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Global plant networks in European multinationals

Author: De Meyer, Arnoud ; van Dierdonck, R ; Vereecke, AnnINSEAD Area: Technology and Operations Management Series: Working Paper ; 96/22/TM Publisher: Fontainebleau : INSEAD, 1996.Language: EnglishDescription: 11 p.Type of document: INSEAD Working Paper Online Access: Click here Abstract: This paper discusses the network of manufacturing facilities in European multinationals on the basis of the "European Manufacturing Futures Survey". It is shown that proximity to the market and low-cost labor are the main drives for establishing a plant abroad, and that access to high quality input factors is the main differentiator in the decision to manufacture abroad. The results indicate that manufacturing companies consider proximity to the market as a logistical advantage, much more than an opportunity for tailoring their products to their markets. Companies that emphasize product leadership attach much importance to the availability of qualified labor in the design of their plant network. Finally, the importance of managing the plant configuration as a tight network of plants is highlighted
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This paper discusses the network of manufacturing facilities in European multinationals on the basis of the "European Manufacturing Futures Survey". It is shown that proximity to the market and low-cost labor are the main drives for establishing a plant abroad, and that access to high quality input factors is the main differentiator in the decision to manufacture abroad. The results indicate that manufacturing companies consider proximity to the market as a logistical advantage, much more than an opportunity for tailoring their products to their markets. Companies that emphasize product leadership attach much importance to the availability of qualified labor in the design of their plant network. Finally, the importance of managing the plant configuration as a tight network of plants is highlighted

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