1. What are the underlying forces that led to K&S’s desire to make changes to its current supply chain network?
The underlying forces that led K&S’s need to make changes to its current supply chain network are because of the cheap labor. The geographical movement in the electronics manufacturing industry to Asia and other Pacific nations has implied that organizations have needed to update their inventory Network. With clients moving to Asia, and new markets opening up, numerous K&S contenders have as of recently put resources into new destinations.
By examining figure 2 (semiconductor equipment spending by geographic region) it is obvious that the Asia-Pacific using on Semiconductor supplies is expanding year on year, and outpaced…show more content… By finding diverse parts of the business (e.g. R&d and manufacturing) on the same site, it implies utilities and different administrations could be imparted bringing about easier working expenses. There nearby information of business, laws, and supplier system and the dependability of the workforce are again figures that make Israel's plant an alluring choice for K&s.
While original set up charges are low, with the Israel’s excessive taxes, and with an average hourly wage of $10.78 this would badly affect long-term profitability.
Even thou there are many advantages to gain from the opportunity of developing K&S expand current operations in Israel, there are also issues that cannot be ignored that could affect the long-term profitability of growing existing operations. One of the major critics of having a location in Israel is the tax load. This added up to be 43% of Gross Domestic Profit (GDP) in the year 2000.
Israel has a generally advanced, robust foundation; nevertheless it is not ensured that this site could logistically supply a worldwide market. Its vicinity to market is sufficient to supply the European and US market in the future yet with a specific end goal to exploit the developing Asia-Pacific business, K&S necessity to grow operations in an area that will empower them to develop with the business sector, spot inside close proximity to clients, suppliers and to stay intense inside the commercial
