environment consists of inter-organisational factors and the general environment
contains several other factors that play an important role in the plant location decision. It is
suggested to determine risk associated with each manufacturing footprint alternative in terms of
opportunities and threats in the three divided decision making environments. The use of
analytical hierarchy process (AHP) and strategic assessment model (SAM) is proposed for the
detailed risk evaluation before subsequent selection of a desired alternative. This preliminary
approach is planned to be implemented in the industry using case studies to refine the proposed
process and further investigate the research area.
Keywords: Manufacturing Footprint, Value Chain, Opportunities, Threats
In an increasingly competitive global environment and in the presence of ever demanding
customers, most of the companies are competing with each other under an increased pressure to
gain the global market share. In order to be competitive on the global stage the companies are
constantly evolving their strategies to optimise their global operations. The two basic components
in an organisations global operations strategy are its manufacturing and supply chain. The
process of managing the global operations depends largely on the co-ordination of an
organisations manufacturing and supply chain. The emergence of global supply chains is an
established fact for a manufacturing organisation. Therefore the literature in the field of
production and operations management has been stressing the need of developing the tools,
techniques, methodologies and strategies to provide better coherence between an organisations
supply chain and manufacturing and to provide the ultimate competitive advantage to an
organisation by enhancing the manufacturing productivity at the least possible cost. The
emphasis on reducing the manufacturing cost has taken the top priority in the list of practitioners
and academics and therefore the manufacturing industry witnessed the arrival of various
terminologies such as outsourcing, offshoring and more recently the term manufacturing footprint
is coined to depict the production of right things in the right place. The strategies devised to
promote cost effective manufacturing gave an initial impression that the simple solution for low
cost manufacturing is to shift manufacturing to low cost economies. However as the
manufacturing companies started to move their production activities all over the globe to the low
cost developing countries they began to realise that this manufacturing shift is not simple and
contains many hidden strategic issues that needs to be properly addressed to achieve the goal of
low cost manufacturing. One of the major concerns that need to be carefully investigated is the
effect of production/manufacturing re-location on an organisations supply chain. The
investigation of the capability of a supply chain to support this cost effective manufacturing
initiative and the assessment of risk associated in terms of opportunities and threats for both
manufacturing and supply chain are essential for the achievement of the desired objective. This
paper presents a fundamental approach for selecting a manufacturing location considering the
manufacturing as well as supply chain objectives. The inclusion of the supply chain objectives is
to reiterate the fact that the success of global modern manufacturing depends largely on the co-
ordination between manufacturing and the supply chain. Therefore for a holistic evaluation of a
manufacturing location alternative the role of supply chain cannot be neglected.
Globalised Manufacturing Perspective
The notion that we are living in an age of transnational manufacturing (Ferdows; 1997) is more
evident to a common man than ever before. The basic commodities used in daily life are
produced in different parts of the world. The companies are collaborating with each other over
various geographical regions to produce products. The increasing collaboration between
companies has given them the chance to use each others resources and expertise and thus focus
more on their own core competencies (Prahalad and Hamel, 1990). The presence of such
activities and partnerships among companies gave rise to the concept of international or global
sourcing (Monczka and Trent, 1991; Bozarth et al., 1998; Nassimbeni, 2006). The increased co-
ordination among various companies also announced the arrival of the term supply chain or
global supply chain. A supply chain is a network of facilities and distribution options that
performs the functions of procurement of materials, transformation of these materials into
intermediate and finished products, and the distribution of these finished products to customers.
The earlier understanding of supply chain was on the effective performance of the day-to-day
activities associated with logistics functions, such as the optimisation of inventory and the
acceleration of the product flow throughout the supply network (Ross, 1998). Lambert et al.
(1998) have extended the concept of supply chain to represent the integration of business
processes across organisational boundaries. They stated that the integration of business processes
deals with total business process excellence and represents a new way of managing the business
and relationships with other members in the supply chain. The inclusion of different business
processes under the umbrella of a single term called supply chain also highlighted international or
global souring described more recently as strategic sourcing as an important supply chain
business process. Several researchers have studied the concept of strategic sourcing (Quinn and
Hilmer, 1994; Lonsdale and Cox 1998; Canez et.al, 2000; Quinn, 2000; Momme, 2002; Corbett,
2004; Trent and Monczka, 2005; Kocabasoglu and Suresh, 2006). The research in the field of
strategic sourcing is studied from the perspective of understanding the sourcing decisions such as
outsourcing, insourcing, make or buy and supplier selection. Another important element in
strategic sourcing is to develop make or buy decision making models based on a company’s core
competency analysis. The basic intention of all the strategic sourcing studies has been to reduce
the operational cost (Howleg et al., 2008). The more and more acceptance of strategic sourcing as
an important supply chain practice demands detailed investigation of strategic sourcing decision
making process and the role of strategic sourcing in optimising a supply chain needs a thorough
elaboration (Zainal Abidin and O’Brien, 2008).
