Making the Most of Foreign Factories

By: Kasra Ferdows

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Synopsis: Many companies are not tapping the full potential of their foreign factories. They establish and manage foreign factories to benefit only from tariff and trade concessions, cheap labor, capital subsidies, and reduced logistics costs. They therefore give these factories a limited range of work, responsibilities, and resources. But there are companies that expect much more from their foreign factories and, as a result, get much more. They use them to get closer to their customers and suppliers, to attract skilled and talented employees, and to create centers of expertise for the entire company. The author provides a framework to help managers classify the current role their foreign factories play.