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Electronics Production | May 12, 2009

Recommendations for rapid production transfer

Relocation of production to low salary countries may not always result in fast profitability. MTEK Consulting has developed a model to streamline the process.
Many contract manufacturers has experienced difficulty in getting profitability when they have outsourced production. The reason why companies have moved manufacturing to other sountries has in most cases been a belief in cost reduction. It often takes much longer than first planned before the move actually generate a cost reduction, due to a variety of cost drivers.

Tord Johnson, MTEC Consulting, describes in the report "Rapid Transfer - A Market Opportunity" the transfer model that the company has developed. The model will ensure production performance, quality and profitability in the removal of production from one factory to another. The model promise profitability within 30 days after the decision of the transfer.

An actual case has shown that 36 products from five customers, for a total value of 4.7 million euro, has been moved while maintaining quality, yeild and profitability in less than eight weeks.

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