Production Challenges in Least Developed Countries
Abstract
:1. Introduction
2. Production Sites in Least Developed Countries
2.1. Benefits for Companies
2.2. Strategies in Least Developed Countries
3. Proceeding of this paper
3.1. General framework
3.2. Literature Review
4. Production Challenges in Least Developed Countries
4.1. Organizational Challenges
4.2. Technological Challenges
4.3. Product Challenges
4.4. Employee Challenges
4.5. Society & Political Challenges
4.6. Sales & Procurement Challenges
4.7. Conclusion of the Literature Research
5. Case Studies
5.1. “OneDollarGlasses”
5.2. Overcoming the “OneDollarGlasses”-Challenges
5.3. Wallys
5.4. Overcoming the “Wallys”-Challenges
6. Conclusions
Author Contributions
Funding
Acknowledgments
Conflicts of Interest
Abbreviations
GDP | Gross Domestic Product |
MNC | Multi National Corporation |
R&D | Research and Development |
Appendix A
Cluster | Category | Challenge | ∑ | Source |
---|---|---|---|---|
Organization | Corporate | Corporate culture | 2 | [13,17] |
Psychological fear | 1 | [26] | ||
Local corporate management | 1 | [27] | ||
Local competency | 11 | [28,29,30,31,32,33,34,35,36,37,77] | ||
Local partnerships | 2 | [38,39] | ||
Set up duration | 1 | [40] | ||
Distance to main plant | 3 | [29,31,41] | ||
Complexity of decentralization | 1 | [42] | ||
Communication between subsidies and parents | 1 | [43] | ||
Local labor standards | 1 | [44] | ||
Aftersales processes | 1 | [45] | ||
Investment | Investment climate | 8 | [29,36,42,45,46,47,48,66] | |
FDI and longterm effects | 2 | [13,49] | ||
Local financing | 3 | [47,50,108] | ||
Appropriate profits | 3 | [31,51,77] | ||
Strategy | Local competitors | 8 | [6,11,32,44,45,52,53,54] | |
Time of market entry | 2 | [5,26] | ||
Time-to-Market | 2 | [6,55] | ||
Uncertainty of demand | 5 | [31,36,47,54,56] | ||
Small margins | 2 | [38,57] | ||
Market segment | 1 | [16] | ||
Cannibalism effect in the home market | 1 | [53] | ||
Intellectual property rights | 3 | [5,33,54] | ||
Spin-offs | 8 | [16,31,58,59,60,61,62,109] | ||
Economic incentives to adapt products and technology | 2 | [7,29] | ||
Technology | Process | Adequate and low in expedience | 8 | [13,29,54,63,64,65,66,83] |
Flexible in speed, product mix and quantities | 5 | [6,52,55,67,110] | ||
Low in complexity | 2 | [5,38] | ||
Low in effort | 1 | [6] | ||
Robust | 1 | [68] | ||
Avoid tests | 1 | [69] | ||
Fast to ramp up | 1 | [70] | ||
Standardized in process and measurement | 8 | [8,30,34,41,60,64,71,72] | ||
Output depends on the worker‘s skill level | 3 | [46,54,111] | ||
Output depends on technological capabilities | 4 | [46,65,67,73] | ||
Appropriate to local requirements and assembly intensive | 9 | [5,27,29,47,54,57,64,65,90] | ||
Local information system | 4 | [30,36,38,64] | ||
Energy saving | 1 | [74] | ||
Local manufacturing norms and waste reduction | 12 | [6,32,47,49,64,66,68,70,82,89,110,112] | ||
Work safety | 1 | [64] | ||
Productivity | Productivity and performance | 11 | [5,27,35,47,66,71,75,76,77,82,113] | |
High scrap rates | 1 | [67] | ||
Lack of capacity utilization | 1 | [77] | ||
Constant development and improvement | 2 | [13,70] | ||
Investment | Low initial investment | 8 | [8,9,29,39,75,78,90,114] | |
Economic efficiency for small-scales | 3 | [8,54,71] | ||
Environment | Robust against environmental influences | 4 | [27,29,63,79] | |
Sustainability in technology selection | 1 | [74] | ||
Product | Components | Appropriate in costs, function and quality | 27 | [7,16,27,29,30,31,32,36,39,42,45,47,50,52,53,54,57,61,78,80,81,82,83,84,85,91,115] |
Reduction of components | 1 | [86] | ||
Standardization of components | 6 | [8,16,29,64,72,87] | ||
Reduction of resources (financial, material, time) | 9 | [26,27,29,30,38,47,49,51,114] | ||
Involvement of local population | 2 | [38,79] | ||
Local testing | 2 | [79,80] | ||
Consideration of life cycle | 1 | [79] | ||
Plan for reuse | 1 | [88] | ||
Maintenance and spare parts availability | 9 | [27,29,50,58,64,73,89,90,114] | ||
Constant quality improvement | 1 | [6] | ||
Quality assurance | 8 | [3,5,6,29,50,58,67,71] | ||
Costs | Competitive value | 1 | [91] | |
Low material costs | 2 | [38,92] | ||
Low break-even points | 7 | [8,10,27,29,38,57,93] | ||
Economics of scale and scope | 5 | [7,27,32,38,54] | ||
Employee | Qualification | Lack of skilled employees | 27 | [5,26,27,30,31,33,34,35,37,39,41,47,50,54,56,58,61,62,64,65,67,73,94,97,114,116] |
Lack of implicit product knowledge | 1 | [7] | ||
Different education level in different DCs | 1 | [46] | ||
Attraction of top talents and managers | 2 | [30,77] | ||
