Kulicke and Soffa Case

Kulicke and soffa case

QUESTION 1

It is manly due to the geographical shift in the electronics manufacturing industry to Asia and other pacific countries. Indeed, Asia-Pacific spending outpaced Europe’s slightly in 2000 and it is expected to keep growing even more over the next few years. With many of their customers moving in Asian countries, there was large opportunities growth there, and and implementing K&S plant there would reduce their supply risk as their hold the largest worldwide market share of wire bonding tools.

Some semiconductor firms began to implement new plant in Asia (for example in Singapore, Taiwan, the Philippines and South Korea) in order to be to be closer to their customers and to take advantage of reduced labor, operating, property and raw material costs.

QUESTION 2

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Since the least incurred costs would be in China, the implementation in China would be the optimal choice.

QUESTION 3

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Here again, since the highest expected profits would be in China, the implementation in China would be the optimal choice.

QUESTION 4

A framework is available for the supply chain design decisions. It is composed by four phases. The first phase is to analyze global competition and internal constraints. The second phase analyses the regional configuration and economic environment (exchange rate, support required, flexibility, regional demand, local specifications) of the location where the company is going to implement. The phases three and four are important in this case because it highlights two very important concepts in the supply chain management: the response time and the costs reduction

Israel’s advantages are: present in Israel for 30 years, thus market experience works and fixed local position; low turnover represents a competitive advantage in terms of labor cost; reduces overhead, do not have to double its costs or pay the transfer or R&D. The disadvantages are the following: tax burden (which represents 43% of GDP) and political and economic turmoil present on the territory.

Jordan’s advantages are: close to Israel, English speaking, low labor cost, high unemployment rate hence many workers available. Disadvantages: there might be some conflict due to different religion beliefs between Israel and Jordan (more than 50% of Jordan’s citizens are Palestinian). This could impede the possibility of sending Israeli workers to train Jordanian employees. Also there are some concerns about whether Jordan would be able to offer advanced communication channels, computerization, manufacturing capabilities, and adequate access to local suppliers