Hurbank plc report

Hurbank is a long established British producer of luxury clothing and accessories.At the start of 2008, Henry,who is the Chief Executive in this company,was asked by Board of Directors to consider cutting costs by relocating Hurbank plc's shirt production from cell ton, in the north of England, to China. In this case study, they give us some data which I will analyse below.

From Appendix A, it seems like the cost of Cell ton factor is more than the benefits. Because according from this data, it shows the trade union membership is 80% of all employees which means trade union is very powerful, this is a good thing for the workers, but I do not think it is good for their boss, because if the power of trade union is very strong, the boss of this company may spend more on them, for example they may ask boss for higher wage or higher work condition and so on. But in this appendix also has a benefit which is the labour productivity compare to five years ago is 40% more, which means they may get more profit. However, overall of this appendix, I do not think Cell ton factory will cut the cost, and also this might be the cause of why they want to relocation of their factory.

let's have a look Appendix B. In this appendix it shows Unemployment in the region of the factory in China is 14% which is very high and that is good for Hurbank to recruit those people with lower price. there is a data shows the average annual pay within Chinese region is 2000 pounds which is very low. in another hands it shows forecasting percentage of shirts returned by customers due to defects if factory is basedin China is 1%, this is a good news 1% is quite low. However, forecasting lead time to retailers is 4 weeks which is take a long time and I do not think retailers want to wait their supplier for a long time. Also the exchange rate of pounds will decrease 18% which means Hurbank will loss some money when they exchange their money to Chinese currency.

Anyway In appendix C, it shows Hurbanks plc get more revenue than before which is a good news and it tell us relocating in China help them save money and get more revenue. these graphs shows in another page approve this point. In appendix D and E are shows the revenue goes up if they relocate the factory in China.

Overall, I think if the company relocate the factory in China they will save a lot of money on employees, land, material, and so on which means they will get more revenue. But before they relocate it , they should do more research to prove if this decision is right or not.