HUMAN RESOURCES SERVICES: Solving Root-cause Employee Relations Issues in U.S. Multicultural Company

HUMAN RESOURCE SERVICES:

Solving Root-cause Employee Relations Issues in U.S. Multicultural Company

HUMAN RESOURCE SERVICES: Solving Root-cause Employee Relations Issues

BACKGROUND

A mid-west U.S. private equity firm retained EWA to address problems in two recently-acquired portfolio holdings with complementary lines of analytical testing equipment products. Along with their U.S. locations, one of the companies had a plant in China, the other in Vietnam.

EWA was asked to conduct an Organization Assessment to validate the issues and their causes, and provide solutions to resolve them.

HUMAN RESOURCE SERVICES: Solving Root-cause Employee Relations Issues

APPROACH

Step 1

Data collection, analysis and recommendations

Performed the Organizational Assessment by conducting 3 group interviews to obtain information in the context of their Core Values, and to get input on what managers perceived as conditions on the floor:

    • Top Management
    • Middle Management
    • First line managers
    • Conducted individual interviews with members of a representative stratified sample of hourly employees
    • EWA team members also made many plant tours to see employees at work and observe their interactions with managers and fellow employees.
Step 2

Implement recommended actions

    • EWA prepared a report to management that included recommendations for improvements. EWA reviewed the report and recommendations with management to get agreement on specific steps and priorities.
    • After joint review, EWA finalized a roadmap for improvement. In addition, EWA helped management establish metrics to measure change in hard issues (productivity, financial results), and soft issues (employee relations, complaints).
Step 3

Measure near-term, mid-term and long-term results

Short Term

    • Reset all branding to new company
    • Improve top down and upward communications
    • Establish and reinforce formal recognition programs
    • Accelerated start to develop more effective supervisory skills

Mid Term

    • Expand ESL classes to improve facility communications and foster better team work
    • Resolve lingering transition issues
    • Improve retention of new hires
    • Develop HR systems
    • Continue to develop more effective supervisory skills
    • Identify and rectify any internal equity issues
    • Develop a meaningful Safety program with accountability

Long Term

    • Study ways to adapt effectively to changes in workforce and labor market demographics
    • Develop innovative approaches to recruiting sources
    • Continue supervisory training and bench strength development
HUMAN RESOURCE SERVICES: Solving Root-cause Employee Relations Issues

RESULTS

Based on the data we gathered, EWA recommended short-term, mid-term and long-term tactics and strategies to address the issues.

    • Created a “One Company/One Culture” environment using the PE firm’s Corporate Core Values as a framework.
    • Suggested resolutions to employee relations issues.
    • Gained consensus with Executive Management on issues, priorities and next steps.
    • Developed metrics to measure progress and to guide clear and open communications.
    • Facilitated implementing solutions to enhance employee cooperation, engagement and participation.
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Establishing Manufacturing & Sourcing in Vietnam

Webinar:

Establishing Manufacturing & Sourcing in Vietnam

Establishing Manufacturing & Sourcing in Vietnam

About The Webinar


Who Should Watch?

Executives of US companies who are facing manufacturing, contract manufacturing or sourcing challenges in China or other countries

Executives of US companies expanding Southeast Asian operational and supply chain capabilities to better service customers


US companies are establishing or relocating to Vietnam for a number of reasons, not the least is diversification from China. Vietnam has become a preferred destination as China labor costs and geopolitical concerns increase, and as US/China tariffs remain.

Vietnam has a significant manufacturing base, which was traditionally focused on textiles, apparel, and furniture.

Vietnam has increased their manufacturing capabilities and are now major producers of consumer electronics, telecom equipment, machinery and auto parts. Samsung produces a third of their total output in Vietnam and is the country’s largest exporter.

East West Associates’ speakers addressed these questions, including:

    • Why – and How – are US companies developing manufacturing, contract manufacturing & sourcing capabilities in Vietnam?
    • What industry sectors are finding sourcing & manufacturing success in Vietnam?
    • What are the advantages of Vietnam as compared to the other ASEAN Countries?
    • What financial & operational incentives does the Vietnamese government provide to US companies to establish operations on leased or owned facilities?
    • How should our investment strategy be designed to best meet the Vietnamese Investment goals?
    • How does Vietnam compare to China & Thailand? Lease rates? Building costs? What are the relative advantages of Vietnamese Business Park options?
    • Can you summarize the Vietnamese/US trade relations and tariff policies?

