An exploratory analysis of the impact of global telecommunications on electronics manufacturing site selection

Abstract

The increased cost of doing business domestically and the impact of global competition are two reasons companies establish plants in foreign locations. To have a successful global business, manufacturers must have an effective global supply chain infrastructure, which requires effective information technology. Firms now routinely consider remote domestic and international locations when evaluating potential sites. Many factors must be considered when choosing the right location for manufacturing facilities. These include: physical infrastructure, proximity to suppliers and customers, tax considerations, international trade conditions, and as this research explored, telecommunications infrastructure. This study examined the degree to which the telecommunications infrastructure impacts the decision to select a specific foreign manufacturing site for the organisation. The results of four case studies of electronics firms indicated that telecommunications is a necessity to conduct business. Two of the firms indicated that telecommunications was considered in their most recent site selection. Although the other two firms did not overtly consider telecommunications in the site selection criteria, they did indicate that it is critical to the success of the company in a global market.