Sher-Wood case Essay
What Motivated Sher-Wood to outsource its Manufacturing to suppliers inside or outside Canada in 2007 and 2011?
In 2007, Sher-Wood outsources the production of PMP 5030 mid to high end wooden sticks to a local provider in Victoriaville, Quebec. The company anticipated that the composite stick business would continue to grow in terms of the volume and profitability. In 2011, they concluded that it would be more advantageous to stay in China from both costs in reduction and R&D standpoint. Due to the fact that Sher-Wood did not have enough latitude to sell the equipment to their subcontractor in Quebec they had to stay in china.
What decision factors changed between 2007 and 2011?
In 2007, Sher-Wood main decision factor was based on the high end composite sticks. They also looked to outsource since demand was high. In 2011, Sher-Wood decision factor was on how to boost their hockey stick sales. They thought they should provide sticks with better quality and better margin for retailers.
Which firm activities would be impacted by offshore outsourcing? How different were these influences between 2007 and 2011?
Offshore activities will impact a firm’s activity by loss of control of activity, supply chain efficiency, reporting/accounting problems, and employee resentment. In 2007, outsourcing played a positive role in the firm. Due to the high demand of hockey sticks offshore outsourcing reduce cost and increase production for more profit. In 2011, because of outsourcing Sher-Wood had to make discussion they had to decide whether they should move the manufacturing of high end composite sticks to their supplier in China. If they decided to do that they will have to deal with a variety of issues.
Should Sher-Wood outsource its remaning manufacturing to China? Will this solve Sher-Wood’s concerns?
I believe that Sher-Wood shouldn’t outsource the remaining manufacturing to China because they would need to move the equipment to China which is very difficult and time consuming because of export regulations. Also if they outsource to China it will affect the employees they have that been with the company for over 30 years and how they will communicate this to the public. I don’t believe outsourcing its remaining manufacturing to China will solve Sher-Woods problems.
What alternatives exist? What are the pros and cons of each?
Sher-Wood has two alternatives, one is to offshore the rest of the products to china and the other alternative is to keep manufacturing some of its products in Canada. Outsourcing will reduce cost but would probably decline sales and affect the employees that have been in the company for over 30 years. Insourcing will maintain the same quality and keep sales the same.