Our speakers briefly presented two recent case studies:

    • How a Minnesota-based manufacturing client established a Vietnamese contract manufacturing arrangement to diversify from China and service the US market
    • Key experiences of a Michigan-based automotive manufacturing plant for an operational and supply chain audit
Establishing Manufacturing & Sourcing in Vietnam

Speakers

Mark Plum | Director, East West Associates
  • Former President of Briggs & Stratton Asia (NYSE: BGG)
  • VP Sales & Marketing, American Standard Thailand & American Standard China
    Establishing Manufacturing & Sourcing in Vietnam

    Presentation

    Jacob Miller | Director, East West Associates (Vietnam)
    • Former Operations Engineer for Caterpillar
    • Focus in Supply Chain development, procrurement process improvements and facility establishment
    • Currently based in Ho Chi Minh
    Establishing Manufacturing & Sourcing in Vietnam

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    Shifting Manufacturing and Supply Chain Operations to Mexico

    Shifting Manufacturing and Supply Chain Operations to Mexico

    Companies have been sourcing and manufacturing in China for many years and enjoyed low labor rates, reasonable logistical costs, and a large supply chain base. However, the economic business model has changed as companies are looking to “localize” their supply chain and manufacturing closer to their customer base.

    companies servicing US and North American customers are actively working to establish supply chain and manufacturing in Mexico to diversify beyond China.

    The trend to diversify beyond China has been caused by a lot of issues, including significant logistical increases, expanding transit lead times, US/China tariffs, increasing Chinese production costs, Covid travel restrictions, etc.

    As a result, for companies servicing US and North American customers, they are actively working to establish supply chain and manufacturing in Mexico to diversify beyond China.

    For companies that serve Southeast Asian and even Chinese customers, we have seen a similar diversification trend from China to Vietnam and Thailand. Additionally, companies servicing European customers are diversifying to Central Eastern Europe for supply chain and manufacturing, rather than China. We do not expect these trends to slow significantly, even if shipping rates and lead times eventually moderate.

    However, Mexico is not always a replacement for China. It does not have the same abundance of suppliers from multiple different industry sectors. Additionally, Mexican suppliers are currently being overwhelmed by the substantial number of requests from US companies looking to diversify beyond China.

    In many cases, these suppliers are not responding to the large number of quote requests or are providing expensive quotes to determine if the company is willing to accept.

    While Mexico does have good suppliers in specific industries, some components and products from China remain less expensive. Therefore, in our analyses, manufacturers are jointly reviewing the Bills of Materials (BOM) to determine which countries offer the best diversification alternatives, e.g., sourcing some products from Mexico and then, supplementing diversification efforts in Central Eastern Europe and Southeast Asia.

    While Mexico has good suppliers in specific industries, some components and products from China remain less expensive.

    US Automotive Manufacturer Example

    As an example, a U.S. automotive manufacturer asked East West Associates to review their Bills of Materials (BOM). East West evaluated both Mexico-based and Thailand-based automotive suppliers for products shipped to the U.S.

    Thailand was a good and less expensive supply chain source for particular automotive parts not currently produced cost-effectively in Mexico.

    The company would have a long lead time sourcing from Thailand, as they do sourcing from China. However, they will not be paying applicable US/China Tariffs and are less susceptible to the geopolitical challenges between the US & China.

    In this case, the Mexico and Thailand sourcing strategy worked well for the Automotive Manufacturer who need to cost-effectively diversify their supply chain network beyond China.

    EAST WEST ASSOCIATES

    About our Operations in Mexico

    East West Associates seasoned executives are based in China, Southeast Asia, Central Eastern Europe, Mexico and the U.S. We are uniquely qualified to provide pragmatic support to companies that need to diversify their supply chain and manufacturing.

    The East West Associates Mexico team has been operating in Mexico for many years and as a result, they provide on-the-ground support In Mexico. They have the existing business relationships to arrange meetings with Mexican companies, obtain qualified requests for quotes, support the product sampling phase, and develop new Mexican suppliers for U.S. manufacturers and distributors.

    BOI-EV-Charging-Stations

    East West Associates supply chain and manufacturing projects in Mexico include:

      • Supplier identification and qualification of Mexican suppliers, and generation of RFQs to selected suppliers. Industries include automotive parts, automotive aftermarket products, aluminum extrusion, specialty stainless steel, lead-free brass plumbing fixtures, machines castings, injection molded plastics, steel stampings and medical products.
      • Supplier audits of Mexican vendors
      • Background Checks of Mexican suppliers
      • Cost & Feasibility Analyses of establishing operations in Mexico vs. the U.S.

    We are very active in this diversification trend, and have conducted numerous webinars on developing successful Mexican suppliers and manufacturers.

    For assistance with determining if Mexico is right for your company or if you have additional questions, please call or contact us at 704.807.9531 or abryant@eastwestassoc.com.