The presence of globalised manufacturing has also provided the idea of having global
production/manufacturing units. The determination of location decisions for production of
products is a key aspect of strategic decision making for manufacturing organisations
(MacCarthy and Atthirawong; 2003). The alignment of location decisions with the overall
strategy of a manufacturing organisation is necessary to achieve the desired results (Wang et al.,
2008). The literature on the international plant location decisions is relatively scant with the
availability of few studies in the subject area (Badri et al., 1995; Canel and Khumawala, 1996). A
very wide range of factors can influence a firm’s decision to locate their production facilities
across globe. The access to low cost factors, resources and proximity to market are described as
few of the important factors for plant location (Ferdows, 1997). The term plant location and
design seems to be replaced by the broader concept of strategic sourcing in the literature. The
researchers are describing various forms of strategic sourcing in the shape of outsourcing and
insourcing (Zainal Abidin and O’Brien, 2008) and are further subdividing them into offshore
outsourcing and offshore insourcing. Offshore outsourcing can be referred to as a process taking
place when a company enters into a sourcing agreement with a provider outside the
country/region concerning supply of capacity that has previously been provided in-house. The
provider will normally take over the ownership and decision rights of the outsourced activity or
product. Similarly offshore insourcing can be referred to as a process taking place when a
company decides to supply the capacity in-house by setting up a new business unit with a
provider outside the country/region. This strategy may happen when for example a Danish or UK
manufacturer sets up a factory in China, taking advantage of the local labour, but the
management of the factory remains with the focal company (Zainal Abidin and O’Brien, 2008).
These examples of offshore outsourcing and offshore insourcing can be referred as the modern
shape of classical plant location decision making process.
Strategy Formulation Perspective
The traditional perspective of strategy formulation is that every firm is concerned with
formulating its own organisational strategies independent of the strategies formulated by other
members of the network. This approach supports the view that competitive advantage is sought
on an organisation specific basis rather than on the basis of the value chain to which the firm
belongs. In this kind of approach the relevant unit of analysis is a firm. However recent research
examining networks suggests that networks can be a source of competitive advantage (Dyer,
1996; Dyer and Singh, 1998; Poirier, 1999). This has shifted the focus of competitive advantage
from the single organisation to inter-organisational resources. Therefore strategy formulation
from an inter-organisational perspective positions the network as the unit of analysis. As the
attention is shifted from a single organisation to the entire network so the term ‘supply chain’
evolved. Nowadays firms do not compete for the end customers. They compete with each other
for position in desirable supply chains (Bradley et al., 1999; Harland et al., 1999; Cox, 1999).
They then concentrate on developing the necessary capabilities that will make them valued
members of the supply chain (Fine, 1999). Once developed these firm based capabilities become
the resources the supply chain draws on in its competitive struggle with other supply chains for
loyal end users (Skrabec, 1999). Hence in the network view the competitive success of a firm
depends on the competitive success of the supply chain (Poirier, 1999). The nature of the global
business environment has made it necessary for the successful manufacturer to carefully link its
internal processes to external suppliers and customers in unique supply chains (Frohlich and
Westbrook, 2001). The importance of supply chain integration is an established fact however the
knowledge regarding different forms of integrations and their effect on manufacturing
performance is relatively weak. Four different types of strategic integrations as shown in figure 1
have been identified in the value chain (Swink et al., 2007).
Figure 1: Types of Strategic Integration in Value Chain (Swink et al., 2007)
Strategic customer integration is the process of acquiring customer requirements information and
related knowledge. This provides a better understanding of the customer requirements and helps
to develop a strong relationship with customer. Strategic supplier integration involves the process
of acquiring and sharing operational and technical knowledge with the suppliers and vice versa.
