Reshoring Manufacturing
Jessica Marczak-6618812
Amanda Medina-6600115
Mahesh Sharma
Section J
Case Study
Case A: Reshoring Manufacturing: Coming Home
Q A1: If you are the Chief Supply Chain Officer (CSCO) of a manufacturing company, what are the three major factors that you would argue to convince the Board of Directors in support of moving manufacturing back to Canada? Justify your answer.
As the Chief Supply Chain Officer of a manufacturing company, the three major factors of moving manufacturing back to Canadawould be: the excess costs, the quality flaws as well as the distance between the manufacturer and the company.
Costs:
Initially, businesses outsourced their production mainly because labor was cheaper in Asia. However, according to the International …show more content…
Labor Organization, labor wages have increased by 7.1-7.8% between 2000 and 2008 in Asia, while costs in America only increased by 0.5-0.9% (The Economist, 2013). So, considering that wages in China now either match or exceed those of America, it would be more beneficial to reshore production in Canada. This would help restore the American economy while decreasing transportation fees and avoiding additional costs due to potential delays. For instance, Sleek Audio, a high-end earphone company was severely affected by delivery delays from China, which cost the company millions of dollars (Koerner, 2012).
Quality:
More recently, the rising costs of labor in China are making companies rethink their production strategies (Koerner, 2011).
A survey, conducted in January 2010 by the consulting firm Grant Thornton, resulted in 44% of respondents feeling that they received no benefit from outsourcing overseas. Additionally, 7% of them felt that offshoring caused damage to their company. The problem mainly arose from the fact that China has a large demand for outsourced production. In other words, China prioritizes their biggest clients and consequently, the factories put less effort into assembling products for smaller companies (Koerner, 2011). Although manufacturing production in Canada would incur slightly higher costs, businesses would be able to monitor the quality of their products more easily. In addition, many Chinese factories have started to subcontract their work to other factories in the western and central areas of the country at ever lower wages. In other words, production is being handed over to subcontracted employees who did not receive the same training as the employees from the primary manufacturer. As a result, the company does not receive the quality of product that they expect, and more often than not, lose a great deal of money (Koerner,
2012).
Distance: Distance between a company and the manufacturer will always remain the biggest issue when outsourcing production. First of all, shipping costs from China to Canada can be a very large expense to a company. They also need to consider the foreign exchange rate, which maybe also make the company lose money. A McKinsey study found that outsourcing production was beneficial to companies until five years ago, in 2008, where results showed that “the former offshore savings have turned negative—a burden of an extra $16” (Koerner, 2012). Secondly, the physical distance between a company and the manufacturer can cause issues in the sense that there is always a possibility that shipments will not be delivered on time, as well as communication problems due to the different time zones. In brief, shortening the distance between the company and the manufacturer is always more beneficial because by having everyone involved in the production process closer together, “this increases collaboration and problem solving and shortened development time” says Kevin Nolan, GE Appliances’ vice president of technology (Koerner, 2012).
Case B: Hospitals turn to Internet to fight emergency room wait times
Q-B1: Discuss the major reasons for long wait times in emergency departments compared to other departments in hospitals?
There are several steps that a patient must go through before they are seen by a doctor. These series of steps are called the “patient flow”, which includes the first consultation with a nurse to assess the urgency of the patient’s condition, registration, consultations and any further treatments. A delay in any one of these steps can cause longer waiting times for patients in the emergency rooms (A Strategy to Reduce Emergency Department Wait Times, 2012).
Another major cause of long waiting times is that the number of staff members and their schedules is not in sync with the number and timing of patients entering the emergency room. Hospitals encounter situations in which there is a patient with a severe illness, which may require more than one doctor. Considering the lack of doctors in hospitals, this is a major factor influencing waiting times in emergency rooms. Also, if supplies and equipment are not properly placed, this will cause another delay since the doctor will be spending unnecessary time getting their tools, rather than spending valuable time with their patient (A Strategy to Reduce Emergency Department Wait Times, 2012).
When patients enter the emergency room, their diagnosis is yet to be determined, whereas other departments that are specialized in certain health cares already know how to treat the patient. Those departments can also give appointments to patients, making waiting not an option. For example, a patient who is already diagnosed with cancer will schedule weekly appointments to see the doctor for checkups and chemotherapy sessions.
Finally, external factors can also affect the waiting times in emergency rooms. First of all, having a permanent family doctor is very hard to acquire nowadays. Therefore, people’s first instinct is to rush to the hospital to get taken care of regardless of the severity of their issue. Second of all, since medical clinics are not open late on weekdays, and simply closed on weekends, people are only left with the option to go to the emergency rooms and wait in long lines to be seen (A Strategy to Reduce Emergency Department Wait Times, 2012).