Fluctuation of trained employees | 2 | [95,96] | ||
Lack of learning experience | 1 | [43] | ||
Offering worker trainings | 4 | [36,62,83,97] | ||
Focus on long term relationship with employees | 5 | [31,38,50,96,97] | ||
Integration of local culture and language | 11 | [26,29,34,36,39,41,50,56,64,76,109] | ||
Income equality, combat human rights violations, inequality and poverty | 8 | [26,27,38,50,78,79,96,109] | ||
Know-how | Know-how-transfer | 18 | [20,32,33,34,35,37,43,49,54,58,61,62,73,76,80,83,87,117] | |
Know-how transmitter | 7 | [5,40,41,58,71,98,5] | ||
Age of technology | 2 | [41,98] | ||
Codifiability | 2 | [97,98] | ||
Society & Politics | Politics | Local requirements (e.g., safety, security, recycling) | 19 | [3,6,16,28,32,36,38,39,42,45,50,54,56,58,62,75,80,82,108] |
Import taxes, trade barriers, local content, financial restrictions | 18 | [3,5,6,7,8,11,13,14,27,29,58,66,67,71,73,78,82,90] | ||
Social commitment | 8 | [6,31,38,42,66,78,79,89] | ||
Lack of political support | 1 | [48] | ||
Corruption, abuse, theft | 7 | [36,47,48,49,54,56,109] | ||
Instability and high inflation rates | 1 | [67] | ||
Sales & Procurements | Supplier | Requirement of local suppliers | 5 | [13,27,28,50,64] |
Quality issues | 1 | [48] | ||
Unreliable delivery times, high communication costs, inflexibility and lack of innovation culture | 21 | [7,29,32,33,34,38,39,47,52,55,57,58,62,71,73,80,84,90,99,110,113] | ||
Supplier training | 2 | [33,100] | ||
Collaborative partnership | 4 | [13,34,76,100] | ||
Integration of suppliers into network | 1 | [91] | ||
Product | Usage of modules | 1 | [7] | |
Standardized suppliers | 4 | [33,48,80,100] | ||
Technology | Technological capabilities of supplier | 2 | [7,73] | |
Infrastructure | Logistic/Distribution costs | 10 | [29,30,31,32,39,48,52,53,57,75] | |
Underdeveloped business ecosystem | 1 | [53] | ||
Building clusters | 5 | [33,71,96,101,102] | ||
Lack of reliable infrastructure | 5 | [5,6,50,89,92] |
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Region | India | China | Africa | Mexico | Brazil | Latin America | Turkey | Bangladesh |
Findings | 14 | 11 | 8 | 4 | 4 | 4 | 3 | 3 |
Region | South Africa | Malaysia | Kenya | South Korea | Nepal | Caribbean | Mozambique | |
Findings | 3 | 2 | 1 | 1 | 1 | 1 | 1 |
Challenges | Solution |
---|---|
Product challenges | |
Reduction of complexity | Standardized frame and lenses |
Reduction of components and resources | Only essential components |
Standardization | Low internal product variety |
Employee challenges | |
Lack of qualified workers | Customized training concept, open source manual |
Combat poverty | |
Know-how protection | Controlled material supply |
Technological challenges | |
Low process complexity | Customization during assembly, portable equipment |
Low investments | No automation |
Quality standards | Templates for quality assurance |
Sales and procurement challenges | |
Standardized suppliers | Central purchasing to enable economies of scale |
Quality assurance | Central quality assurance |
Lack of Infrastructure | On-site assembly and direct sales |
Challenges | Solution |
---|---|
Product challenges | |
Reduction of complexity | Straight windshields, fiberglass bodywork |
Reduction of components and resources | Continuous improvement |
Lack of local requirements | Homologation in Europe |
Standardization | Standard components like the drivetrain |
Employee challenges | |
Lack of qualified workers | Intensive inhouse training, manual work tasks |
High fluctuation of qualified employees | Company culture, intensive inhouse training |
Technological challenges | |
Low process complexity | Concentration on assembly |
Low investments | No automation |
Manual work tasks | Components especially designed for manual assembly |
Sales and procurement challenges | |
Local suppliers | Building and maintaining a local supplier base |
Collaborative relationship | Early integration of suppliers |
Unreliability of suppliers | Supplier quality management |
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Brönner, M.; Salah, S.; Lienkamp, M. Production Challenges in Least Developed Countries. Challenges 2020, 11, 1. https://doi.org/10.3390/challe11010001
Brönner M, Salah S, Lienkamp M. Production Challenges in Least Developed Countries. Challenges. 2020; 11(1):1. https://doi.org/10.3390/challe11010001
Chicago/Turabian StyleBrönner, Matthias, Skander Salah, and Markus Lienkamp. 2020. "Production Challenges in Least Developed Countries" Challenges 11, no. 1: 1. https://doi.org/10.3390/challe11010001