During past decades manufacturing companies started opening new plants and transfer their manufacturing to other countries in order to increase their competitiveness in the market. An important area in today’s complex business environment became manufacturing location decisions that have a direct impact on companies’ future success. Many scholars introduced suggestions in what factors should be considered in manufacturing location decisions when opening new plants. However, less research has been done by identifying what critical factors should be considered in manufacturing reallocation[1] decisions when a company operates within a manufacturing footprint and intends to move manufacturing activities between existing plants. In order to fulfil this gap the study was conducted by developing a conceptual framework for supporting manufacturing reallocation decisions. The main factors, evaluation and effects were explored. In order to conduct the study three cases were analysed in two Swedish manufacturing companies, where one of the companies was currently executing a manufacturing reallocation to another plant. It was found that sometimes companies are forced to reallocate manufacturing unwillingly due to currency value changes or local governmental regulations. A tendency was noticed that some of the factors are considered at the strategic level and some are left to be handled at the operational level. However, operational level factors have a great impact on the long term strategy and future costs and should be included when making manufacturing reallocation decisions. The evaluation of factors is mostly based on assumptions and intuition. Only evaluations of economic factors are based on facts. Improvements of economic factors’ evaluations could be made by closer collaboration between plants and involvement of the right people at the right time during data collection before making a decision. Manufacturing reallocations could have effects on the sending plant and long term strategy that increases the importance to include it during decision making since hidden costs and future risks could be prevented. Finally, the conceptual framework for manufacturing reallocations is presented that could be used as a support for manufacturing reallocation decisions. [1] to assign or allot to a different place from the one originally intended.

<p>Investments in offshore manufacturing have in a historical perspective been taken as a series of separate decisions with a strong focus on cost reduction. This kind of cost is typically narrowed to the cost of purchase or manufacture. The total supply chain costs are hardly ever considered. Investments need to be reviewed within the context of a company´s total market and manufacturing requirements. This will prevent unwanted issues such as extended lead times, greater buffer stocks and excess capacity, uncoordinated strategic responses, conflicts and the failure to be profitable.</p><p>Alfdex, which is a joint venture owned by Alfa Laval and Haldex, provide the global truck and diesel engine market with its products and is for the moment market leader. The future demand will however exceed their current capacity within five years. To avoid that any decision will be made ad hoc this project will identify some essential factors that are significant for a future expansion of production. This will thereafter be adapted for Alfdex situation to recommend where they should expand their future production based on an objective perspective.</p><p>In this project seven markets will be reviewed; North America, Europe, South America, Russia, China, India, and Asia. The manufacturing footprint refers to where a company geographically locates its production. It is based on a long-term perspective and required reasonable strategic thinking and analysis.</p><p>Four essential factors have been identified which will determine Alfdex manufacturing footprint recommendations; the current situation; the market development and capacity need; the issue of costs; global and local conditions and differences together with the supply chain. In addition a scenario matrix and analysis matrix have been developed to support the analysis.</p><p>This work has shown that the most feasible solution, based on what is known today, is to make an onsite expansion in Landskrona, Sweden. By keeping the production in Sweden Alfdex will meet the most qualifications identified in the manufacturing footprint. Additionally a sales person and technical support are required in North America as well as allocating resources to monitor the Chinese market.</p><p>In this version of the report customers’ and suppliers’ names as well as some figures have been concealed. In some cases the information has been replaced by an <strong>X</strong> and in others it has been completely removed.</p>

Investments in offshore manufacturing have in a historical perspective been taken as a series of separate decisions with a strong focus on cost reduction. This kind of cost is typically narrowed to the cost of purchase or manufacture. The total supply chain costs are hardly ever considered. Investments need to be reviewed within the context of a company´s total market and manufacturing requirements. This will prevent unwanted issues such as extended lead times, greater buffer stocks and excess capacity, uncoordinated strategic responses, conflicts and the failure to be profitable. Alfdex, which is a joint venture owned by Alfa Laval and Haldex, provide the global truck and diesel engine market with its products and is for the moment market leader. The future demand will however exceed their current capacity within five years. To avoid that any decision will be made ad hoc this project will identify some essential factors that are significant for a future expansion of production. This will thereafter be adapted for Alfdex situation to recommend where they should expand their future production based on an objective perspective. In this project seven markets will be reviewed; North America, Europe, South America, Russia, China, India, and Asia. The manufacturing footprint refers to where a company geographically locates its production. It is based on a long-term perspective and required reasonable strategic thinking and analysis. Four essential factors have been identified which will determine Alfdex manufacturing footprint recommendations; the current situation; the market development and capacity need; the issue of costs; global and local conditions and differences together with the supply chain. In addition a scenario matrix and analysis matrix have been developed to support the analysis. This work has shown that the most feasible solution, based on what is known today, is to make an onsite expansion in Landskrona, Sweden. By keeping the production in Sweden Alfdex will meet the most qualifications identified in the manufacturing footprint. Additionally a sales person and technical support are required in North America as well as allocating resources to monitor the Chinese market. In this version of the report customers’ and suppliers’ names as well as some figures have been concealed. In some cases the information has been replaced by an X and in others it has been completely removed.