Q-B2: Do you agree that Internet can help reduce long wait times in emergency departments? Describe and comment on some of the remedial measures that you would recommend to deal with the problem of long waiting times in emergency departments?
The Internet is a great tool to help track waiting lines in emergency rooms. It gives easier access to patients to see how long they need to wait without having to make that extra drive. Since there is more than one hospital implementing this project, patients can choose from four different hospitals, either based on their proximity to the hospital, wherever there is the shortest waiting time or the urgency of their issue.
However, it can also have some disadvantages. If a person is suffering from a heart attack and decides to go to the hospital with the shortest waiting time, it might be fatal to their health (Blackwell, 2012). Another issue would be how the staff would react to the entire situation. In order to impress their superiors, they would see each patient as quickly as they could, in order to reduce long waiting times. As a result, this could have a negative impact on how the patient is treated.
There are some measures that could be put into place in order to avoid long waiting times. For instance, you can never have enough doctors; therefore hiring more would do no harm to the society. It is always better to have more than not enough. Another solution would be to keep some clinics open late and on the weekends. It would give the society an opportunity to choose between the hospital and the clinic depending on the severity of their issue.
In order to maximize efficiency in emergency rooms, it would be best to create a schedule that matches the volume of patients in the waiting rooms. Also, the staff working needs to be diversified in order to satisfy different types of patients. This will ensure that each patient is treated based on their specific issue. For instance, the nurses working should be able to help treat the patients with less urgent matters. (A Strategy to Reduce Emergency Department Wait Times, 2012). However, less urgent cannot be mistaken with unimportant: some patients do not necessarily need a hospital bed and can be treated a lot faster, which saves the patient’s time as well as the doctor’s time.
References:
A Strategy to Reduce Emergency Department Wait Times in Newfoundland and
Labrador. (2012). Retrieved April 10, 2013, from ealth.gov.nl.ca/health/wait_times/emergency_department_strategy.pdf
Blackwell, Tom. Hospitals turn to Internet to fight emergency room wait times.
(2012 April 17).Retrived April 10, 2013 from ionalpost.com/2012/04/17/hospitals-turn-to-internet-to-fight-emergency-room-wait-times/
Coming home. (2013). Economist, 406(8819), 6-9.
Koerner, B. I. (2011). Coming Home. Saturday Evening Post, 283(5), 56-60.
Amanda Medina-6600115
Mahesh Sharma
Section J
Case Study
Case A: Reshoring Manufacturing: Coming Home
Q A1: If you are the Chief Supply Chain Officer (CSCO) of a manufacturing company, what are the three major factors that you would argue to convince the Board of Directors in support of moving manufacturing back to Canada? Justify your answer.
As the Chief Supply Chain Officer of a manufacturing company, the three major factors of moving manufacturing back to Canadawould be: the excess costs, the quality flaws as well as the distance between the manufacturer and the company.
Costs:
Initially, businesses outsourced their production mainly because labor was cheaper in Asia. However, according to the International …show more content…
Labor Organization, labor wages have increased by 7.1-7.8% between 2000 and 2008 in Asia, while costs in America only increased by 0.5-0.9% (The Economist, 2013). So, considering that wages in China now either match or exceed those of America, it would be more beneficial to reshore production in Canada. This would help restore the American economy while decreasing transportation fees and avoiding additional costs due to potential delays. For instance, Sleek Audio, a high-end earphone company was severely affected by delivery delays from China, which cost the company millions of dollars (Koerner, 2012).
Quality:
More recently, the rising costs of labor in China are making companies rethink their production strategies (Koerner, 2011).
A survey, conducted in January 2010 by the consulting firm Grant Thornton, resulted in 44% of respondents feeling that they received no benefit from outsourcing overseas. Additionally, 7% of them felt that offshoring caused damage to their company. The problem mainly arose from the fact that China has a large demand for outsourced production. In other words, China prioritizes their biggest clients and consequently, the factories put less effort into assembling products for smaller companies (Koerner, 2011). Although manufacturing production in Canada would incur slightly higher costs, businesses would be able to monitor the quality of their products more easily. In addition, many Chinese factories have started to subcontract their work to other factories in the western and central areas of the country at ever lower wages. In other words, production is being handed over to subcontracted employees who did not receive the same training as the employees from the primary manufacturer. As a result, the company does not receive the quality of product that they expect, and more often than not, lose a great deal of money (Koerner,
2012).
