Relocation of Industries the Case of the British Car Branch - Term Paper Example

The literature on the global car industry along with the prevalent trends has been presented. Based on the theoretical framework of supplier relationship management, the findings have been discussed and analyzed. The study has revealed that the current downfall can be traced back to the 1950s when the British car industry was unproductive. The industry lacks qualified and technical skills and has been unable to meet competitive pressures. Due to the volatile business environment, the sector did outsource to low-cost countries but was unsuccessful in managing supplier relationships.

They could not follow the Japanese model of maintaining a close but cordial relationship with their suppliers. They tried to impose instruction and started outsourcing simply because the suppliers were willing to share risks. They could not derive the benefit of the transaction cost in relocation. Today the UK is more of an assembly location than manufacturing location. There has been very little investment in research and development in the sector. The study has summarized the findings and after detailing the limitations, has recommended areas of further research.

One of the most common phenomena regarding modern manufacturing activity is the relocation of firms and their establishment in their chosen countries. The current turbulence of the financial area imposes the design and the application of an effective strategy in order for a business to salvage profits. In this context, China, the Middle East, and Mexico have all been popular destinations mostly in the last two decades for the variety of business activities offering the advantage of low wages combining with general low operating costs.

“Britain as a manufacturing nation has been declining for well over 50 years. Britishness in the past has meant made by British people in good conditions in good factories, maybe Britishness in future will refer much more to its design.” (Gustafson, 2007) The British car manufacturing industry issues have become a mediatized problem, the level of large organizational closures and now common relocations have left the UK with an alarming and increasing rate of unemployment. Relocation pertains to outsourcing manufacturing of automotive parts to cheaper locations.

This is the car industry is known as sourcing through suppliers or forming a supply chain network. Supply chain management has immense importance in the car industry and poor management of the network can result in no benefits derived from the strategy for which it was intended.