Manufacturing strategy and operations - Essay Example

The adoption of this approach has a number of benefits to an organisation and the overall consumer satisfaction. In analysing this option of production, the paper will provide a case study of Nike, a company that has operated sweatshops in various parts of the world including Asia and South America. The benefits of this geographically distant manufacturing strategy adopted by the company will be evaluated in line with the principles of this approach. Geographically-distant low cost manufacturing impacts on global customer service expectation The current crave with geographically-distant low manufacturing location has led to the emergence of manufacturing units in china and other countries.

This is attributed to the low cost of labour and materials in these countries, which lead to production of low cost goods. Through this approach of manufacturing, a number of organisations have significantly increased production of low cost goods and services, which has affected positively on the overall costs of the product (Tengstam, 2008). Nike through its units in Asia and other parts of the world where the cost of labour and materials are low, have increased its production of low cost footwear.

As one of the largest manufacturers of sports footwear in the world, the company has improved its global customer satisfaction through 100% outsourcing of its production processes. Through this process, the company focuses on research and development and leaves the engaging processes of manufacturing and large-scale production to offshore-outsourced companies. This ensures that the company presents well designed and consumer taste based footwear, which improves the organisation’s market influence (Kumar, 2001).

One of the open costs of long distance manufacturing processes to customers is the low cost of goods produced due to the low production costs and raw materials. As a company that uses raw materials from china, Indonesia and India, Nike has increased its market control due to the relatively low costs of its products. The intensive cost of installing and maintaining a production unit increases the overall cost of production and this is responsible for increased cost of products in a number of multinationals.

This does not however occur with Nike as it focuses on research and development processes which results into production of high quality-low cost goods. The capital costs of installing more production machinery are thus bypassed and this enables the business to produce low cots footwear and other sport accessories (Harzing, 2005). Nike’s logistic and manufacturing strategy The manufacturing strategy of Nike has remained its core strength and reason for dominance in the global market as it has enhanced its core competiveness.

As an approach that seeks to eliminate initial capital and the need to manage production cost, Nike developed the use of offshore sweatshops operated in Asia and southern America. These contracted companies have the capacity to produce high quality footwear and sports accessories, which enhances its competitive strength in the market. Within these sweatshops in Asia and South America, Nike monitors the production quality and sends expatriates to these factories to manage their production proces