Operations Management: Otis Toy Train Company

As a consultant to the Otis Toy Train company I would advise the management group of the opportunities and the threats of doing business and outsourcing jobs to the China based company JLPTC. In order to make a good decision on what is best for the companies’ future all the opportunities and threats of the partner business must be examined. With the full knowledge of who the Otis Toy Train Company is doing business management can then make the best decision for its employs and product.

Some opportunities of outsourcing business to China would be focusing on their business as a whole; focusing on sales, and also focusing on future projects in research and development. The company would also save, as stated in the case, money on manufacturing costs. Being able to save money and focus on sales and the future of the business would also greatly increase the company growth. The company would also benefit from cheaper labor by spending less on training costs and employee benefits. This could make for a healthy future for the company.

There are also many threats or risks that could arise with doing business with another company, especially a company overseas. When doing business with another country you must abide by that country’s banking policies, government regulations, and laws which could create problems for their business model. Outsourcing jobs to China would also effect employee morale at the company. Sending jobs overseas also gives Otis Toy Train Company a poor brand image because, the company no longer looks like an all American company employing American workers. Lastly when giving a supplier control of the business they would be risking their company as whole. If JLPTC fell into debt it would obviously affect the company.

Overall I would advice Otis Toy Train Company to go ahead and send jobs overseas. The savings on labor is too good to pass up and it would continue the company’s growth in the future. Though sending jobs overseas is tough it allows the...