Production and Operation Management in Pharmaceutical Manufacturing: Relocation Analysis from Canada to the United States
Overview
This paper analyzes whether a pharmaceutical manufacturing company should continue operations in Canada or relocate to the United States following NAFTA's impact on the industry. The analysis examines production costs, labor expenses, relocation feasibility, and market conditions in both countries to provide a comprehensive decision-making framework for the company's strategic operations management.
What this coursework covers
- Introduction and impact of NAFTA on Canadian pharmaceutical manufacturing
- Factors to consider before company relocation decision
- Analysis of US pharmaceutical market conditions and growth projections
- Estimated transportation costs from Toronto to United States locations
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Effective and Efficient Production and Operation Management
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Effective and Efficient Production and Operation Management
Since the 1990s, the pharmaceutical industry has undergone numerous changes. For instance, the NAFTA “North American Free Trade Agreement” impacted the Canadian pharmaceutical manufacturing industry significantly. After removing the trade barriers, NAFTA started questioning whether it was cost-effective to continue producing the pharmaceutical commodities in Canada with increased taxes and labor costs. Moreover, the facility was situated at 245 land acres. It neared a prime residential center and was in the Lake Ontario mile outside Toronto. The 245 land acres had been purchased at $7,000,000. Therefore, the following is an analysis of whether the manufacturing company should continue operating in Canada or relocate to the United States. As such, research is provided on the projected transportation cost to Toronto from Colorado. Also, an analysis of the effect of stopping the company’s operation in Canada is provided.
Should the Company Continue Functioning in Canada?
Before the company decides to move to the United States, some facts should be considered. For instance, the company should consider the demand and production gap in the United States because it consists of displacing the machinery and reassembling them in the United States. Also, the company will be required to stop producing its drug in Canada. Furthermore, the company should consider whether it has much stock that fulfills the demand.