Question

You work for a company that makes vehicle safety systems, such as radar, on-board cameras, and the ever-present back-up beeper. To reduce costs on your most mature product, the back-up beeper, you are considering moving production out of the United States. You are considering Mexico, Philippines, and Singapore. You are interested in road infrastructure, port infrastructure, technological readiness, and wages. 1. Compare the four countries on these dimensions. Include the United States in your analysis as well as a baseline. For wages, use the Bureau of Labor Statistics’ Foreign Labor Statistics. In particular, use the Index of Hourly Compensation. For the other data, use the World Economic Forum’s Global Competitiveness Report. The bar chart comparison feature is an efficient way to get the information you need.

2. You are also interested in the overall business climate, which you consider to consist of factors like corruption, accounting standards, and a solid legal system. compare the overall level of opacity of each of each of the four countries.

3. What other factors should be considered?

4. What is your recommendation?

Answer 1

1. Road transport remains a key strategic part of Mexico's economy. Centered on a system of 370,000 km of roads that span the nation from north to south and along its two oceanic shorelines, it accounts for 57 percent of freight transport in the country.

The Philippine transport network consists of transport by land, sea, air, and rail. Because of the country's archipelagic nature, water transport plays a significant role, but road transport is by far the largest sub-sector, accounting for 98 percent of passenger traffic and 58 percent of freight.

Singapore: There are 9,081 lane-kilometers of roads in Singapore in 2012, making up 12 percent of Singapore's land. It pushes 78% of freight shipments around the nation.

Maritime network in Singapore is also referred to as the Gateway to Asia. About 5000 companies employ more than 100,000 people. The maritime industry contributes to more than seven percent of the gross domestic product in the region.
The Singapore Maritime and Port Authority (MPA) manages and governs port development in Singapore, operating in conjunction with port operators and shipping firms. Singapore is the busiest port in the world in terms of shipping tonnage, with about 140,000 vessels arriving at the Singapore port every year. New mega-post Panamax quay cranes have been pressed into operation for the biggest container vessel, the Emma Maersk, at the Pasir Panjang container terminal.
Singapore is one of the world's most important bunkering ports, with almost 30 million tons of bunkers being raised annually. Pilot level, towage, freshwater supply, crew changes, ship supplies, and slop disposal are other essential marine resources available. Singapore is the third-largest petrochemical refiner in the world and runs Southeast Asia's most technically sophisticated and productive shipbuilding and ship repair plant.

As per the competitiveness of the countries, Singapore stands at the highest position of 84.8. So, if everything is considered, then Singapore will be the best option to set up a manufacturing plant.

2. Considering the overall business climate, I believe Singapore is still the best option because of the presence of a stable and corruption-free government. Mexico ranks the lowest among the countries on the scale of corruption and the Philippines just 5 positions above Mexico. The recent development from the Philippines, and the current government is very much less reluctant to develop a corruption-free government.

3. Other factors to be considered are the culture of the country. Their loyalty to the work. Education level. Japan is considered a country where people work for 14 hours whereas countries like the US have a work shift of a maximum of 9 hours. This shows that Japan was a very much work-centric population whereas US doesn't. These are some factors that are to be considered while outsourcing manufacturing.

4. My recommendation are to setup manufacturing in the Singapore.