Due to a saturated production in the Romanian factory Mioveni of Renault-Dacia, Renault decided to open its brand new offshored factory in Tanger, Morocco in February 2012.
The aim was mostly about Profitability and Productivity.
Indeed, the production’s capacity was going down in France, for instance Douai produced 418,000 units in 2005 against 177,000 units today. The French brand gambled €1.1 billion to design its factory to last 100 years.
Tanger’s factory produced 200,000 cars in 2014 and will be able to produce about 340,000 per year in the next few years.
Thanks to this increase in production, it generated employment in both countries, and it has no impact on the employment in France. On the contrary, some specific components and parts of the car, which required a high level of knowledge, are still “Made in France” to be assembled in Tanger. And given the higher need of spare parts, it traduces more workforce need as well.
On the other hand, the cost of production for one car in Morocco is about €800 and the average salary represents about €350/month, against €1,100 in France, where it would not have been possible to produce a low cost car.
Moreover, thanks to partnership between Morocco and France, Renault will gain financial advantages, in fact all the profit generated by Tanger’s factory will be repatriated in France.
Finally, Morocco has been chosen strategically: the country, geographically close without language barrier and with a good political and economic stability, is positioned as a Hub of international investments and Africa is presented as the next potential market for Europe. “The continent will double its population in the next four decades and will represent one of the biggest workforce power with India in 2040”.
1- Those advantages of offshoring which became drawbacks
2- Relocation, a responsible and profitable action
3- The future of a business model which falls whithin a policy of sustainable development
Globalization has enabled the worldwide extension of the market economy. People, companies, countries are inter-connected. Information is very accessible and quicker. Furthermore as we are global network, local problems mean global repercussion.
We are in 2030, and the conflict opposing Russia to Ukrainia broke all the economic interactions between Europe and Russia. In this context, due to our dependence, Europe has to find an other gas supplier or discover a new resource to cover up this lack of energy. Moreover, this conflict has generated an embargo modifying transport lines and costs, creating new supply needs and deleting existing exports to Russia.
As Supply Chain Managers and Purchasers we have to cope with this issue. For instance, we have to source new gas markets such as Canada and to rethink about all the procurement process. How to get the gas from the production to the final supplier at the best quality- price ratio? Moreover, we also have to think about doing business with other countries such as Iran (second world largest producer) taking into account cultural differences, being easy-flexible, mobile, being aware about laws, and regulations.
What’s more, we are asked to be fair and ethical in our work: purchasing responsibly, respecting workforce, organizing transport and carrying goods ecologically.
Those criteria are at the core of our supplier’s process selection; the price is no longer the most important aspect of the negotiation.
Due to our multicultural background, our flexibility, and our reactivity, we have the ability to face those issues and work in a world which is evolving constantly.