Product –process technology integration is the process of simultaneously developing product and
processes and is pursued in manufacturing plants so that manufacturing processes may
incorporate a better understanding of product requirements and similarly product designers may
incorporate a better understanding of manufacturing process capabilities into product
specification. Corporate strategy integration is about sharing objectives, plans and related
knowledge pertaining to manufacturing and business strategies. Corporate strategy helps in
aligning the business level and plant level decisions by setting the performance targets and
deployment of resources.
The decision regarding the extent of upstream and downstream integration by most of the
manufacturers are implicit in nature. Some manufacturers have little integration with suppliers
and customers and therefore have a relatively narrow arc of integration. On the other hand some
manufacturers extensively integrate with their suppliers and customers thus having a broad arc of
integration (Frohlich and Westbrook, 2001).
Figure 2: Arcs of Integration (Frohlich and Westbrook, 2001)
Growing evidence suggests that the higher the level of integration with suppliers and customers
in the supply chain the greater the potential benefits. High supply chain integration intensity
directly influences the following competitive capabilities as summarised below (Rosenzweig et
• Product Quality Capability
• Product Delivery Reliability
• Process Flexibility Capability
• Cost Leadership Capability
By considering the literature it can be summarised that the emergence of global supply chains
have forced companies to review their operational strategies. The new strategies are devised
considering the importance of supply chains and the decision making processes are developed in
a way that they support collaborative decision making for the optimisation of the supply chain.
An optimised supply chain can be termed as value chain and is the objective of organisations
working in collaborative networks. The concept of value chain advocates the importance of value
creation activities which are required to bring a product or service from conception, through the
different phases of production to deliver to final consumers, and final disposal after use
(Kaplinsky, 2004). The important issues in value chain analysis include firm’s supply chain
structure, co-ordination between various activities within a firm and the role of core value
creation activities in achieving a firm’s competitive strategy (Wang et al., 2008). Therefore it can
be said that co-ordination between manufacturing and supply chain is a constituent component of
a value chain.
A Value Chain Approach for Determining Manufacturing Footprint Alternative
The concept of value chain demands an optimised supply chain. In order to have an optimised
supply chain it needs to be included in an organisations decision making process. The inclusion
of inter and intra-organisational factors in organisational decision making process provides
comprehensiveness to the evaluation process. Therefore considering the importance of supply
chain considerations and their increasing role in achieving competitiveness on organisational as
well as network level, this paper proposes a six step approach for the evaluation of manufacturing
footprint alternatives as shown in figure 3.
Evaluation of Current Supply Chain
Critical Supply Chain Factors for Market
(Long term, medium term, short term)
Identification of Manufacturing Footprint
Alternatives to fulfil Supply chain factors
Detailed Assessment of Identified
Manufacturing Footprint Alternatives
Risk Assessment of Manufacturing Footprint
Figure 3: A Conceptual Approach for Assessment of Manufacturing Footprint Alternatives
Evaluation of Current Supply Chain
The first step is to evaluate the current supply chain performance of a product for which there are
more than one manufacturing footprint alternatives are available. The main attribute of step 1 is
the involvement of the relevant company managers in evaluating their own supply chain which
gives them a first hand picture about their performance as compared to the market needs and
demands and directs them towards their strong and weak links in order to sustain the increasing
pressure from their competitors. This leads to the re-evaluation of their business strategy and
provides them with an indication of into which areas they need to put in more effort and the areas
where they are doing better than their competitors. The common supply chain performance
measures like cost, quality, lead time, new product development and flexibility are advised to be
included in the evaluation process. The importance- performance matrix (Slack, 1994) is used in
this process to observe the performance of the supply chain compared to its competitors with
reference to a particular performance metric like cost, quality, lead time, flexibility and new
product development and the importance of that particular performance metric in the current
supply chain. The results obtained are plotted on the importance performance scale depicting the
true picture of the supply chain. An illustrative example of importance-performance matrix for
performance evaluation of supply chain objectives is shown in figure 4. Similarly figure 5 shows
the market evaluation of the supply chain performance measures from the customer perspective.
This helps to relate the performance of a supply chain with the performance of the product in the
market. From both the figures 4 and 5 it is evident that cost and lead time were the factors that
caused concern in supply chain as well as the market performance of the company. This shows a
relationship between the failure of the supply chain in achieving an appropriate level of
performance in cost and lead time resulting in poor performance of the company in the market on
the basis of cost and lead time.