Distance: Distance between a company and the manufacturer will always remain the biggest issue when outsourcing production. First of all, shipping costs from China to Canada can be a very large expense to a company. They also need to consider the foreign exchange rate, which maybe also make the company lose money. A McKinsey study found that outsourcing production was beneficial to companies until five years ago, in 2008, where results showed that “the former offshore savings have turned negative—a burden of an extra $16” (Koerner, 2012). Secondly, the physical distance between a company and the manufacturer can cause issues in the sense that there is always a possibility that shipments will not be delivered on time, as well as communication problems due to the different time zones. In brief, shortening the distance between the company and the manufacturer is always more beneficial because by having everyone involved in the production process closer together, “this increases collaboration and problem solving and shortened development time” says Kevin Nolan, GE Appliances’ vice president of technology (Koerner, 2012).
Case B: Hospitals turn to Internet to fight emergency room wait times
Q-B1: Discuss the major reasons for long wait times in emergency departments compared to other departments in hospitals?
There are several steps that a patient must go through before they are seen by a doctor. These series of steps are called the “patient flow”, which includes the first consultation with a nurse to assess the urgency of the patient’s condition, registration, consultations and any further treatments. A delay in any one of these steps can cause longer waiting times for patients in the emergency rooms (A Strategy to Reduce Emergency Department Wait Times, 2012).
Another major cause of long waiting times is that the number of staff members and their schedules is not in sync with the number and timing of patients entering the emergency room. Hospitals encounter situations in which there is a patient with a severe illness, which may require more than one doctor. Considering the lack of doctors in hospitals, this is a major factor influencing waiting times in emergency rooms. Also, if supplies and equipment are not properly placed, this will cause another delay since the doctor will be spending unnecessary time getting their tools, rather than spending valuable time with their patient (A Strategy to Reduce Emergency Department Wait Times, 2012).
When patients enter the emergency room, their diagnosis is yet to be determined, whereas other departments that are specialized in certain health cares already know how to treat the patient. Those departments can also give appointments to patients, making waiting not an option. For example, a patient who is already diagnosed with cancer will schedule weekly appointments to see the doctor for checkups and chemotherapy sessions.
Finally, external factors can also affect the waiting times in emergency rooms. First of all, having a permanent family doctor is very hard to acquire nowadays. Therefore, people’s first instinct is to rush to the hospital to get taken care of regardless of the severity of their issue. Second of all, since medical clinics are not open late on weekdays, and simply closed on weekends, people are only left with the option to go to the emergency rooms and wait in long lines to be seen (A Strategy to Reduce Emergency Department Wait Times, 2012).
Q-B2: Do you agree that Internet can help reduce long wait times in emergency departments? Describe and comment on some of the remedial measures that you would recommend to deal with the problem of long waiting times in emergency departments?
The Internet is a great tool to help track waiting lines in emergency rooms. It gives easier access to patients to see how long they need to wait without having to make that extra drive. Since there is more than one hospital implementing this project, patients can choose from four different hospitals, either based on their proximity to the hospital, wherever there is the shortest waiting time or the urgency of their issue.
However, it can also have some disadvantages. If a person is suffering from a heart attack and decides to go to the hospital with the shortest waiting time, it might be fatal to their health (Blackwell, 2012). Another issue would be how the staff would react to the entire situation. In order to impress their superiors, they would see each patient as quickly as they could, in order to reduce long waiting times. As a result, this could have a negative impact on how the patient is treated.
There are some measures that could be put into place in order to avoid long waiting times. For instance, you can never have enough doctors; therefore hiring more would do no harm to the society. It is always better to have more than not enough. Another solution would be to keep some clinics open late and on the weekends. It would give the society an opportunity to choose between the hospital and the clinic depending on the severity of their issue.
In order to maximize efficiency in emergency rooms, it would be best to create a schedule that matches the volume of patients in the waiting rooms. Also, the staff working needs to be diversified in order to satisfy different types of patients. This will ensure that each patient is treated based on their specific issue. For instance, the nurses working should be able to help treat the patients with less urgent matters. (A Strategy to Reduce Emergency Department Wait Times, 2012). However, less urgent cannot be mistaken with unimportant: some patients do not necessarily need a hospital bed and can be treated a lot faster, which saves the patient’s time as well as the doctor’s time.
References:
A Strategy to Reduce Emergency Department Wait Times in Newfoundland and
Labrador. (2012). Retrieved April 10, 2013, from ealth.gov.nl.ca/health/wait_times/emergency_department_strategy.pdf
Blackwell, Tom. Hospitals turn to Internet to fight emergency room wait times.
(2012 April 17).Retrived April 10, 2013 from ionalpost.com/2012/04/17/hospitals-turn-to-internet-to-fight-emergency-room-wait-times/
Coming home. (2013). Economist, 406(8819), 6-9.
Koerner, B. I. (2011). Coming Home. Saturday Evening Post, 283(5), 56-60.