MGT Group: Reconstructing the Supply Chain After a Cross-border Factory Relocation
Established in 1945, MGT Group was headquartered in France. Its LSD factory was a well-known global engineering provider specializing in the design and manufacture of high-precision valves. At the end of 2007, MGT decided to close the LSD factory in France and relocate it to Fuzhou, China. Two people were put in charge of this project: Kevin Lurton, vice chief operations officer of MGT Control Systems Division, and Jian Li, the general manager of MGT Fuzhou Company. Lurton and Li faced a series of challenges, ranging from the need for strategic planning to the need for an implementation policy for supply chain reconstruction during the cross-border factory relocation.
Collection: Ivey Business School (Canada)
Ref: IVEY-9B11D009-E
Format: PDF
Number of pages: 15
Publication Date: Sep 19, 2011
Language: English
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Description
Established in 1945, MGT Group was headquartered in France. Its LSD factory was a well-known global engineering provider specializing in the design and manufacture of high-precision valves. At the end of 2007, MGT decided to close the LSD factory in France and relocate it to Fuzhou, China. Two people were put in charge of this project: Kevin Lurton, vice chief operations officer of MGT Control Systems Division, and Jian Li, the general manager of MGT Fuzhou Company. Lurton and Li faced a series of challenges, ranging from the need for strategic planning to the need for an implementation policy for supply chain reconstruction during the cross-border factory relocation.
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Year: 2007
Geographic Setting: China
Industry Setting: Manufacturing;
Learning Objective
As a result of globalization, multinationals are able to extend their influence to every corner of the world. Whether for the purpose of cost control or new market development, many global companies have come to regard transferring mature product lines, even a whole factory, to another country as a vital step in achieving their internationalization strategy. China, as a large country for both production and consumption, has become a destination of factory transfers for many well-known multinational companies. During the transfer process, the supply chain typically undergoes a drastic change, for both the old and new owners. Constructing a new supply chain in the context of economic globalization has become a common challenge, revealing many operational and management issues in the manufacturing industry and beyond in China.
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