Figure 4: An Illustrative Example for Supply Chain Evaluation
Figure 5: An Illustrative Example for Market Evaluation
Critical Supply Chain Factors for Market Competition
The second step is the clear identification of the critical factors on which a supply chain plans to
compete. Once the strength and weaknesses of the supply chain are indicated the next step is to
select a few factors from the indicated factors for re-defining the business strategy according to
the market condition. The major outputs from this step are the identification of the core
competencies, defined as a set of factors for market competition and re-defined business strategy.
The third step is to define the planning range for the supply chain to compete on the factors
defined in the second step. The supply chain members may wish to compete on a long, medium
or short term basis. The major input is the re-defined business strategy that is the product of the
second step described above. Another input is the nature of the market and business in which the
supply chain is planning to compete. The major output of this step will be the future vision of the
business and the supply chain. The other output will be the requirement of the means and
definition of resource allocation to execute the proposed actions.
Identification of Manufacturing Footprint Alternatives
The next step is to identify the suitable manufacturing footprint alternatives to fulfil the critical
supply chain objectives defined in the second step. This involves the input of a manufacturing
plant location scanning process and requires carefully selected experts who understand the
technical and strategic conformance expected from the selected manufacturing footprint
Detailed Assessment of Manufacturing Footprint Alternatives
The fifth step is the detailed assessment of the identified manufacturing footprint alternatives. A
review of the literature shows the availability of various techniques for multi-criteria decision
making such as ranking of alternatives, scoring models, utility models, fuzzy techniques,
analytical hierarchy process and multi objective mathematical programming techniques such as
goal programming. This approach proposes use of the analytical hierarchy process (AHP)
developed by Saaty (1980) and the strategic assessment model (SAM) presented by Tavana and
Banerjee (1995). In this step there is an effort to bridge the gap between the business objectives
and the manufacturing capabilities of the supply chain. This has been done by dividing the
decision making environment into manufacturing, supply chain and general environment and by
determining the probability of occurrence of the opportunities and threats associated with each
manufacturing footprint alternative in three different decision making environments. The division
of the decision making environment into manufacturing and supply chain provided a mechanism
to investigate the role and contribution of inter and intra-organisational factors in selecting a
desired manufacturing footprint alternative. The output of the process is the identification of
possible alternatives to achieve manufacturing and supply chain goals and the detailed
characteristics of each available manufacturing footprint alternative. An example showing
decision hierarchy for opportunities and threats for the assessment of suitable manufacturing
alternative is illustrated in figure 6 and figure 7.
Risk Assessment of Manufacturing Footprint Alternatives
The final step is the risk assessment of the identified manufacturing footprint alternatives in
which the risk associated with each manufacturing footprint alternative in terms of opportunity
and threat is evaluated before selection. The output of this step is the overall risk adjusted
manufacturing footprint alternative strategic value which is the algebraic sum of risk adjusted
manufacturing footprint alternative opportunity value and risk adjusted manufacturing footprint
alternative threat value.
Manufacturing Supply Chain General
Environment Environment Environment
1. Development Cost Reduction 1. Ability to Influence and Shape 1. Economic Factors
2. Development Time Reduction Demand
3. Unit Cost Reduction 2. Ability to Handle Demand 2. Social and Cultural Factors
4. Maintenance Cost Flexibility
5. Increased Productivity 3. Lead Time Reduction 3. Legal and Regulatory Factors
6. New Product Development 4. Lean Operations
7. Improved Performance 5. Sharing of Risk and Rewards 4. Government and Political
8. Intellectual Property Potential 6. Commitment to Network Factors
7. Proximity to Suppliers
Figure 6: Manufacturing Footprint Alternatives AHP Decision Making Hierarchy (Opportunities)
The process approach presented in this paper for the assessment of manufacturing footprint
alternatives is in its preliminary stage. The process depicted in figure 3 needs to be further
elaborated and tested using industrial case studies. The input information for various processes
(figure 3) is required in detail and the output deliverables have to be more objective oriented. It is
assumed that the industrial application of this approach will help to validate its functionality in
practice and will provide an insight to refine the defined processes.
