Huxley Maquiladora
HUXLEY MAQUILADORA
Problem Statement:
Steve Phillips, head of the Huxley Maquila project team, had to make a
suggestion about moving production to Mexico. After six months of investigation, a final report outlining the results was prepared and was given to Steve. His job now was to give some recommendation to board of directors about whether to establish the manufacturing plant in Mexico and if so, where and how.
Sub-Problems/Issues:
• Increase in knowledge intensity of defence product, resulted in higher development costs. In other words, these rising costs are results of advanced technological complexity of almost all types of military system, and to the rapid pace of technological innovation. • Higher costs of research and development (R&D) for each generation of weapons caused absolute costs to rise. Now even largest multidivisional firms are incapable of funding R&D itself. • There is a high turnover rate among the workers, even after training. This is because, to master the skills, workers need high patience and physical strength and they have to work with metals all the time which makes this job very unattractive.
•
Moreover, there are very unsafe working conditions and to some extent, sexual harassment.
Urgency:
Decision must be made quickly in order to reduce the costs (such as
wages, raw materials etc.) and to increase the revenues for the next year.
Impact:
• • • It will affect the company’s future revenue and costs. It will increase the company’s reputation. It might help in eliminating some of its competitors as Huxley will capture more market share. (both in US and Mexico)
Goal:
The ultimate goal of the company is to create feasibility studies for
operating in Mexico, location and site selection and appraisal of various entry needs. In other words, they want to reduce their costs and want to increase their revenues. Besides launching and managing a plant in a foreign country will give Huxley managers a
Problem Statement:
Steve Phillips, head of the Huxley Maquila project team, had to make a
suggestion about moving production to Mexico. After six months of investigation, a final report outlining the results was prepared and was given to Steve. His job now was to give some recommendation to board of directors about whether to establish the manufacturing plant in Mexico and if so, where and how.
Sub-Problems/Issues:
• Increase in knowledge intensity of defence product, resulted in higher development costs. In other words, these rising costs are results of advanced technological complexity of almost all types of military system, and to the rapid pace of technological innovation. • Higher costs of research and development (R&D) for each generation of weapons caused absolute costs to rise. Now even largest multidivisional firms are incapable of funding R&D itself. • There is a high turnover rate among the workers, even after training. This is because, to master the skills, workers need high patience and physical strength and they have to work with metals all the time which makes this job very unattractive.
•
Moreover, there are very unsafe working conditions and to some extent, sexual harassment.
Urgency:
Decision must be made quickly in order to reduce the costs (such as
wages, raw materials etc.) and to increase the revenues for the next year.
Impact:
• • • It will affect the company’s future revenue and costs. It will increase the company’s reputation. It might help in eliminating some of its competitors as Huxley will capture more market share. (both in US and Mexico)
Goal:
The ultimate goal of the company is to create feasibility studies for
operating in Mexico, location and site selection and appraisal of various entry needs. In other words, they want to reduce their costs and want to increase their revenues. Besides launching and managing a plant in a foreign country will give Huxley managers a