Convergence of Facilities in Low Cost Operation Areas

Convergence of Facilities in Low Cost Operation Areas

Toru Higuchi (Sakushingakuin University, Japan) and Marvin Troutt (Kent State University, USA)
DOI: 10.4018/978-1-59904-555-9.ch015


In this chapter, the convergence of manufacturing facilities is discussed. Very little room is left for the differentiation of products in the late standardized stage. Although companies source globally to reduce the cost, they should cut down their cost even further. In addition, the demand for a product begins to decline sharply at the end of the life cycle because of the saturation of the market or the emergence of alternative products. As a result, companies should make the most of economies of scale in a low cost operation area. Companies converge their manufacturing facilities into low cost operation areas or withdraw completely from the market.

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