Manufacturing Supply Chain General
Environment Environment Environment
1. Capital Cost 1. Inadequate Collaboration 1. Management Issues
2. Staff Resistance to Change
2. Product and Service Delivery
3. Employee Layoff 2. Local Currency Exchange
4. Training Expenses 3. Different Organisational Rates
5. System Integration
6. Potential New Equipment 3. Business Climate
Installation/ Re-Location 4. Separate Business Objectives
7. Quality Concerns 4. Attitude of workforce
5. Competing in different
Geographical Locations 5. Labour Unions
Figure 7: Manufacturing Footprint Alternatives AHP Decision Making Hierarchy (Threats)
Case Study 1
The proposed approach for manufacturing footprint alternative is planned to be evaluated using a
case study approach in a leading Danish manufacturer of valves and components for heating,
ventilation and air conditioning (HVAC). The company is a global player in the field of HVAC
accessories and is constantly striving to increase its global market share. It has recently acquired
a local electronics company in China by recognising the need of gaining the market presence in
the rapidly emerging consumer market. Such is the rate of demand in China and its potential for
companies that the Danish manufacturer is aggressively embarking on their slogan of making
China its second home. The Danish manufacturer is retaining the brand name of the recently
acquired Chinese electronics company and is using its own sales network to satisfy the need of
the Chinese market. The company acquired in China is in the process of establishing a new
factory in 2009.
The Danish HVAC accessories were traded in China since the early 1990s with a small market
share at that time. It inaugurated its own manufacturing facility in 1997, though the company had
to initially operate in a leased plant while moving to its own manufacturing facility in 2002. The
simple reason for moving the production facilities to China was to reduce the cost of the products
by exploiting the cheap availability of labour and land. The opportunity of entering into a
developing and exponentially increasing consumer market was also a chief contributor behind
moving the production facilities in China.
However the Chinese expedition 10 years ago did not turned out to be as simple as it was initially
perceived by the company. The first major issue faced by the company was the non availability of
the suitable suppliers in China. The process of identification of the desirable suppliers required
some time and even after the suppliers were identified the language barrier played its part and the
company faced an uphill task in explaining the technical specifications to the suppliers. This lead
to confusion and in most cases parts had to be acquired from suppliers in Europe rather than from
local Chinese suppliers thus increasing the cost of operations. The management style of the
company was new to the Chinese workers and it took them a while to understand the culture of
collaborative sharing at the work place. Another issue faced by the Danish manufacturing
company in China was the production of its counterfeit products. The local manufactures were
producing the same products by copying the design of the Danish manufacturer and were not
reprimanded severely enough by the law enforcing authorities. This was bringing considerable
loss to the Danish manufacturer and they were told by the local authorities that it was nearly
impossible to eradicate this practice and they must observe all necessary precautions in their
production and operations. The story for the Danish manufacturer changed with the opening of its
own manufacturing facility in 2002. The five year experience of operating in China helped the
company to understand the market and the rules of the game more strategically. Therefore the
company finally started to break even and with the expansion in business it increased its product
range. The acquisition of the electronics company in the recent past is an effort to diversify its
product range and to constantly retain a sizeable market share.
The decision of establishing a new factory in China provides an opportunity to test the
manufacturing footprint alternative approach presented in this paper. It is proposed to mitigate
the decisions taken by the Danish manufacturer few years ago while locating its manufacturing
plant in China by using the developed approach. This process will provide an opportunity to test
and further refine and elaborate the proposed approach. This will act as a pilot study and after the
refinement of the process the refined approach will be aimed to facilitate the decision making
process for new manufacturing establishment in China. The biggest challenge faced in
establishing a new factory in China is to integrate the new manufacturing setup with the global
supply chain of the Danish manufacturer and to strategically align the objectives of the new
establishment with the parent company in Denmark. Considering the importance of supply chains
in the modern business environment the approach presented in this paper provides a provision to
include supply chain opportunities and threats associated with each manufacturing footprint
alternative to determine a comprehensive solution for evaluating a new manufacturing footprint.
Therefore the proposed approach aims to act as a co-ordination mechanism between
manufacturing and supply chain to achieve the desired results.
Case Study 2
This case deals with a Danish pump manufacturer which is a leading player in the industry. The
basic aim of the company is to provide different types of environmental friendly pumps and also
the pump accessories to the global pump market. The highly technical nature of the product
means high price and specialised manufacturing process. The company has a major presence in
Europe with developing growth rates in North America, China and India. Therefore to meet the
increasing customer demand the major investment by the company has been in developing
production facilities, research and development (R&D) and to diversify the product range. The
company has followed the industrial trend for locating production facilities in the cost efficient
China and has been operating in the country for nearly a decade. The company has constantly
reviewed its overseas production experience and by successfully using these experiences has
located its production facilities in recent past to different parts of the globe like India, Russia and
Hungary. However the company has acquired a strategic position in Suzhou (China) industrial
district and has attained a dominant position among the pump cluster (a network of pump
companies and suppliers in Suzhou industrial district). The company considers the Chinese
market to provide it a significant proportion of business over the next few years. The availability
of huge market potential, suppliers, low cost inputs and educated labour is forcing the company
to further strengthen its presence in China by increasing its production capacity and to look for
future production plants to satisfy the market demand.
