Brittany Tarto September 27, 2023 Module 5 Assignment QSO-321-H1380 Outsourcing Manufacturing: India v. Thailand Sustainability Measures and Environmental Regulation: Beginning with sustainability, India's manufacturing industry is responsible for 40% of the energy consumption and greenhouse gas emissions for the country, and India's emissions were expected to rise in 2022 from the previous year. However, the manufacturing industry has plans to utilize sustainable production while conserving natural resources to better the environment and increase the well-being of their society. For example, over 60% of businesses in India have created sustainability plans (Agarwal, 2022). There have been several Acts passed to regulate environmental concerns, along with the National Green Tribunal, which handles environment cases judicially (ITA, 2022). This US company would appreciate the efforts made by India, but may need to push for more sustainability efforts to be made. Thailand's manufacturing industry has been making efforts towards greener technologies and its government is now utilizing a Bio-Circular-Green economic model, which attempts to create eco-friendly products while conserving resources and less reliance on imported materials (Hardie, 2022). In addition, Thailand plans to move from using 14% renewable source energy to 30% in 2037, as well as implementing more recycling and environmentally-friendly packaging (BBI, 2023). The goals and plan to move toward greener manufacturing is certainly in agreement with what this company is striving towards.
Cost and Workforce: India offers almost 1 billion people of working-age, with a median age of just 29 and plans to continue growing. The current minimum wage is $148 per month with only about 10% of the labor market having obtained higher education. However, manufacturing businesses can easily find unskilled laborers, as most people working in India are working for small businesses in manufacturing and informal (Gonsalves, 2019). Thailand's workforce includes 38 million workers with an average hourly wage of $3.54 per hour. Almost none have education past high school, and 23% have graduated high school (ERI, 2023). The job industries are shifting away from agriculture, which employs a third of the population, and more than half the labor force are informal. The electronic manufacturing sector is Thailand's largest employer in the manufacturing industry with 360,000 employees (Davison, 2023). Government Regulation: To manufacture products in India, the factory must obtain a factory license and comply with the Factories Act. There are also separate labor laws that must be adhered to including health and safety measures. Notices need to be displayed that provide information on sanitation and hygiene matters (Arora & Vaidialingam, 2020). The Bureau of Indian Standards enforces standardization and ensures compliance labeling and quality standards. There are also anti- dumping and countervailing regulations to consider (ITA, nd). Thailand sternly regulates factory operations guided by the Factory Act of 1992. This act includes aspects of industrial pollution and safety rules. A factory license needs to be obtained from the Ministry of Industry before commencement of manufacturing (Chaninat & Leeds,
2019). It's also important to follow the Thai Labor Protection Act to protect employees. This includes laws relating to minimum wage, overtime, holidays, and rest period. In addition, employees need to correctly classified or legal cases may be filed (Tham, 2023). Intellectual Property: India ranks 42 out of 55 countries with leading economies for intellectual property protection, but has increased regulations over recent years. There are acts in place to regulate and protect the different types of intellectual property, and the Indian Contract Act covers non- disclosure agreements (Knapp, 2023). The challenges India has to improve on are their lack of ability to enforce IP rights and that society and businesses may not have much knowledge regarding this subject yet (KS&K, 2023). Thailand is ranked 68th out of 125 countries around the world, and has several measures in place to decrease risk of stolen intellectual property. For manufacturing specifically, Thailand has been working to prevent infringements of counterfeiting before the products are released (Thailand Court, 2023). IP is regulated by the Ministry of Commerce by the Department of Intellectual Property, and to safeguard any IP, it needs to be registered with them. Furthermore, Thailand is involved with the Patent Cooperation Treaty as well as the World Intellectual Property Organization. However, any violations are the responsibility of the business to report and file a complaint (Rippling Team, 2023). Reputation: There have been several disadvantages that have occurred when businesses have outsourced to India, including quality decreasing, insufficient infrastructure causing delays,
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