Investigating relationships between production transfer management and transfer success

What is it about?

Network coordination strategies, such as offshoring and reshoring, are common within production manufacturing networks today. These strategies can be motivated by goals such as pursuing an emergent customer market, accessing new technologies or skills, achieving economies of scale, and reducing production costs. However, the implementation of such strategies - the production transfer process - is known to increase the supply chain risk level, leading for instance, to suboptimal product quality, significant cost overruns or even to factory closings. This paper explores the relationships between risk sources, preventive actions, supply chain disruptions, corrective actions, and losses during production transfers, in order to better understand how to mitigate the supply chain risk. Our findings include: (i) lessons learned about how to mitigate the supply chain risk, from a production transfer from Norway to Spain that we studied and facilitated for a period of over two years, and (ii) frameworks of risk sources, preventive actions, supply chain disruptions, corrective actions, and losses, along with examples from the transfer study. These findings can aid the practitioners in managing production transfers, and in achieving the network coordination goals.

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