Like many other European companies the Danish pump manufacturer faced a number of
difficulties in locating its manufacturing facilities in China. The first issue was to make the
relationship with the local suppliers. Since the business culture in China is completely different
from the European business culture it took some time initially by the company to develop close
relationship with the suppliers. This was complicated by the advance presence of an industry
competitor in China who had already attracted the attention of the suitable suppliers and had
made strategic collaboration with them. The pump manufacturing is a complex technical work
and requires skilled educated workforce. The availability of educated engineers in China was an
advantage but to attract that workforce to a newly arrived foreign manufacturing company
required some persuasion. The pump manufacturing thrives on the quality of the product and the
cost associated in achieving the desired quality is usually accepted by the pump manufacturers.
Therefore the quality level of the finished products in the Chinese manufacturing plants was the
top priority of the production managers. The quality of the product was dependent on the quality
of the raw material from the suppliers and the quality control techniques implemented during the
production process. This required taking the suppliers and the factory workers onboard regarding
the quality expectations. The effective communication with the suppliers and the workers was
necessary to attain the desired quality levels. The factory management style needed to be adapted
according to the local working environment. It was necessary to abide the local political and
cultural customs to guarantee the smooth production operations. Finally counterfeiting that has
nearly affected every foreign company which has moved its production facility to China was
addressed after gaining more information and experience about the local industry traits and by
collaborating with the law enforcing agencies.
The Danish pump manufacturer is having China at the top of it strategic growth agenda. The
company has recently increased the capacity of one of its production plants and is always
exploring different locations within China for its future location of production facilities. The
process approach presented in this paper will be aimed to crystallise the plant location decision
making approach for the Danish manufacturer in China. The first step would be to understand the
original decision to locate the production facilities in China in the last decade. The important
aspect would be to understand the advantages that have been gained by these production
locations and the unexpected problems or difficulties that have been caused by such decisions.
The lessons from this exercise will be incorporated in locating the current manufacturing
footprint alternative. The involvement of inter-organisational factors in manufacturing footprint
assessment approach will determine the risk associated with it in terms of opportunities and
threats whereas the presence of intra-organisational factors will safeguard the manufacturing
The global manufacturing industry is highly competitive. The manufacturing companies are
facing the pressure of reducing the product cost and are actively striving to minimise their lead
time. The struggle to reduce the product cost has resulted in looking for better more efficient
suppliers by the manufacturing companies all over the globe. The availability of modern
communication facilities, improved logistical solutions and the race of the survival by satisfying
the global customer demands have contributed actively in developing and shaping the concept of
extended supply chains. The presence of the global supply chain have provided manufacturing
companies access to suppliers located in various geographical regions and more importantly have
provided the manufacturing companies to establish stronghold in the newly discovered thriving
global markets. However with all these advantages comes a big challenge of managing these
global chains. It is the objective of every company and the network to which that company
belongs to have a supply chain which adds value to their system. Thus having only a global
supply chain is not the key to success but it is mandatory to have a value chain for successful
global operations. The first basic step in enhancing the value of a supply chain is to include its
benefits and concerns in organisational decision making processes. Therefore by keeping in mind
the importance of having coherent manufacturing and supply chain this paper presented an
approach for the assessment of manufacturing footprint alternative by combining manufacturing
and supply chain opportunities and threats associated with a manufacturing footprint alternative.
It is envisaged that the case studies will help in elaborating the proposed process approach and
will produce a refined and more detailed solution to the problems of locating overseas
manufacturing plants. The case studies aim to develop a knowledge base for locating overseas
manufacturing operations especially for Danish manufacturers by drawing on their existing
experiences and processes. It will provide a platform to trace the manufacturing footprint of the
Danish manufacturers in China by linking their past decisions with their current objectives and
their future ambitions. It is hoped that the manufacturing location selected using this approach
will add value to the systems by satisfying the manufacturing and supply chain requirements thus
making it an important constituent of an organisational or network value chain.
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