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Fuyao Glass America Sourcing Strategy

Fuyao Glass America is deciding whether to source automotive glass from their factory in Tianjin, China or Moraine, Ohio to supply a factory in Ontario, Canada. The document compares the total production costs of sourcing from each location, finding that initially Tianjin has lower costs due to lower labor rates. However, costs are expected to equalize as production increases at the Moraine factory. Considering current trade tensions, the group recommends sourcing from Tianjin to reserve Moraine's production for US customers.

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Vaibhav Raj
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2K views10 pages

Fuyao Glass America Sourcing Strategy

Fuyao Glass America is deciding whether to source automotive glass from their factory in Tianjin, China or Moraine, Ohio to supply a factory in Ontario, Canada. The document compares the total production costs of sourcing from each location, finding that initially Tianjin has lower costs due to lower labor rates. However, costs are expected to equalize as production increases at the Moraine factory. Considering current trade tensions, the group recommends sourcing from Tianjin to reserve Moraine's production for US customers.

Uploaded by

Vaibhav Raj
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
  • Introduction
  • Current Scenario
  • Customers
  • Problem Statement
  • Cost Comparison: Tianjin vs Moraine
  • Shipping and Transport Cost Comparison
  • Inventory Cost
  • Total Production Cost Comparison
  • Recommendations
  • Conclusion

FUYAO GLASS

AMERICA:
SOURCING
DECISION

PRESENTED BY :
GROUP 2
ABHINAV AKASH 1810003
ADHISH BHANDARI 1810005
JOYDEEP DATTA 1810026
SACHI KARIWALA 1810042
SONALI GUPTA 1810102
VAIBHAV RAJ 1810107
 Fuyao is the China’s No.1 and World’s No.2
automotive glass Manufacturer with 65% market
share in Chinese Passenger Vehicle OEM and 20%
market share globally.
 Being a highly profitable company ,it is always
welcomed by the local government.
CURRENT  Tianjin,China (One of its Most Modern Plant)
SCENARIO  Fuyao had three factories in U.S :
 Moraine,Ohio (Connected North U.S to South U.S)
 [Link],Illinios (Produced float glass)
 Plymouth,Michigan (Finishing Location and
Distribution Center to serve for customers JIT
supply chains)
CUSTOMERS
 Sourcing Strategy for a new contract to supply
an Ontario,Canada Factory belonging to a
PROBLEM North American Automaker.
STATEMENT  Whether to source from Tianjin,China OR
Moraine,Ohio
COST COMPARISON- TIANGIN VS MORAINE
SHIPPING AND TRANSPORT COST COMPARISON
INVENTORY COST

Assuming weekly inventory carrying cost :


TOTAL PRODUCTION COST COMPARISON

AFTER PRODUCTION INCREASES TO 800 PAIRS AT BOTH THE LOCATIONS


PRODUCTION COST REDUCES AND HENCE THE TOTAL COST ALSO REDUCES.
 We recommend that the the outsourcing should
be done from Tianjin,China Factory.
 Even though total cost for Moraine will be lower
once the labour gets trained and produces 800
RECOMMENDATION material per shift and has 50 workers per line this
S plant should be used to fulfill the needs of US
customers.
 Trade war and volatility in tariffs is another
reason to save the production of Moraine for US
customers.
THANK
YOU

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