Global Production
Location
Global production is a concept that refers to the network of interlinked functions, transactions, and processes via which a particular service or product is produced, consumed and distributed (Coe & Yeung, 2019). Pied-Piper is a global company that deals with the manufacturing of textiles and garments. In the case of Pied-Piper, production should be located in Bangladesh. This is due to the availability of low wages making the location ideal for the labor-intensive process. Due to the nature of the products being manufactured, production should be concentrated and not dispersed. In other words, the production facilities should be located in one geographical location.
Long-term Strategic Role
The long-term strategic function of the production site is to create new products through environmentally friendly processes, thereby guaranteeing that Pied-Piper achieves sustainability in the long run. The company will have to relinquish a foreign site if factor costs change. This is because the textile industry relies on the affordability of the factor costs to ensure that the business generates revenues. The company cannot realize the value of maintaining the operations when economic conditions change.
Ownership of Foreign Production
It is economical for the company to outsource production. This is because, in Bangladesh, labor is cheap and duties and tariffs are the primary motivations for moving production offshore. Owning overseas production is a costly endeavor for a business that seeks to minimize operational costs.
Globally Dispersed Supply Chain
A globally distributed supply chain will be managed using supply chain software. This will facilitate the tracking and management of inventory, process orders, and manage suppliers. The right software will give the company a bigger picture of how things are running within the supply chain.
Management of Logistics
The company will both outsource and maintain the management of logistics. Outsourcing foreign production management will help the company transition in an overseas location. Part of the company’s management in Bangladesh will be from the parent company. This is to ensure that the company maintains its culture.
Reference
Coe, N. M., & Yeung, H. W. C. (2019). Global production networks: Mapping recent conceptual developments. Journal of Economic Geography, 19(4), 775-801.