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    Establishing Manufacturing & Sourcing in Thailand

    Webinar:

    Establishing Manufacturing & Sourcing in Thailand

    Establishing Manufacturing & Sourcing in Thailand

    About The Webinar

    East West Associates Roundtable with Senior Executives


    Who Should Watch?

    Executives of US companies who are facing manufacturing, contract manufacturing or sourcing challenges in China or other countries.

    Why Should You Watch?
    For ideas and guidance to help navigate new business manufacturing and supply chain in Thailand.


    US companies are establishing or relocating to Thailand for a number of reasons, not the least is diversification from China. Thailand has become a preferred destination as China labor costs and geopolitical concerns increase, and as US/China tariffs remain.

    Thailand has a significant manufacturing base and available skilled labor. For example, in 2021 Thailand became the largest motor vehicle-producing country in Asia Pacific, producing 1.9M vehicles.

     

    East West Associates’ speakers will answer questions, including:

    1. Why – and How – are US companies developing manufacturing, contract manufacturing & sourcing capabilities in Thailand?
    2. What industry sectors are finding manufacturing & sourcing success in Thailand?
    3. What financial & operational incentives does the Thai government provide to US companies to establish operations on leased or owned facilities?
    4. How should our investment strategy be designed to best meet the Thailand Board of Investment goals?
    5. How does Thailand labor compare to China & Vietnam? Lease rates? Building costs? What are the relative advantages of Thai Business Park options?
    6. Can you summarize the Thai/US trade relations and tariff policies?

    Our speakers briefly present two recent case studies:

      • How an Ohio-based industrial company successfully established a Thai contract manufacturer relationship
      • Key experiences of a Michigan-based electronics manufacturer when relocating its China-based manufacturing to Thailand
    Establishing Manufacturing & Sourcing in Thailand

    Speakers

    Mark Plum | Director, East West Associates
    • Former President of Briggs & Stratton Asia (NYSE: BGG)
    • VP Sales & Marketing, American Standard Thailand & American Standard China
    Steve Blyth | Nederman Corporation (Thailand)
    • Former Managing Director of Southeast Asia, Nederman Corporation (Thailand)
    • Former Sales & Commercial Director, Volvo Cars (Thailand) Ltd.

    • Currently based in Bangkok, Thailand

    Establishing Manufacturing & Sourcing in Thailand

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    Establishing Manufacturing & Sourcing in Thailand

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    GLOBAL FOOTPRINT SERVICES: GLOBAL EXPANSION (ASEAN)

    GLOBAL FOOTPRINT SERVICES:

    GLOBAL EXPANSION (ASEAN)

    GLOBAL FOOTPRINT SERVICES: GLOBAL EXPANSION

    BACKGROUND

    Global firm needed to increase China/Asia manufacturing capacity. EWA was engaged to develop and implement an Asian Manufacturing Footprint Strategy to drive long-term profitability.

    GLOBAL FOOTPRINT SERVICES: GLOBAL EXPANSION

    APPROACH

    Step 1

    Identifying the expansion criteria

    • Company analysis
      • Expansion criteria: labor supply/costs, government incentives, inflation rates, availability of raw materials, transport & export logistics, supply chain vendor availability
    Step 2

    An in-depth comparative analysis of 6 selected countries

    • Philippines, Malaysia, Indonesia, Vietnam, Thailand & China
      • Expansion recommendation: Thailand
    Step 3

    On the ground interaction

      • Negotiated conditions for property purchase & property management (waste removal, perimeter security, etc.)
      • Negotiated investment incentives with Secretary General of Royal Thailand Board of Investment
      • Qualified local Thai vendors to support the company’s manufacturing location
      • Met with local legal and accounting firms to identify the necessary criteria for establishing a business entity
    Step 4

    Hands-on implementation

      • Property was purchased and all pre-construction permits/licenses/registrations were acquired by October 2017
      • Plant designs, construction budget/timeline & all construction partner contracts were finalized in November 2017
      • Plant construction and equipment installation began in January 2018 and was completed in April 2019
      • Identification and recruitment of supply chain, distribution & logistics partners was completed in February/March 2019
    GLOBAL FOOTPRINT SERVICES: GLOBAL EXPANSION

    RESULTS

    Government Incentives

        • 8 year tax holiday from CIT, 50% tax reduction for an additional 5 years

    Cost Reduction

        • $22.0M tax savings over 10 years
        • $4.3M annual labor savings after 5 years
        • $1.8M annual material savings after 5 years
        • $120/unit average freight savings

    Company Growth

        • 42% increase in sales over 5 years
        • 53% increase in revenue over 5 years

     

    Company Forecast

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