Product details

Operations network design is about where to locate your supply sources and manufacturing and distribution operations, as well as the deployment of such operations, ie, who should be supplying whom. With the emergence of global supply and manufacturing sources and the global market, such a design will increasingly have to span multiple regions. In the design, we have to capture the quantitative impacts of such factors like fixed and variable costs of production or distribution facilities, inventory, freight, and other logistics costs. The global network requires explicit treatment of taxes, customs and duties. This case is about Renault''s recent car Logan, which was designed to serve markets in emerging markets like Eastern Europe, North Africa and the Middle East. The company has designed its supply chain to take advantage of the special customs and duties treaties in these regions. The case illustrates the complexities of such design decisions, and the approaches one needs to take. The case also ends with a key decision that Renault has to make - how to set up the supply chain for the new market in South Africa. Again, the customs and duties implications play a big role in such a decision.This case is designed to expose students to the importance and complexities of customs and duties in designing a supply network, to illustrate some of the trade agreements that could exist within trading pacts, between countries, and between a country and a company, to serve as a means to learn more about some new and emerging markets, such as Eastern Europe, Africa and the Middle East, and to see how the design of a supply network must be coupled with the product structure of the product (ie, the sites for building the key component, the final assembly site, and the markets).