Manufacturing

Fitting China into the global footprint

Definition of manufacturing and R&D activities in China for leading medical device manufacturer

Challenge

Due to increased global as well as local Chinese competition, our client wanted to strategically examine its manufacturing and R&D activities in China. Furthermore, it wanted to leverage its China activities as a global manufacturing and R&D base.

Approach

Our decision logic for defining the Chinese activities followed a competency-based approach (“what capabilities should we master?”) instead of a traditional product based approach (“what components should we have?”). We defined our client’s current and potential future competencies and assessed their “China fit”, i.e. whether or not they make sense to develop in China. This “China fit” assessment was based on competitive advantage and availability in China of the competency. We then linked our client’s current and planned manufacturing and R&D projects back to the competencies embedded in them and assessed the “China fit” of concrete products and R&D projects. Finally, we created an executive decision support tool to determine what activities make the best sense to develop and manufacture and their associated cost savings in China.

Value

Our competency-based approach kept our client from making the common mistake of looking at China merely as an off-shore destination for otherwise unprofitable business and avoided a possible China nightmare. Furthermore, our tool enabled the top management to decide on localisation of any product/services within 15minutes with only a 3 per cent average deviation against a resource consuming full-fledged business case calculations

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